Not surprisingly we have recently fielded many enquiries from current and potential new managers about the campaign to reduce and limit the term of management rights agreements to 3 years by various industry bodies including the Unit Owners Association Queensland (UOAQ).
Since our last report there have been a number of positive developments which indicate that their campaign will likely fail.
The UOAQ has always struggled with credibility given its membership comprises an incredibly small percentage of unit owners and its often extreme and disjointed propaganda.
Significant cracks are starting to appear in the campaign. I have been contacted by or spoken to a number of body corporate managers who have stated that neither they nor their industry support the proposed policy of term reduction. They question how such a policy came about and from whom within various organisations. They recognise the benefits of the existing term limits.
ARAMA has presented to those undertaking the legislation review an extensive submission about the benefits of current term limits and of the devastating impact the proposed reduction would have on existing managers, the development industry, the tourism industry and the availability of accommodation in the future.
The ARAMA submission also notes that whilst Queensland has the most sophisticated MR legislation in Australia, fine tuning of that legislation to address performance issues that arise in a very small percentage of complexes can be achieved rather than the ruinous proposals that have been put forward.
The support of a consortium of major management rights holders, the Property Council Australia and the Urban Development Institute Australia has also been achieved to ensure that existing term limits continue to apply.
These efforts will only intensify in coming months. I am confident that the outcome will be positive for the MR industry and predict that the likely outcomes will include:
- a reduction to 3 years is not going to happen;
- the current terms permitted in existing buildings will not be affected;
- for new buildings the accommodation module and long term agreements may be limited to buildings where short term lettings are predominant;
- a widening of the ability for a body corporate to require a poorly performing manger to sell (a provision already in the current legislation but rarely used); and
- regular reviews of a manager’s remuneration and duties.
I encourage any managers who are not members of ARAMA to become members to ensure that it can continue the critical role it is playing in protecting your industry and your investment.