6 minute read
ARAMA Report
ARAMA REPORT Nobody
does it better than a resident manager
A large slice of Queensland’s strata accommodation industry has been built on the back of Management and Letting Rights (MLR), and it is a proven model for success.
If it wasn't for developers embracing the MLR concept, the Sunshine State simply wouldn't have the tourism industry it has. Instead, we would be like Victoria and NSW, with an emphasis on fi ve-star hotels, motels, caravan parks and dodgy party houses. What started out decades ago as an improved service delivery model for holiday makers on the Gold Coast has now blossomed to include other states and long-term residential tenancy accommodation in schemes right across Australia and in many other parts of the world. A few years ago, ARAMA commissioned a report from Deloitt e which showed that a resident manager gives more bang for a property’s buck then alternate business models. The report also showed that a resident manager, acting as an onsite lett ing agent, delivers a bett er and higher return than an off site lett ing agent might otherwise do.
Yet, MLR operators are under increasing att ack, whether it’s from committ ee members who don’t understand the amount of work they do, or the commercially jealous looking to move in on their territory or grab a few bucks from creating disputes. That includes outside real estate agents who get outperformed and deliberately besmirch the reputation of the on-site lett ing agent, especially if they own a lot in the scheme, or if they get on a committ ee and start marketing their own services over those of the resident manager who has already invested heavily in the entire scheme.
You might remember that once upon a time newsagents were the only places that you could buy a newspaper?
The law changed, and those businesses were severely impacted as newspapers went on sale in supermarkets, petrol stations and almost everywhere else. Newsagents now resemble Lott o offi ces and they are now trying to fl og anything to stay in business. The resale value of a newsagency plummeted as a result of that change in legislation.
Then the taxi industry got careless and complacent, allowed its service to suff er, and sat by stunned as Uber rode roughshod over it to fi ll the void and give customers what they really wanted. Excellent service. The value of a taxi license plummeted.
Poor service and lack of customer focus provided a clear pathway for Uber, and soon there were other ride-share providers taking work from the taxis that were left in Uber’s wake. Who are your disruptors? And who will protect your business from sudden changes in legislation? As ARAMA celebrates its 30th birthday this year, it’s a timely reminder that it is the industry’s insurance policy, the association that thwarted legislation that would have devastated the MLR landscape three decades ago. Our industry’s detractors are oft en body corporate committ ee members looking at a balance sheet, seeing “caretaking services” and then a very large number. They start to think the manager is overpaid and the committ ee is being ripped off . That is the general viewpoint of a person who doesn't understand what a resident manager does. As the Deloitt e report for ARAMA showed, a resident manager actually saves a scheme money. In any scheme, a manager could call VIP Lawn Mowing, get a quote for doing the lawns and trimming the hedges, and say to the committ ee “look I (or my business) do this for the same price that VIP does, plus I also clean the foyers, carparks, driveways and I
Trevor Rawnsley,
CEO, ARAMA
clean the pools, I empty the garbage, I pick up the papers, I receive parcels occasionally, and I'm there to obtain multiple quotes, meet tradespeople, send reports to the committ ee, att end meetings and do many more things which go largely unnoticed and unappreciated. “I do all of these things which is more bang for your buck than you might otherwise get. “The $100,000 (for example) that you're paying me (or my business) to do all these things is a lot lower than it would be if you broke that down into components and had to pay other people separately.” But still many resident managers complain of being verbally abused, harassed, demeaned, or even bullied as they try to do their work, and that continues to bother me and ARAMA.
MLR operators are experts in their schemes. There are multiple lots in a scheme and the resident manager knows everything you need to know about each and every one of those lots. They're on the spot for preventative maintenance and they're looking aft er the cleaning and general garden upkeep, whereas if you are lett ing through Airbnb or an outside agent for instance, they don't know anything about the property apart from, “I've got an apartment and I want some money. I don't care if there’s any problems anywhere else that need to be sorted because I'm not going to be there.” An onsite manager makes sure that the inventory is checked, that people are escorted to their apartment if they need to be, makes sure they know where guests can and can't park, what the schemes other by-laws are and if there is something that's not right they can deal with it (the leaky tap or whatever) instantly. Yet some real estate agents are constantly trying to pick off a resident manager’s lett ing pool, and take it to an outside agency because they say they can do a bett er job, when in fact they can't. Real estate agents don't like us because we perform bett er. We deliver bett er returns and give bett er service. Lots of facility management companies such as cleaning companies don't like us either, when they can't get into a scheme because the resident manager has the caretaking and cleaning roles locked away. Thirty years ago, ARAMA prevented legislation that would have destroyed the MLR industry at a time when it was just beginning to establish itself and deliver the benefi ts that are now evident.
In the 30 years since, ARAMA has been fi ghting constantly for the industry, lobbying governments so that MLR operators do not go the same way as newsagents and the taxi industry. We are ever vigilant, watching for disruptors and learning from the demise of other industries.
And while ARAMA continues to fi ght the good fi ght for our wonderful industry, everyone in management and lett ing rights, and in particular every operator, should be reminded that they must deliver outstanding customer service every day in every way. They must keep reminding their customers, the lot owners in the body corporate, how their essential role as an on-site service provider delivers such value and benefi ts that their customers (lot owners) never want us to go. As the Deloitt e report showed, you can do your job bett er than anyone else. It is therefore up to you, the resident manager to demonstrate this every day to keep the disruptors out of your scheme while ARAMA keeps watch on behalf of your industry. We are interdependent - you are ARAMA and ARAMA is you, and nobody does it bett er.
MLR operators are under increasing attack
Damian Quinn
Management Rights Transactions
One of the Sunshine Coast’s most experienced firms in on-site management rights transactions.
• Commercial & Business Law • Property Law • Litigation & Dispute Resolution • Retirement Villages • Wills & Estate Planning • Body Corporate
SUNSHINE COAST & QUEENSLAND WIDE
Australian Resident Accommodation Managers Association is the peak industry body representing the interests of people who are involved in management rights.
