Resort News, October 2022

The legal stuff...

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fight to

Welcome to the October edition of Resort News.

The fight to save both longterm agreements and holiday letting in Class 2 buildings has ramped up a level, and in this month’s special report on page 16, we reveal the extent of the battle. A defined line has been drawn in the sand between the factions who are demanding change, who say there is no place for “ridiculous” 25-year terms, and those who have come out fighting to save MLR.

Supporters of 25-year agreements say if the state government legislates shorter terms, it will not only devastate the value of the MLR industry and destroy thousands of ‘mum and dad’ businesses, but it will also have a negative impact on Queensland’s tourism sector.

On the “concerted attacks” Trevor Rawnsley CEO of ARAMA doesn’t hold back in his column on page 6. With gloves off, he hits back at the “knockers” and questions the motives for change because he asserts the vast majority of unit owners in Queensland are happy in their scheme and like long-term agreements.

He stresses it has never been more important to join the fight and join ARAMA as soon as possible.

Meanwhile, another MLR fight is underway in NSW. On page 10 Col Myers brings attention to the NSW Fair-Trading Short-Term Management Right License Requirements that are described as “unfair” and “a gross overkill”. Rob White a 30-year MLR veteran and the manager of Tathra Beach House Apartments in NSW, says the training requirements need to be urgently reviewed because they are a mismatch of skill sets between what is needed and what is mandated.

In other news, we share the heart-warming story of Tony and Grace Burns. On page 20, the managers of Xanadu talk about their latest venture. Supported by Ian Crooks from ResortBrokers the couple, who consider

themselves “very fortunate”, are currently putting together their third 20-foot container load of charity goods set to be shipped to the people of Fiji.

This month we also have some inspiring reads about relative newcomers to management rights.

First, on page 22, Dr Tom Wang and his wife Mandy Gao talk about their MLR journey and reveal how far they have come in a very short time.

And on page 54, Paulette and Geoff Bennett describe their path to management rights success (and happiness) from the myriad of beautiful bays in Marlborough Sounds, at top of New Zealand’s South Island, to their Whitsunday Reflections resort with its Great Barrier Reef views “to drool over”.

Enjoy this issue of Resort News! Cheers, Mandy.

Mandy

Truth, transparency and disclosure

our best weapons against fake news

An attack on term is an attack on the entire Management & Letting Rights Industry.

The Management and Letting Rights industry (MLR) is locked in a war in which we are being attacked by the deadly weapons of exaggeration, misinformation, lack of disclosure, hidden agendas, corporate greed and a need to exert power over other people, and fake news.

A tiny vocal minority is making a lot of noise trying to persuade the Queensland Government to cut the term of a MLR agreements from 25 years to three, or five or 10 depending on who you listen to. At the same time, they are also trying to ban short-term letting in Class 2 apartment buildings.

Trevor Rawnsley, CEO, ARAMA

With these constant attacks on the MLR industry, it has never been more important for resident managers to not only do a great job, but to market themselves within their complex, to let everyone know of the great work they are doing.

The long-term value of management and letting

rights faces a concerted attack from the opponents of long-term agreements.

If successful, the knockers will wreck the businesses of thousands of ‘mum and dad’ investors, and significantly damage Queensland’s tourism industry. They do not seem to care. The attack on term will see the death of a true ‘mum and dad’ business and place thousands of small business operators at huge financial peril.

Long term MLR agreements are in the best interests of the scheme as they save lot owners money for the general upkeep of the common area and deliver a better residential amenity via a more careful selection of tenants, more responsive service delivery and better management of guest behaviour.

ARAMA knows this because we deal in facts and not fantasy.

On almost every occasion when the remuneration paid for a long-term caretaking service agreement by an onsite manager, focussed on that single scheme, is independently tested against an outside service provider, they invariably find the onsite manager is underpaid, often substantially. Despite the misinformation being peddled by the knockers, most resident managers will trade off all or part of their deserved remuneration increase against an increase in term or a change in duties which more closely matches the needs of the scheme.

And we can prove that. The facts do not lie.

Long-term agreements equal long-term thinking

Someone needs to take a longterm view and act in the best interests of the scheme and not simply gouge their way to profit over one to three years.

Conversely, short-term agreements equal short-term thinking and will result in increased costs for lot owners, which the knockers seem to conveniently overlook because it is an inconvenient truth.

It’s no surprise that the knockers cannot produce any independently tested evidence to prove that reducing the term of a caretaking service agreement magically reduces the costs to lot owners.

Because it is simply not true.

ARAMA also knows that the vast majority of lot owners approve of long-term agreements because on the majority of occasions (85 percent) they keep getting topped up.

Yes… willingly and via secret ballot.

The knockers who really do wish to put their power over other people will argue and try to mislead you into thinking that lot owners are being bullied and controlled into voting yes for a top up or an extension.

Voting for a top up or extension is not compulsory and is done in secret. No surprise that the knockers cannot produce any evidence to support these claims of bullying or voter harassment because it is simply not true.

The MLR industry has been under attack for 30 years, and that’s why ARAMA was initially formed. We are a not-for-profit membership service organisation and advocacy group who banded together in the early 1990s to help government create better property laws that were in the best interests of the scheme and its lot owners.

Every five to 10 years government reviews its laws to make sure that they are ‘fit for purpose’. The MLR Industry has seen law reviews take place in 1992, 1997, 2002, 2008, 2014, 2020 and again now.

But this time it is different. There is a concerted and co-ordinated attack on the MLR industry by groups and individuals who have a hidden

agenda, are opposed to long term agreements and therefore the MLR industry. And they stand to make a huge commercial windfall from the demise of the MLR industry if they succeed.

A study conducted by ResortBrokers recently estimated the total value of Australian MLR businesses at $4.8billion, spread across 3,679 schemes, with 250,652 lots. The MLR industry employs 33,000 people looking after $120billion in assets under management. All of this is now at risk.

We know that there are large interstate based commercial facility management companies waiting in the wings, who for years have been very keen to demolish the MLR Industry in Queensland, so that they can make a huge commercial gain but they know they just can’t compete with modern onsite management with long-term agreements. So, they have infiltrated organisations which claim to be acting in the best interests of unit owners to push their agenda.

If term is reduced, they will very quickly jack up the costs just like they have in Sydney and Melbourne. Lot owners will be forced to pay higher levies and have no independent cost comparison (like there is now) to measure the true value of the caretaking service.

MLR is now threatened by this tiny vocal minority who are proclaiming that long-term agreements are not in the best interests of a scheme, when clearly they are. And they have no facts to support their argument - just more arguments!

We have reams of statistics and data to prove that long-term agreements work much better than short-term arrangements. They reduce costs, they increase value and they create a better community and better rental returns for lot owners.

Leading the fight against the MLR Industry are a couple of small but noisy mobs who exaggerate their own importance and claim to be speaking on behalf of their members, which they do not.

We know that every MLR operator in this fascinating industry is behind ARAMA and supportive of our stance regarding long-term agreements. The same cannot be said about the other groups.

You have to ask why the knockers are pushing to wreck long-term agreements.

I see two main reasons.

One reason is that some people and some corporations stand to make a commercial gain from the reduction of term by picking up the facility management in that scheme.

The second reason is that it gives some of the unit owners who sometimes force their way onto a committee and hijack the

agenda (a very small but noisy number) a chance to push their ‘power agenda’ and feed their appetite for control over others.

Some of these people want to exert their power and influence over a scheme and they don’t care who they run over in the process. When they have a resident manager with a long-term agreement in the way they feel that their power is threatened, and they willingly spend other people’s money to advance their negative and destructive agenda.

Those who oppose long-term agreements can provide no factual evidence that a reduction in term would benefit a scheme. In fact, it’s been proved again and again that the opposite is true. No one has produced any real facts to support their argument that reducing term is in the best interests of the scheme. So now it’s time for the knockers to put up or shut up. Show us the evidence or let us all live (and work) in a peaceful and harmonious scheme.

The Unit Owners Association of Queensland (UOAQ) currently have an e-petition before the Queensland Government, which in our opinion is somewhat misleading. They are busy conducting surveys and creating whatever opinion pieces they can, to support their argument to reduce term, however they cannot show any facts that would support it because there are no facts to support their claims.

ARAMA has the facts to support our assertion that a reduction in term will result in an increase in levies.

Is that what the majority of unit owners in Queensland want?

No, we don’t think so, however this is what will happen if the UOAQ gets their own way.

The UOAQ is also advocating to outlaw short-term letting in Class 2 buildings which is where the majority of MLR businesses operate including almost every serviced apartment complex on

the Gold and Sunshine Coasts and Far North Queensland. They cite unproven claims about compromised fire safety and grab hold of any old argument that might strengthen their point.

Banning short-term letting in Class 2 buildings would decimate the tourist accommodation industry in Queensland, now and in the lead up to the 2032 Olympics. It would also put an end to the very popular pastime of a unit owner being able to obtain a good rental return on investment on a lot owners’ holiday unit when they are not staying in it themselves.

Is that what the majority of unit owners in Queensland want?

No, we don’t think so. However, this is what will happen if the UOAQ gets their own way.

Unit owners need to understand that those who are promoting these attacks on the MLR Industry are self-harming as it is supposed to represent unit owner/investors as well as unit owner/occupiers.

And what about AirBnB?

If AirBnB is a problem in your scheme, then MLR is the solution. Just ask the unit owners in Sydney, Melbourne and elsewhere who are overrun by AirBnB and other outside agencies.

The knockers of short-term letting in Class 2 buildings are trying to convince the Queensland Government to force people with investment

units to move into them fulltime, rent them out full time or leave them locked up. That would be a horrible outcome for the people of Queensland, which is after all, a state which relies on and generates a huge economic benefit from tourism.

These ideas have already been tested in different courts around the country and failed.

The knockers of MLR use very emotive, even hysterical language to continually try to sway public opinion and the government. They are now saying that using Class 2 buildings as short-term accommodation is unsafe and that there will be another Grenfell disaster, that another building will erupt in fire like it did in London. That’s a horrible analogy and so misleading.

Thankfully, the vast majority of unit owners in Queensland do not agree with their views.

The truth is that the vast majority of unit owners like long-term agreements.

It’s obvious. Top-ups and extensions, which are part of the management rights model, have been agreed to on 85 percent of occasions. That’s clear evidence that unit owners acknowledge resident managers are doing a good job and want to extend the length of their term.

We continue to ask ARAMA members to do the very best job they can, and to market their business and show everyone that the business model of management and letting rights is in the best interests of their scheme.

We encourage all resident managers and unit owners who want to deal in facts to undertake a time and motion study, completed by an independent expert, to prove conclusively that the work the onsite manager does would cost far more if outsourced to separate outside service providers.

In the last several years there have been hundreds of these reviews completed and 87 percent of them showed that the onsite manager was in fact being underpaid, sometimes by as much as 40 percent.

If the knockers get their way a resident manager will not be able to extend the agreement for good performance and for saving a scheme hundreds of thousands of dollars.

That’s a shocking outcome.

To counter the attack on term, we need more people to join ARAMA as soon as possible. We are fighting for our industry’s future, and we need the safety and strength of numbers. We also need all our existing members to promote ARAMA to those yet to join our association.

ARAMA is now calling upon every person or corporation directly involved as an operator, or service provider to the MLR industry to join ARAMA and encourage others to do so.

This is your call to action so that ARAMA can be properly resourced to expand its research and continue to fight for the industry to which you have committed your time, money, and energy.

CHANGING IS EASY!

“REI Cloud changed my life! Love it, should have done it ages ago!”

Real estate licencing and building managers in NSW

you would be aware, there is no licence required to carry out caretaking duties, but you do need a real estate agent licence to sell, lease or manage real estate on behalf of owners.

Since late 2021, there are now two classes of real estate agent licences in NSW, a Class 2

1

Class 2 real estate licences

Before you can obtain a Class 2 real estate agent licence in NSW, you must first hold a Certificate of Registration to act as an assistant agent. You also need to hold a Certificate of Registration for at least 12 months, so as

Col Myers, Small Myers Hughes

to gain experience under the supervision of a licensee.

A Class 2 licence allows you to:

• Act as an agent for a client to sell, buy or exchange property, businesses or professional practices.

• Negotiate with clients and vendors.

ARAMA has pointed out to the NSW Government

that the current educational requirements of a Certificate IV in Real Estate Practice is a gross overkill

• Collect rent, deposits, bond payments and fees related to a lease, licence or contract.

However, Class 2 licence holders are not allowed to open or manage a trust account or be nominated as a licensee in charge of a business.

To be eligible for a Class 2 licence, you must have:

• Held a certificate of registration as an assistant real estate agent (with or without restriction condition) for at least 12 months; and

Professional Real Estate Training Since 2006

Recognised

Training Options:

Traineeships in both:

Skills

Estate Practice

• a Certificate IV in Real Estate Practice; and

• completed work experience requirements for a Class 2 agent over a 12-month period; or

• held a Class 2 restricted real estate agent licence within 12 months of making an application; and

• a Certificate IV in Real Estate Practice; and

• completed work experience requirements for a Class 2 agent over a 12-month period.

Continuing professional development

Class 2 real estate agents must also complete six hours of continuing professional development (CPD) learning each year. This includes:

• Three hours of compulsory CPD topics (these are set by Fair Trading and change every year); and

• Three hours of elective CPD topics.

Class 1 real estate licences

Before you can apply for a Class 1 licence, you need to have held a Class 2 licence for two years. The idea behind this is that the two years training will further help build your skills and experience, so that you are ready to take on the additional functions of a Class 1 agent.

A Class 1 licence allows you to do all the things that a Class 2 agent can do, but also allows you to:

• Act as a Licensee in Charge (LIC);

• work independently as a sole trader;

• if you are an LIC, open and authorise trust account transactions for the business.

Only a Class 1 agent who is nominated as a licensee-incharge (LIC) of a business can authorise withdrawals from the business trust account.

Continuing professional development

Class 1 real estate agents must complete nine hours of continuing professional development (CPD) learning each year.

This includes:

• Three hours of compulsory CPD topics (these are set by Fair Trading and change every year);

• three hours of elective CPD topics; and

• three hours of business skill topics.

Eligibility to apply for a licence

To obtain a licence, you must meet the following criteria:

• You are at least 18 years old;

• you are a fit and proper person to hold a licence;

• you have the qualifications required for the licence class you are applying for;

• you have completed the required work experience tasks;

• your previous licence (or certificate of registration) has not been disqualified;

• your principal place of business is either in NSW or within 50km of the NSW border;

• you hold a Diploma of Property (Agency Management CPP51119) or Diploma of Property Services (Agency Management CPP50307); and

• you hold a Certificate IV in Real Estate Practice.

Mutual recognition of interstate licences

If you hold a current and equivalent licence in another state or territory (or New Zealand) you can lodge a form to apply to work in NSW under an equivalent licence.

The key issue here is that you must hold a current licence in the other state, and not just have done the course to qualify to hold that licence.

The management rights industry favours the onsite residential property managers licence

The Australian Residents Accommodation Managers Association (ARAMA) pushed hard for this licence category.

An On-Site Residential Property Managers licence allows you to act as an agent:

• For giving possession of residential premises under a lease, licence or other contract;

• for collecting bonds, deposits, rents, fees or other charges in connection with any such lease, licence or other contract.

Note: This licence does not allow you to act as an agent for the purposes of selling real estate. The NSW government recognised that On-site Residential Property Managers work or live in the unit or apartment complex they are responsible for.

Given their unique working arrangements, this form of licence is treated as a Class 1 real estate agent licence in NSW, allowing the manager to let units and operate a trust account.

Most importantly, this form of licence means that you don’t have to first hold a Certificate of Registration or Class 2 licence, thereby cutting out effectively three years of having to work in the real estate industry, before becoming eligible to let and operate a trust account.

However, you must have completed the Certificate IV in Real Estate Practice and continuing professional development (CPD) requirements apply.

Refining the Educational Requirements for the On-site Residential Property Managers Licence

ARAMA has pointed out to the NSW government that the current educational requirements of a Certificate IV in Real Estate Practice is a gross overkill for obtaining an On Site Residential Managers Licence.

This course includes educating licensees on duties that they are not allowed to perform under the On Site Residential Managers Licence, such as selling real estate selling!

Hopefully, common sense will soon apply and the education requirement for this form of licence will be limited to all the licensee is allowed to do - let units and operate a trust account!

Unfair:

NSW Fair-Trading ShortTerm Management Right Licence Requirements

By Rob White, Tathra Beach House Apartments

have very little insight or understanding of what is involved in the operation of a short-term management right tourism business, they need to consult with us.

I seamlessly migrated into management rights from a hospitality and tourism background when there were no licencing requirements. Our property is successful we have won regional tourism awards on many occasions and been a finalist in the NSW Tourism awards. We have retained 100 percent of owner properties under our management for the entire 30 years. I see myself as an accommodation industry professional however NSW Fair Trading mandate that I am a Real Estate Agent!

We greet our clients as guests not tenants. I have no expertise in selling property, running auctions, presenting to tribunals, appraising property, or a host of other skill Fair Trading maintain that I must have to have to run my business. I have skills in guest relations, PMS operations, revenue management. OTA management, tourism marketing, managing room servicing staff, managing guest OH&S issues, managing swimming pool operations, and managing gardeners and outdoor staff. There are a huge mismatch of skill sets between what we need and what NSW Fair Trading mandate we have. Unfortunately, NSW Fair Trading appear to

Now, if a new entrant wants to enter our industry, either as an employed operations manager or as a business owner, NSW Fair Trading mandate that they must complete a Cert IV in Realestate Management, the NSW TAFE Web site states that this is a 17-week full time course or 36-week part time. They must study a range of subjects with no relevance to our industry.

For our industry to survive and thrive in NSW we need to attract young accommodation industry and tourism professionals with relevant accommodation industry skill sets, the current mismatch of skills between what is mandated by Fair Trading and what is necessary must be addressed.

If we continue as we are few will be attracted to our industry, they will choose to work in or buy hotels, motels, and caravan parks instead. Leaving many existing management right business owners unable to sell their businesses or attract suitably qualified management. The property owners will also suffer having no on-site management for their letting and caretaking, the holiday makers will also suffer with diminished amenity and facilities.

I have operated a short-term holiday property on the NSW South Coast for around 30 years.

BCCM

Renting with pets in a community titles scheme

The keeping of pets in a body corporate can be a divisive topic. Naturally, the risk of not being able to keep a beloved pet can be an emotionally taxing experience for pet owners living in community titles schemes. To keep potential conflict at a minimum, it is critical for all involved to be aware of the rules regulating animals in bodies corporate.

The Housing Legislation Amendment Bill 2021 (HLA Bill) became law on Wednesday 20 October 2021. It amends the Residential Tenancies and Rooming Accommodation Act 2008, with the amendments to be introduced in stages. This article will provide information on how the reforms in relation to pets will impact those who live, work and invest in community titles schemes in Queensland.

Pet reforms

Commencing October 1, 2022, a positive obligation has been placed on landlords to allow existing tenants to have a pet if requested. The landlord can only refuse the request on reasonable grounds. It may be considered ‘reasonable grounds’ to refuse a pet request, if the request would be in breach of a body corporate by-law.

Pet by-laws in a community titles scheme

Before approaching the landlord seeking permission for a pet, tenants should check what the by-laws say in relation to the keeping of animals. Tenants should have a copy of their scheme’s by-laws as a part of their tenancy agreement. Otherwise, they can ask their landlord for a copy of the by-laws.

There are many types of by-laws relating to animals. The wording of your scheme’s by-law will determine your rights and responsibilities about keeping animals there.

Most bodies corporate have permissive by-laws which means that you can have an animal, provided you seek the body corporate’s permission. The body corporate cannot unreasonably refuse your request for an animal.

Sometimes the by-law may contain (or the committee may impose) conditions on the approval of an animal. Some examples of common conditions include:

• The animal is not allowed on the common property, except for the purpose of being taken in or out of the scheme.

• The animal must be on a lead or adequately restrained while on common property.

• The animal must be regularly treated for fleas.

• The animal must not cause nuisance or interfere unreasonably with any person’s use or enjoyment of another lot or common property.

Conversely, some bodies corporate include by-laws which completely prohibit the keeping of animals. Some will prohibit all animals without exception.

Others will prohibit animals of a

particular type, such as cats, dogs, or dogs over a certain weight. The committee cannot approve an animal that the by-laws prohibit. The by-law needs to be changed before a tenant can seek permission from the body corporate. A prohibitive by-law may also give a landlord grounds to reject a tenant’s request.

Tenants seeking permission

It is important to understand that there are two layers of approval for tenants seeking to keep an animal in a community titles scheme, namely, body corporate approval and landlord approval. While the changes to the tenancy laws put a positive obligation on landlords to allow pets, tenants who live in community titles schemes also need to seek approval for their pet from the body corporate.

If the by-law for the scheme is permissive, tenants need to put their request for approval in writing. They may write to the body corporate directly through the committee or a body corporate manager if the scheme has one. Alternatively, they can put their written request to whomever they deal with in relation to their tenancy (such as their managing agent or onsite letting agent) and ask that their request is passed onto the body corporate. If there is no response after a reasonable time (a few weeks, for example) a tenant may wish to follow up their request.

On the other hand, if the scheme where a tenant is renting has a prohibitive by-law, it would

need to be changed before the tenant could seek permission from the body corporate. An owner can propose a motion to be considered at the next general meeting or a tenant could write to the body corporate and ask that a motion changing the by-law is considered at the next general meeting. While the committee cannot make a decision to change a by-law, they can agree to propose a motion to be considered at the next general meeting.

Information for landlords

If your tenant asks you for permission to have a pet, you may need to remind them that they also need to seek approval from the body corporate. While you do not need to seek approval on their behalf, you should pass on their request to the body corporate or provide them with the contact details so that they can make contact directly. If your body corporate has a prohibitive by-law, you may wish to propose a motion to change the by-law to be considered by the body corporate at the next general meeting.

Landlords lodging a dispute against the body corporate

If you propose a motion to have a prohibitive by-law changed to a permissive one and the motion fails, you can consider lodging an adjudication application with our office. You must attempt to resolve the issue prior to lodging an adjudication application.

Tenants lodging a dispute against the body corporate

If the body corporate rejects your request for an animal or does not respond to your attempts to follow up your request, you may consider disputing the decision by lodging a conciliation application with our office. Before applying for conciliation, you must first attempt to resolve the issue with the body corporate yourself. You will be required to supply evidence of your attempts if you lodge a conciliation application.

Tenants lodging a dispute against the landlord

If a landlord rejects a tenant’s request for a pet after the tenant has already been given body corporate permission, the tenant may have a dispute with the landlord. If this is the case, the tenant may wish to contact the Residential Tenancies Authority on 1300 366 311 or visit www. rta.qld.gov.au for advice.

More information

It is essential to remember that receiving a landlord’s approval

to keep a pet is not a green light for a tenant to bring a pet into a community titles scheme.

As the reforms place an active obligation on landlords to permit existing tenants to have a pet, this may create a false expectation that landlord approval alone is sufficient to keep an animal. Tenants are likely to find themselves in breach of the body corporate’s by-laws if they bring a pet into the scheme without first checking what the by-laws say about keeping animals.

More information can be found on our website about:

• Animal by-laws;

• disputes about animals in a body corporate;

• self-resolution for disputes;

• conciliation;

• adjudication; and

• submitting motions.

You can also contact the Information and Community Education unit on 1800 060 119 or submit an enquiry online for a written response at www.qld.gov. au/bodycorporatequestion

SCA

Moderate reforms needed to restore confidence

Part of the remit of SCA (Qld) as a peak body for the strata sector is to help ensure we are advocating to make the sector livable and desirable for all stakeholders.

One of the key contributors to this is instilling consumer confidence so people feel comfortable in staking their future, investing money and perhaps even raise their family in an apartment or townhouse.

One thing we know is that consumer confidence in community title is lacking and this is felt acutely throughout the sector, from real estate agents, developers and builders, through to strata managers and service providers.

One of the factors that can impact very heavily on consumer confidence is the contractual fine print and legal obligations that are attached to buying a lot under a strata or community title.

Yet for such an important part of the purchase process, it’s something that has never attracted significant scrutiny in Queensland… until now.

The current push by the State Government for reform of community title legislation in Queensland, has raised a number of issues that require new solutions. One particular issue is that of management rights.

Management rights service contracts have a place in the tourism industry in Queensland. But that place is not, in the view of SCA (Qld), in residential complexes far away from tourist precincts. And they are not (in any context) for a 25-year period.

SCA (Qld) has recently, for the first time taken a strong and public position on the current framework for management rights.

New South Wales and Victoria

Laura Bos, General Manager, SCA (QLD)

have maintained strong tourism and construction sectors for decades despite the lack of a widespread management rights industry. We believe management rights have a place where they are needed and responsive to the needs of their body corporate.

Currently property owners in new developments can be saddled with contracts of 25 years for site management services that have been put in place (usually for significant profit) by the developers prior to handing over the body corporate to the first owners.

In some cases, these contracts have required property owners to pay the management rights holder for services that aren’t even needed - such as lift maintenance in a building with no lifts. It’s an increasingly popular way for developers to inflate their bottom line, but it is also increasingly creating reluctance among potential buyers, which in turn impacts on prices for sellers.

After consultation with our members, SCA(Qld) has developed a simple plan that more fairly balances the interests of all parties, while ensuring that the engagement of management rights occurs only in appropriate complexes, such as holiday apartments.

SCA (Qld) takes the view that we represent the entire strata sector, and increasing the amenity, lifestyle and attractiveness of strata to all is part of our brief.

SCA (Qld) has recently, for the first time taken a strong and public position on the current framework for management rights

The key points of our position are

The total term of new service contracts, including for management rights, should be limited to either:

• Three years, in line with the term limit for the engagement of a body corporate manager; or

• 10 years, in line with the approach in other jurisdictions, such as NSW.

Original owners (usually developers) should not be permitted to enter into contracts of more than three years than would bind the future body corporate. We believe the body corporate should be free to decide for itself the best way to contract maintenance facilities.

Other consumer protections are also needed including:

• Clarification of section 3 of the Body Corporate and Community Management (Accommodation Module) Regulation 2020 to define better what is meant by the term “predominantly accommodation lots” when describing a scheme. SCA(Qld) believes “predominantly” should mean 75 percent.

• Amending the definition of “accommodation lot” in section 3(3) of the Accommodation Module so it no longer includes long-term residential use.

• Improving the review provisions open to a body corporate in relation to a contract inherited from the developer;

• and that a special resolution should be required for a body corporate to enter into or extend a service contract for more than three years.

These proposed reforms would have little to no effect on existing proprietors, particularly if they are delivering value to their lot owners. It is important to remember that management rights are a service contract, not a tradeable asset. As with all service contracts, excellent businesses offering ongoing, high quality service delivery will always have a place in scheme management.

Recent published data on the industry indicates about 225,000 of Queensland’s just over 500,000 body corporate lots now have some form of management rights contract over them. It is undoubtable that the ability of developers to buffer their return has led to many of these lots been bound where the demand for such a service simply isn’t there.

SCA (Qld) will support existing managers who have bought in their rights in good faith and who perform their duties with skill, diligence, and care. But the time for the binding of owners, with no say in their scheme for decades, is up.

SPECIAL

MLR fight for survival despite high satisfaction levels

By Grantlee Kieza, Industry Reporter

It has never been more important for resident managers to provide gold-standard service as the Management & Letting Rights industry (MLR) fights to save both longterm agreements and holiday letting in Class 2 buildings.

Several leading management rights professionals, including lawyer John Mahoney predict that if the state government legislates shorter terms for MLR agreements it will have an “immediate adverse impact” on their value and devastate the industry.

With opposing views, Greg Melloy, the secretary of the Unit Owners Association of Queensland which is leading the

fight against the status quo, told Resort News: “The whole concept of having a 25-year management contract is just ridiculous, and there are a whole series of other things within the relevant Act that need to be challenged.”

As the MLR industry bands together to oppose changes to strata laws, leaders from both sides of the battlefield say that it has never been more important for managers to give great service.

Even Mr Melloy, one of the most vehement critics of long-term agreements, concedes that good managers have nothing to fear, with more than half of unit owners surveyed by his association declaring they were happy with the management of their buildings.

Trevor Rawnsley, the ARAMA CEO, told Resort News that the Unit Owners Association (UOAQ) was part of a small but vocal minority making a lot

of noise about strata laws.

“With these constant attacks on our industry,’ he said, “it has never been more important for resident managers to not only do a great job, but to market themselves within their complex and to let everyone know of the great work they are doing.

“The business of management and letting rights faces a concerted effort from our enemies. If successful they will wreck the businesses of thousands of ‘mum and dad’ investors and destroy Queensland’s tourism industry.”

About 225,000 of Queensland’s 500,000-plus body corporate lots now have some form of management rights contract over them.

On November 3, Parliamentary E-Petition 3743-22 will be submitted to the Queensland Attorney-General, Shannon Fentiman “To Amend The

Body Corporate Regulation For Caretaker Agreements to a Maximum Of 5 Years”.

By the end of September, the E-Petition had attracted more than 3000 signatures.

It claims 25-year caretaking agreements “impact body corporate owners and impose oppressive cultural and financial conditions”.

“Many caretaking agreements are longer than the average mining lease,” it says.

“Your petitioners, therefore, request the House to do all within its power to amend the regulation modules and fix term limits of service contracts and letting authorities to a maximum of five years.”

Attorney-General Fentiman said that after the E-Petition closes it will be presented to the Legislative Assembly and referred to her.

She will prepare a response which is required to be forwarded to the Clerk of the Parliament

for tabling within 30 days after the E-Petition is presented.

The Queensland Government has established a Community Titles Legislation Working Group to provide advice to the Department of Justice and Attorney-General about key issues for the community title sector, including management rights, enforcement of caretaking duties, and residential amenity.

The SCA (Qld) is also backing a reduction in term saying that while management rights service contracts have a place in the tourism industry in Queensland, “that place is not, in the view of SCA (Qld), in residential complexes far away from tourist precincts. And they are not (in any context) for a 25-year period.

“The key points of our position,” it says “are the total term of new service contracts, including for management rights, should be limited to either three years, in line with the term limit for the engagement of a body corporate manager; or 10 years, in line with the approach in other jurisdictions, such as NSW.

“Original owners (usually developers) should not be permitted to enter into contracts of more than three years that would bind the future body corporate. We believe the body corporate should be free to decide for itself the best way to contract maintenance facilities.”

The SCA said its proposed reforms “would have little to no

effect on existing proprietors, particularly if they are delivering value to their lot owners.”

“It is important to remember that management rights are a service contract,” it said, “not a tradeable asset. As with all service contracts, excellent businesses offering ongoing, high quality service delivery will always have a place in scheme management.”

The Unit Owners Association has also prepared a 39page survey report after an online poll it conducted into unit owner satisfaction.

Despite their opposition to 25-year terms the report said 55 percent of respondents lived in a “happy and harmonious” community, though “65 percent supported three-year (or less) contract terms with

open competitive tenders for cleaning and general services, rather than the current 25 year/perpetual terms.”

Management rights industry leaders Mr Rawnsley and Paul Shih of the PRET training group, said in their opinion the UOAQ’s survey data was flawed.

Mr Rawnsley said there were more than half a million-unit owners in Australia and that 1700 responses presented a “tiny and distorted” fraction of the real picture.

“The truth is that the vast majority of unit owners like long-term agreements. It’s obvious,” Mr Rawnsley said.

“Top-ups and extensions (which are part of the management rights model) have been agreed to on 85 percent of occasions.

That’s clear evidence that bodies corporate acknowledge that the managers are doing a good job and want to extend the length of their term.”

Mr Shih told Resort News that despite the UOAQ pressing for the slashing of long-term agreements, their own survey showed that 85 percent of the “happy and harmonious communities” surveyed were finding value for money from caretakers.

“I think body corporate committees also have to be held responsible for toxic communities,” Mr Shih said, “and cutting the caretaker agreement to three-year terms will only give too much power to untrained, ineffective committee members with their own agendas.”

Mr Shih said that with 42 percent of the 1700 responses to the survey coming from the Gold Coast, there was a clear misrepresentation of the whole situation of management rights in Queensland.

Mr Melloy, a retired Gold Coast management consultant, told Resort News: “Any survey is only as good as whoever responds.

“We did a random online survey and sent it out to a mailing list across Queensland. You get the responses you get.

“We actually wanted the government to do a proper detailed study to understand what was going on in strata.

“An online survey is a cheap and easy way to get a set of answers. The more expensive ways involve professional consultants with interviews and focus groups and all that sort of stuff, where you can determine who the responses are from, but that requires the funds and the resources, and the skills that only government would have in this particular area.

“Our survey was done in the first quarter of last year and it was released in mid-January. We left it open for about six months.”

Mr Shih said he suspected many of the responses came from a few large Gold Coast apartments where there had been problems, and that negative responses from the survey were overrepresented.

But Mr Melloy refuted that.

“As part of the survey we asked for the name of the building and we got more than 500 building names,” he said.

“The maximum we got from any one building was something like five people.

“We got a lot of ARAMA members who replied, too.

“Even the manager in the building where I live responded. There were a lot of different buildings represented.”

Mr Shih pointed out that 80 percent of the survey responses came from owner occupiers, and that investors were “significantly underrepresented”.

The UOAQ survey report says the Body Corporate and Community Management Act should be reformed to allow owners to improve the management of their strata scheme.

Mr Melloy said the UOAQ had argued for three-year agreements for more than a decade.

“The submissions we made to the 2012 enquiry which got quietly binned by the LNP government (the Newman government) are pretty much the same as the views we express now.

“But we’ve written it out differently this time and we have a lot more material about the planning and building Acts and the lack of enforcement from local government.

“Many owners do not support these long-term agreements.

“They don’t have anything in the competitive market which would allow a competitive price to be set.

“Our idea would be to have a position more in line with what happens in Victoria where there are three-year contracts.”

But how does the UOAQ feel about the view from ARAMA and other management rights experts who say many ‘Mum and Dad’ investors will go broke if long-term agreements, and short-term letting in Class 2 buildings, are banned?

“We outlined a number of scenarios in the submission we made to the government,” Mr Melloy said.

“It is really just a matter of giving the owners options for delivery of service. From the respondents, 55 percent said they were happy, so there shouldn’t be a problem with the managers at those buildings.

“Managers who aren’t giving good service are the ones

to be full disclosure. It’s all set out that there are caretaking agreements in existence.

“Queensland also has the absolute highest standard of pre-contract disclosure for off the plan contracts of any state in Australia.

“Next to the disclosure document that buyers must sign before they sign a contract is a copy of the caretaking agreement that has the remuneration in it, a copy of the letting agreement, and a copy of the bylaws.

who should be worried.

“If the owners in a building are happy with the manager they have, that’s fine but we’re saying owners should be able to make an informed choice by having a number of options.

“Caretaking service should be delivered by people who know what they’re doing.”

Mr Melloy said many of the responders to the UOAQ survey didn’t know whether they were living in a residential building, or a building that was designed for short-term accommodation.

“The position now is that you have tourist accommodation and residential accommodation side by side in buildings,” he said.

“We are coming across instances where people purchase off the plan, in what they thought was a residential building. Then the management rights are sold to a hotel operator.

“You move into a place expecting to live in a residential building and then it turns into a hotel.

“It’s misrepresentation and it shouldn’t be allowed to continue, and somebody needs to define the planning Act to say what’s a residential building and what is not a residential building.”

Lawyer Col Myers, from Small Myers Hughes, is taken aback by that claim.

He asks: “Don’t they read the contracts before they sign them, because they should know what they’re buying into?

“Even when anyone buys a second-hand unit there has

“Just about every off the plan contract has a clause in it that says the developer will enter into caretaking and letting agreements, and it clearly discloses 25-year agreements. There is full disclosure.”

Mr Myers said there was no doubt that “a small percentage of managers are not up to the job, and they cause a lot of trouble.”

“But the vast majority of managers who apply for top-ups on their agreements get them, so obviously people in those complexes are very happy,” he said.

Mr Myers said one of the problems in strata was “loud voices that make all the noise.”

“In a lot of these situations you get RDS (Relevance Deficiency Syndrome) big time. You get a lot of committee members who might have been bosses in the corporate world, and they still want to exert some sort of power in retirement,” he said.

“They think short-term agreements will give them more power.”

Mr Myers said for Queensland to follow the model for management rights in NSW and Victoria would be a “backward step”.

“The other states have limitations on developers, but Queensland has such high disclosures that if people don’t want to buy into a building where there’s a caretaking agreement in place they don’t have to.”

He said most of the disputes over management rights revolved around the standard of the cleaning.

“Moving forward I see potentially a good way to deal with this issue is one proposed by (ARAMA life member) Barry Turner.

“He’s pushing for these agreements to still be long-term but to be supervisory agreements only, so that the caretaker’s job is on behalf of the body corporate.

“The manager will go out and get quotes for all the cleaning, bring them to the committee, go through the quotes with the committee and let the committee select who they want to do the cleaning or the gardening.

“The caretaker then engages the contractors direct and then the building managers’ job is to supervise the performance of those contractors so that if the committee don’t like the work, they can get someone else.

“That would take all the heat away from the caretaker and create a situation where the manager is helping the body corporate or the committee instead of being at loggerheads with them over the cleaning role.

“The caretaking fee would be less, but that’s OK because most of the money out of management rights is made from letting.”

A study conducted by ResortBrokers recently estimated the total value of Australian MLR businesses at $4.8billion, spread across 3679 schemes, with 250,652 lots.

The Australian industry employs 33,000 people looking after $120billion in assets under management.

Mr Rawnsley said all of that was now being threatened by a “tiny vocal minority who are proclaiming that long-term agreements are not in the best interests of a scheme, when clearly they are.”

“We have reams of statistics and data to prove that longterm agreements work much better than short-term arrangements,” Mr Rawnsley said.

“They reduce costs, they increase value, and they create a better community and better rental returns for unit owners.

“The UOAQ simply cannot support their argument that a reduction in term will improve the running of a complex because it has been shown time and time again that the opposite is true.”

Supporting Mr Rawnsley’s comments is TDK Management Pty Ltd, which owns and operates multiple permanent/long

term management and letting rights businesses throughout Brisbane and Queensland.

TDK told Attorney-General Fentiman that any plans to cap the maximum term of an agreement to five years would bankrupt “many successful businesses and ultimately destroy lives.

“The BCCM Acts allows five different regulations modules including a Standard Module capped at 10 years and the Accommodation Module generally capped at 25 years,” it said.

“For larger Community Title Scheme (CTS) (complexes/ apartment buildings) the caretaking and letting agreements require the caretaker to purchase a managers’ apartment alongside the management and letting rights business such that the caretaker resides onsite.

“The benefit to the body corporate by having a caretaker own a manager’s apartment and live on site is that the caretaker is heavily invested in the longterm success of the complex and as a result the community ethos generally flourishes.”

In response to the E-petition claim that “Terminating caretaking agreements are difficult, and the body corporate is often tethered for over 20 years with no room to negotiate fees or duties”, TDK responded by saying “The caretaking and letting agreements have termination rights and if the caretaker fails to complete the duties to the required standard, then the BC has the right to breach the caretaker and request remedy.

If the caretaker fails or ignores several of these breaches, then the BC can put forward a motion to terminate the agreements.”

Mr Rawnsley said while the E-Petition may have attracted 3000 signatures in support of cutting term, that was “pitiful when there are potentially more than half a million-unit owners in Queensland.”

Alex Cook from ResortBrokers said the issue had reached a head because “unfortunately a small percentage of managers are letting down the 95 percent who do a great job.”

“There are a couple of bodies whose solution to the problem is to basically destroy the

industry,” Mr Cook said. “That would be ludicrous. Because you’re basically punishing the vast majority of managers who do a great job and all the lot owners who benefit from their exceptional service.”

John Mahoney said any decrease in the earnings multiples that are the basis of management rights values would dramatically reduce personal equity in each business. He said a reduction from a multiple of six to five because of changes in legislation would mean most management rights businesses in Queensland

would lose 50 percent of their equity in the business.

Mr Mahoney urged everyone involved in management rights to protest “loud and hard” and to contact their local members.

Mr Rawnsley said ARAMA was preparing a “significant submission to refute the calls for shorter-term agreements” but said it was never more important for resident managers to not only provide great service but to make sure everyone in their strata complex knew about the great work they were doing.

Xanadu Main Beach Resort

‘Pay it forward’ managers say good relationship with BC is a priority

By Grantlee Kieza, Industry Reporter

Xanadu has long been a metaphor for opulence, taking its name from the idyll in the epic poem Kubla Khan.

For Tony and Grace Burns, Xanadu is their dream property, 150 apartments overlooking the blue Pacific at Main Beach, Queensland. The property comprises a pair of 25-storey towers delivering luxury, self-contained, beachfront holiday apartments.

Whether it’s families enjoying their vacations, corporate travellers on the move, or couples enjoying a blissful romantic getaway, Xanadu offers ocean views, modern facilities, first-class customer service and an unbeatable location.

Tony and Grace consider themselves fortunate to have notched up five years at this opulent property on June 26 but are always mindful of those less fortunate.

Grace was born in Fiji and Tony spent many years working there in the hotel and resort industry.

And the couple are currently putting together their third 20-foot container load of charity goods for the Pacific Island nation.

Tony told us: “Being involved in hotels and management rights we noticed that every time a unit or room was being updated, everybody was getting rid of furniture, linen, clothing, and other items that were still in perfectly good condition.

“So, we started collecting and storing everything from cooking utensils to bed linen, clothes and furniture that were still in good order.

“Every 12 to 18 months Grace and I have managed to put together a container load of goods that can be put to great use by the people in Fiji. The deliveries are coordinated with Grace’s sister and family in Fiji, and they go through one of the local churches there. They have their own charity set up where they can distribute a lot of the material to some of the

outer islands and villages where people are really struggling.”

The charity drive started originally after a cyclone devastated Fiji.

“We began collecting as much as we could to send there for the relief effort,” Tony said. “Some of the areas were wiped out and

we managed to put together a container load that could really help the people in their recovery.

“A lot of the material comes from units that are being refurbished or modernised and we also have a charity bin downstairs at Xanadu.”

Tony said that Ian Crooks from ResortBrokers had kindly offered “a very large donation” to assist in paying for the latest container to be shipped.

“The cost of transporting the containers has pretty much doubled since we first started sending them,” Tony said, “and it’s now more than $8000.

“Ian very kindly offered assistance, which we are very grateful for. All the items will be going to people who really need them.”

Tony and Grace have been involved in management rights in Queensland for 12 years and were at the La Grande Apartments in Broadbeach for seven years before taking over at Xanadu.

From left to right – Ian Crooks from ResortBrokers, Tony Burns manager at Xanadu & Alex Cook from ResortBrokers

“Every day is a challenge in this industry but overall, it’s a great field to work in, especially when business is as good as it is at the moment,” Tony said.

“There have been a lot of ups and downs for everyone in management rights because of COVID-19, but things are very positive right now.”

Tony has spent his working life in the hotel and resort business, and before coming to management rights spent 12 years working for Warwick Hotels at places such as Seattle in the United States, and at Fiji and Vanuatu in the Pacific.

After that experience he and Grace returned to Tony’s home in Brisbane and began to look for their own property to run.

Tony completed a week-long course with Dennis Mackenzie’s Property Training Australia and he and Grace bought the management rights for La Grande 12 years ago when it was being sold by receivers.

“The management of La Grande involved about 60 apartments in a medium rise Mediterranean style complex,” Tony said.

“The business was very good to us, but we saw great potential when Xanadu became available.

“It was a larger property with more of a resort style than La Grande. Because of our background we enjoy that kind of property, with more of a handson resort-style operation.

“Xanadu had gone through a bit of turmoil prior to us coming in and we saw an opportunity there to improve the relationship between building management and the bodies corporate operating here because it was as bad as you could get at the time.

“We saw the opportunity to step in and make things a lot better.”

Tony and Grace took the approach of being “very hands on and having a really honest application to the business.”

“We set about bringing those relationships between the management and the body corporates back into line,” Tony said.

“I think there was a bit of history that neither side could let go of, and it was time for a fresh approach. We felt very confident that we had turned things around in the space of a couple of

meetings and discussions with the bodies corporate within the first month or so of coming here.

“There were a few challenges initially and a bit of hesitation from the bodies corporate, but we overcame that very quickly with some good hands-on management.”

Xanadu has 150 apartments spread across its two 25-storey towers.

“It’s a massive property to look after,” Tony said.

“Gardening and landscaping falls under our portfolio as well, and we currently have about 55 apartments in the letting pool. Most of them are holiday lets but we have a few permanent rentals as well.

“And of course, we’re looking after the property and all the body corporate responsibilities that come with that. There are three bodies corporate involved, one each for the two towers and the principal one that focuses on the common areas.”

Tony and Grace manage the business with a small team of around seven staff.

“We have a company based out of Sydney that handles the cleaning of the rooms but getting hold of cleaning staff at the moment is a major headache.”

Tony said with the worst of COVID-19 hopefully behind us, good times had returned to the industry.

“We were in the same situation as many other properties in that we had to shut down for a good three or four months,” he said.

“We had a few permanent lets that kept us busy and we took the time out caused by COVID to do a lot of spring cleaning and maintenance work.

“Thankfully JobKeeper kept us afloat and allowed us to keep the staff employed, and they’re still with us which is good.”

Tony said anyone starting out in the industry and looking to buy the management rights for

a property had to be prepared to put in the hours of hard work and the effort to build relationships inside a complex.

“You only get out of the business what you put in,” he said. “But the rewards can be great.

“We work with everyone in the buildings whether they’re in our letting pool or not because an opportunity is going to eventually come up if an owner decides they want to rent out the property or if they sell to someone who is an investor.

“Building strong relationships means that owners will always put in a good word for you.

“We treat all owners equally.

“It’s one of the more important things you can do and we’ve seen the benefits of that with the previous property as well as this one.

“Management rights has a lot to do with building good relationships and it certainly can be a very rewarding industry.”

Doctor’s report says management rights in good health

Mandy Gao and husband Dr Tom Wang

By Grantlee Kieza, Industry Reporter

Dr Tom Wang and his wife Mandy Gao have come a long way in a short time as they show how management rights should be operated.

Tom was a medical research scientist before deciding to swap the test tubes for the reception desk at the Richlands Outlook II townhouse complex, in Brisbane’s west.

Tom and Mandy’s mentor Paul Shih, one of the best-known property investment advisors in the Brisbane Chinese community, was delighted

that they were named as 5-star onsite managers at the PRET Awards last year.

Since 2006, PRET has been providing nationally accredited courses for the real estate industry, as well as high-level mentorship.

“Tom and Mandy are well loved by the residents at Richlands Outlook II,’ Mr Shih said, “and made it a great community.”

Tom and Mandy have since taken over the management rights at the Terrace on Gregory hotel apartment complex in inner-city Bowen Hills and are nominated again as 5-star onsite managers for the new complex. This year’s PRET awards night will take place at the Brisbane City Hall on November

26. The night will support the Lord Mayor’s Charitable Trust, the Mater Foundation and the RBWH Foundation.

Tom is originally from a small town in Shandong Province in China.

At 16 he left home to attend university in the sprawling metropolis of Shanghai before working in a centre for medical research and disease control at Shandong’s capital, Jinan.

He told Resort News that he came to Brisbane in 1998 and received his PhD in public health from the Queensland University of Technology before working at the University of Queensland for 15 years.

Tom’s wife Mandy Gao emigrated

from China in 2014 and was working in Brisbane as an accountant when she came across the vast potential that management rights promised for shrewd and diligent managers.

“I was looking after a lot of clients who were running different businesses and I could see that the management rights and real estate businesses were making better profits than other industries,” she said.

“I thought management rights was very attractive and I decided to get a real estate licence. I went to Paul Shih to learn at his classes and while I was there I learnt a lot more about management rights and their potential.”

Mandy started in the industry

Treat the property like it’s your own home and treat the owners and tenants like they are your family

as an assistant manager for a company that had two management rights and she quickly learnt the complexities of complexes.

“I talked to Tom and told him I thought it was a really good industry, very stable and with good profits. I thought it gave managers more opportunity to look after a family and to have a better, more flexible lifestyle,” she said.

The couple decided to buy a management rights business and sought Paul Shih’s advice. Together they settled on Richlands Outlook II, a complex on Old Progress Road with 71 townhouses and 54 in the letting pool.

“We took over in November 2019, three years ago,” Tom said.

“Mandy was running it while I still worked in medical research, but she became too busy and so I decided to quit my job and help her.

“I have really enjoyed the change, and I got my real estate letting course through studying at Paul’s classes with a really good instructor.”

Mandy said they felt “very confident” making their first management rights purchase.

“We inspected a lot of properties and at Richlands Outlook II the previous manager had done a very good job. We looked at the profits and the predictions for the future and we felt very confident that it would be a good property for us to start with,” she said.

The couple had only been running the Richlands complex for a few months when COVID-19 hit.

“Like everyone,” Mandy said, “we had to go through lockdowns and we were worried about losing rentals. We wanted to protect our investors as much as we could, and always tried to maintain the rents at the same level so that there was no rental decrease for the owners.”

After a year at the complex, Tom and Mandy found themselves in the middle of a real estate boom.

“The market was getting very warm and some of the owners wanted to cash in,” Tom said.

“I had no interest in sales but

Mandy does and we thought she could try to sell the townhouses to investors to keep them in the letting pool.”

Mandy went back to class to sharpen her skills in sales.

“The owners trusted us to sell for them and I sold 12-15 townhouses in the last year, with most of them staying in the letting pool,” Mandy said.

After two years running the Richlands complex, Tom and Mandy felt much more confident in their abilities as managers

and had developed a great fondness for the industry.

“We both like talking to people, making friends with the owners and tenants,” Tom said, “management rights is all about forming good relationships.

“Richlands was running very well and we wanted to extend our business, so we started looking for a second property.

“Jeff Keast from ResortBrokers came to be our friend, and he sold us the Terrace on Gregory in Bowen Hills.

“It’s a very different complex to Richlands as it’s all apartments not townhouses.

“Jeff’s an excellent agent and he answered any questions we had.

“We got Paul’s opinion as well and we went ahead and bought it.”

Tom and Mandy have 78, 4-star hotel apartments at the Terrace on Gregory which is situated just across the road from the Brisbane Showgrounds. There are 51 apartments in the letting pool.

“There was a requirement to live onsite here so we moved into the city,” Tom said.

“We are fortunate to have great managers looking after Richlands and now we have a city life.

“We have a very good committee here and we wanted to do our best to prove we have the ability to run the complex and to win their trust by doing a great job.”

The resort-style Terrace offers one-, two- and threebedroom apartments with generous floor plans and is especially suited to corporate travellers due to its proximity to Brisbane’s corporate precinct, showgrounds, and Royal Exhibition Centre, which hosts many trade exhibits, festivals and expos throughout the year.

The complex is centrally located in the bustling Fortitude Valley district of Brisbane next-door to The Tivoli Theatre and within an easy walk to the Royal Brisbane Hospital and the Old Queensland Museum.

The Paddock Bar, just 150 metres from the accommodation offers classic Australian meals and the hotel offers a fitness club as well as a spa salon. Fortitude Valley is one of Brisbane’s premier dining and entertainment hubs.

The city is just two kilometres away and Suncorp Stadium and the South Bank Parklands are a quick drive.

All apartments are air conditioned and feature flat screen televisions and wifi. The bathrooms feature a shower and toilet in the one-bedroom apartments and a shower plus a bath in the two bedroom apartments.

The secure grounds are beautifully landscaped and include a heated swimming pool with children’s wading area, sun deck, heated spa and gymnasium.

Carparking is available in the basement and the complex is handy to public transport with a bus stop at the door and Fortitude Valley Train Station and

the RBW Hospital bus station only 5-minute walks away.

Tom and Mandy see a strong future for the management rights industry despite fears over changes to government regulations over the length of contract terms.

“I think it is still a very good industry,” Tom said. “it’s a wonderful business for couples or families to run.

“The profit is stable compared with most other industries and banks are very supportive.

“I always like meeting people, the tenants and the body corporate. It’s a very good business if you get on well with people.”

And they have a simple but proven recipe for success in management rights.

Tom and Mandy have taken on board the advice of ARAMA CEO Trevor Rawnsley who says it is essential for anyone working in hospitality to realise that they are in a service industry and that good service is the key to repeat business and longevity in management rights.

“The best thing to do,” Tom said, “is to treat the property like it’s your own home and treat the owners and tenants like they are your family.

“You want to look after your home and do your best to help all the people in it.”

We both like talking to people, making friends with the owners and tenants, management rights is all about forming good relationships.

Strata industry braces for new rental reforms

After years of back and forth, new tenancy laws come into force in Queensland on October 1, 2022, that are set to challenge landlords and tenants alike.

The first changes triggered by the new Housing Legislation Amendment Bill 2021 came into effect in October 2021, strengthening protections for renters who were experiencing domestic and family violence.

The next suite of changes starts from October 1 this year and includes:

• A new framework to negotiate renting with pets.

• Changes to the approved reasons to end a tenancy; and

• changes to repair orders where a tribunal has ordered emergency repairs to take place.

Each of these elements pose considerable implications for renters and landlords.

Shots have already been fired between the landlords’ advocate, the Real Estate Institute of Queensland (REIQ), and the renters’ champion, Tenants Queensland (TQ). Claim and counterclaim have been issued and there is confusion amid the gun smoke.

If heartache is to be avoided, it’s important for all parties to be aware of how these new regulations will work and where their rights and responsibilities lie. Let’s start with the new framework to negotiate renting with pets

Pet ownership in strata schemes is possibly the singlemost contentious issue that confronts tenants, owners,

Frank Higginson, Partner, Hynes Legal

bodies corporates and strata managers. Emotions run high in any discussion that affects how people live in their own home. Add a fluffy brown cavoodle into the mix, and the emotions go off the Richter scale.

The new framework contained in the regulations still requires pet owners to seek written approval from a landlord to have a pet on a property, as is currently the case.

However, from October 1 the onus now switches to the property owner or manager, who must provide a specific reason as outlined under the Act to refuse a pet request.

For those renting in units, apartments or townhouses there are also body corporate bylaws that must be adhered to; however, as has been shown countless times, there is no such thing as a ‘pet free’ building under Queensland regulations. There will be increased focus on body corporate committees to ensure they have bylaws that actually comply with state regulations.

Owners and property managers can specify ‘reasonable conditions’ for pet owners wanting to bring a pet into their rental accommodation, but they cannot require a pet bond. When it comes to ending a tenancy

The new regulations provide

clarity for tenants about their rights as a lease nears its end date. No longer will an owner be able to end a tenancy ‘without grounds’.

New reasons to end a tenancy include:

• A fixed term tenancy is coming to an end;

• the property is being prepared for sale or being sold;

• the owner or a relative is moving in;

• change in property use;

• the owner is doing significant repairs, renovations or demolition.

Equally, tenants have been given additional reasons to end a lease, including:

• The property is not in good repair.

• The owner has failed to comply with a repair order.

• A co-tenant passes away.

• No longer a student (if in student accommodation).

There are also new rules around misrepresentation from an owner regarding a property and its inclusions, as well as retaliatory action taken by an owner.

Interestingly, the REIQ has responded by recommending its members issue every tenant

with a notice to leave at the same time as they are offered a new lease to overcome the potential difficulty of ending a tenancy when it converts to periodic. Expect to see more tactics like this emerge as the new regulations are bedded down.

Repair orders are a contentious topic between landlords, property managers and tenants. The new regulations provide a framework that is designed to have repairs actioned in a more timely manner. A repair order will be attached to a specific property and not the tenancy, and owners will be required to complete repairs within a specified time. If a repair order is in place, it must be disclosed to any new tenants.

There are a few other aspects covered in the new regulations regarding condition reports and property repairs that owners and property managers should familiarize themselves with.

There won’t be much respite until the next suite of regulatory changes come into effect on September 1, 2023, where minimum housing standards apply for new tenancies from that date, and for all tenancies from September 1, 2024.

For a detailed discussion of all the implications of these new rule changes, see our webinar.

Exemption for electric cars under proposed legislation

Exciting news for business owners and tree lovers alike!

On July 27, 2022, the Labor Government introduced legislation (Treasury Laws Amendment (Electric Car Discount) Bill 2022) aimed at helping increase the adoption of electric vehicles by making them more affordable for Australians by reducing FBT liability to nil regardless of the amount the vehicle is used for private travel for Electric Vehicles (EV) and Plug-in Hybrid Vehicles (PHEV).

Currently, when a business owns a vehicle (directly or via novated lease) and provides the vehicle to an employee and there is an element of private use, there is a deemed ‘Fringe Benefit’ provided by the business. The business is then either liable for Fringe Benefits Tax (FBT) or your accountant makes a ‘private use’ adjustment which is added to the business as taxable income to negate any FBT liability, either way the tax benefits of vehicles owned in businesses are currently reduced for private use.

But should the proposed legislation be enacted there will no longer be limited tax benefits for vehicles owned by businesses, provided they are ‘electric vehicles’

If an employee purchases an EV/ PHEV via a novated lease, provided it is under the luxury car tax threshold then the employee can pay for the entire car and ongoing costs from pre-tax salary with no FBT payable by their employer.

If the business purchases the car outright (or via chattel mortgage), the business can potentially claim the GST, a tax deduction for the cost of the car and ongoing running expenses in full.

A quick example of how big the potential savings could be,

•

Lel Parnis, Principal, Holmans

for a vehicle used entirely for personal travel for an employee business owner operating through a Trust structure:

The business owner has personal taxable income of $200k with after tax earnings of $135k. If they purchase a Model 3 Tesla for $60k including GST:

Without the proposed FBT exemption, the vehicle would be purchased personally and cost $60k

• No tax savings to be had.

With the proposed FBT exemption, the vehicle could be purchased by the Trust which could:

• Claim an input tax credit for the GST on purchase ($5,454 GST credit).

• Claim an immediate tax deduction for the cost of the car under the current temporary full expensing rules provided the car is acquired and ready for use by June 30, 2023.

• The taxable income will be reduced to $145k and tax to c.$42k.

Overall, a tax/GST saving of c.$23,000 plus c.$5k equal to $28k in the year of purchase reducing the cost of the vehicle from $60k to $32k.

With no ongoing private use/ income adjustments required.

Exempt car fringe benefits for electric cars will still be included for the purposes of determining an employee’s reportable fringe benefits amount. This means that the benefits will be included for the purposes of calculating an employee’s Medicare levy surcharge, determining entitlement to certain tax offsets and determining eligibility for certain family assistance payments.

The impact on an employee’s reportable fringe benefits amount should be considered when modelling the benefits of salary sacrifice arrangements taking advantage of the new FBT exemption.

Key dates/notes:

• The exemption will apply to electric cars that are first held and used on or after July 1, 2022. Second hand vehicles may qualify, and the exemption may apply to vehicles ordered but not received before July 1, 2022.

• The exemption will only apply to vehicles costing less than the luxury car tax threshold for fuel efficient cars, which is $84,916 for the 2022-23 financial year.

• The car must be a battery

electric vehicle; a hydrogen fuel cell electric vehicle; or a plug-in hybrid electric vehicle. There are definitions for each of these terms in the Bill. The vehicle must be a car ie., motorbikes are not exempt under the proposed legislation.

• Exempt car fringe benefits for electric cars will still be included for the purposes of determining an employee’s reportable fringe benefits amount.

Business owners should consider whether they could implement salary sacrifice policies to take advantage of this new FBT exemption to attract and retain staff and reduce their carbon footprint.

The Bill was before the Senate and not yet passed at date of writing this article, please liaise with your accountant prior to making any significant asset purchases as always.

Important Disclaimer: This article is published as a guide to clients and for their private information. This article does not constitute advice. Clients should not act solely on the basis of the material contained in this article. Items herein are general comments only and do not convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of these areas.

Yielding to pressure

The yield or return on investment (ROI) expected within the market plays no small role in determining the value of any business. This is a dynamic measure of market expectations, ever changing up and down, based on market sentiment.

Very similar to the share market, however not as quick to react.

Not by any means.

A news report released at 11am that affects people’s beliefs, attitudes, and behaviours will see the share market react almost immediately with shares either skyrocketing or crashing down.

The property and business markets are a lot slower to move than this and do not experience the large variances.

The return on investment (ROI) that the market requires to invest in a particular asset such as a motel is based on several factors. The combination of these factors decides the resultant return.

In previous articles over the years, we have considered factors such as location/ position of the asset, standard or quality of the presentation of the asset, age of the buildings, the income sources of the business, financial statements, clientele, potential for upside improvement, and so on. These factors are more about the physical asset or business itself. Here we will consider more the external factors that create pressure on yields.

Generally, unless there is a catalyst for change, market yields will remain static with only minor variance. Like treading water or holding a position. One will do this until the waves pick up or something external to us causes a reaction to start swimming. It does not have to be something dramatic, simple changes within the economy and/or our

Andrew Morgan, Queensland Tourism and Hospitality Brokers

lifestyles can change the yield expectations of the market.

Interest rates are in the face of everyone who watches the news or reads a newspaper now. The Reserve Bank reacting heavily to an economic situation that has been building for some time. Whether to hold rates or change them is, I guess, a tight rope for those decision makers. I guess you do want to raise them if you don’t have to, then all of a sudden it’s bang, bang, bang.

The subtle increases or decreases may not see a big impact or reaction whereas a higher-than-expected rise or fall will see a bigger reaction. Ultimately what was trying to be achieved.

How the market reacts to this can be excessive, based on feeling rather than reality. A half of a percent increase may seem like a lot and cause a lot of concern to mortgage holders, however in the scheme of things interest rates could not remain at emergency low levels forever.

Therefore, the human reaction, more than the actual event itself causes the size of the upward or downward change.

Building costs are another ‘in the current limelight’ external factor that may cause pressure on yields. The demand for established motels has risen recently, thereby putting downward pressure on yields. One reason for this may be the increased costs of construction. If it is believed the cost of construction is too high to warrant building a new

motel, the value of established motels will see an increase.

If the cost to build with the land component included is $200,000 a unit site (20 units equates to $4m), then it makes the 20 units in an established motel up for sale at $90,000 a unit site, look very attractive. The developer may decide to hold off on building that new motel and instead divert those funds into an established property where more value for money is available.

Some recent motel sales evidence include:

• Sale 1: September 2022, $109,000 per unit site (modern with high quality presentation).

• Sale 2: August 2022, $102,000 per unit site (modern with good quality presentation).

• Sale 3: July 2022, $48,000 per unit site (dated fit out with below average presentation).

Those unable or not willing to build, may look to the next option, buying an established motel as listed above. Hence demand increases, yields come under pressure to move downwards, and the value of motels will increase as a result.

Another factor that we have seen in recent times is how a change in attitude can affect yields and put pressure upwards or downwards on yields. A

pandemic such as the one we have all just experienced has played a role. The change in attitudes towards lifestyle has also been playing its part.

Investors wanting to look further afield and diversify from previous investment vehicles are now branching out and investing in accommodation businesses around the countryside. Also, those who previously only invested in larger metropolitan centres or capital cities, are now looking to acquire properties and businesses in regional areas as they become aware of the value available, compared to the high city prices.

This rolls onto those wanting to make lifestyle changes and therefore investing in places such as regional Queensland. With either the intention to move there or to take the opportunity to travel to and from, while enjoying a profitable business operation. This requires the business to be operated under management and still have some involvement in the business without being there full time.

Every motel sells on a different ROI, depending on the many factors that the market deems necessary to consider in its assessment of an individual motel business. Ultimately the person handing over the cheque at the settlement of a contract of sale determines this. A willing buyer and willing seller on a particular given day.

GOOD GOVERNANCE

Australia has a vehicle charging problem

EV car charging is sparking more than we bargained for.

Currently Australia has about 50,000 Light Electric Vehicles (“LEV”) floating around, and it’s widely accepted that electric vehicles are the way of the future. It is anticipated that the number of LEV’s will swell to over a million in Australia by 2030.

A percentage of these LEV owners will reside in apartment complexes, so how are we managing the charging stations in our residential strata properties?

Not only will each individual lot owner eventually require a designated (and metered) charging station at their exclusive use carpark bay, but the common property and commercial/retail visitor parks will inevitably require LEV charging stations as well.

A feasibility study into provisioning for such an upgrade to your strata property can be done by your project manager and no doubt require the obvious pre-start consultant investigations, such as:

• Electrical engineer’s audit

Lynda Kypriadakis, Diverse FMX

of current power supply to building, i.e., do we need more to cater to the car charging draw?

• Condition of the current wiring system and ability to add private meters, ie., mature buildings may find their wiring does not meet the current code requirements.

• Private certifiers assessment of a building application to construct such upgrades. These types of upgrades are likely to be assessable building work under the Building Act.

But what about the less obvious planning and design issues that are starting to emerge?

A lithium battery

to extinguish

LEVs, including electric cars, skateboards, scooters and the like, are a serious emerging fire risk. Internationally, millions of dollars of damage has been caused by LEV fires and explosions. These concerning international trends have tweaked the attention of our local regulators, the National Construction Codes Board, NSW Fire Brigade and the Queensland Fire and Emergency Services, to name a few.

LEV charging stations are considered a special hazard under the Australian National Construction Code and as such, Deemed to Satisfy provisions apply when designing a LEV charging station solution.

So, what is the actual risk?

The batteries that drive these LEVs are an alternative energy fuel source that can be highly volatile and toxic when dysfunctional. Increased exposure to battery malfunction occurs when the battery is of low quality, in poor condition or damaged, overcharged, and/ or old. LEV batteries are known to explode or overheat during charging, and in fact, 33 percent of car charging fires start when the battery is on “charge” mode.

Issues particularly appear to occur when charging is not done in accordance with the manufacturer’s charging stipulations.

These small lithium-ion battery packs of cylindrical battery cells look like typical AA batteries, but bigger. These are connected into a group and protected in a metal or hard plastic case. In some LEVs the battery pack can be removed from the frame and charged elsewhere, inside the apartment, for example. When a faulty battery malfunctions or short circuits it doesn’t catch on fire per se, but an unstable chemical reaction occurs that produces a lot of heat very quickly. That heat pressure build-up results in popping or explosion, followed by clouds of thick toxic vapour emerging from the battery enclosure. This vapour cloud is a highly flammable mix of toxins that can cause respiratory distress and asphyxiation to

those in the vicinity and will fill the building very quickly.

Thermal runaway is one of the primary risks related to lithium-ion batteries and is a phenomenon in which the lithium-ion cell enters an uncontrollable, self-heating state. Thermal runaway is associated with violent battery cell venting, explosive ejection of gas, shrapnel and/or particulates, extremely high temperatures, etc. This occurs when the toxic flammable fumes escape the battery under pressure and ignite like a jet engine flame. These escaping toxic fumes feed the fire which is almost impossible to extinguish.

As mentioned, nearly 33 percent of all recorded LEV fires have been whilst charging. An EV fire cannot be put out with a fire hose or standard fire extinguisher. By way of comparison, a fire in a standard petrol car achieves temperatures of around 900 degrees Celsius and uses about 4,000 litres of water to extinguish successfully, which is slightly less than one fire brigade truck supply. A lithium battery fire heats up to over 2,000 degrees Celsius and uses 100,000 litres of water to extinguish.

A LEV fire spreads very rapidly, burns hotter and burns longerup to three times hotter than a normal fuel fire. Some LEV fires include an explosion. There are approximately 100 highly toxic chemicals produced during a battery fire. One LEV battery fire would literally fill a carpark basement and

possibly the floor levels via the fire escape stairs within seconds, especially if no stairwell pressurisation is in the building.

Precautionary measures

So, what can a residential strata committee do to minimise the fire risk associated with electric vehicle charging?

• Step 1: Ensure lot owners seek permission from the body corporate before installing car charging stations and ensure nobody is charging LEVs off common property power points in the basement carpark.

• Step 2: Engage a project manager to assist with the feasibility study around provisioning for future LEV charging stations.

• Step 3: Consult with the body corporate insurer if people are charging LEVs on common property.

• Step 4: Get your project manager to assist with revising the Emergency Evacuation Plan for the common property of the building to ensure it takes into account the LEV charging risk.

The current fire and evacuation plan for the common property of your apartment complex is unlikely to take into consideration LEV fires. This, and other useful information on this topic can be obtained from qfes.qld.gov.au

Monkey business: An ever-changing market

As a writer (no I don’t actually think of myself as a writer, I am just adding that for dramatic effect) you never want to retract something you have written. In an article that was published last year I was quoted saying that “even a monkey could sell Real Estate”.

Now this isn’t a full retraction, more of an edit. In that particular market, a monkey probably could have sold residential real estate but in the market we are seeing at the moment, I don’t think they would have a chance. Although we are still seeing properties go up for sale, they are on the market a lot longer and the demand has certainly quietened down. This means knowing your market and the strategies to put in place to achieve the best results, understanding the art of negotiating and sometimes having the courage to have some tough conversations.

If you are a manager that is confident in the sales process and feel comfortable listing and selling in any market, I applaud you. If you are new to sales as a manager but feel you are capable, that is great and well done. If you are a manager that thinks about doing sales and wants to run for the hills and hide, I celebrate you for knowing your strengths.

In saying that I do suggest that you find yourself a friendly agent, no that isn’t me giving my new company a plug but yes that is what my company is called and yes that is what we provide.

You as managers need to ensure that when you

Kelley Rigby, Managing Director, Letts Rebuild

open your gates and let an agent into your community that they are working collaboratively with you, that they understand your business and the importance of the relationship they have with you.

Story time with Kelley…

Find an agent that values you and knows the value of your relationship.

We had a sale recently where there was a multiple off er situation. There was an owner occupier and an investor batt ling it out. Unfortunately, at the end of the negotiation the owner occupier was $5,000 above the investor’s off er and the investor had no intentions of increasing his price, believe me I tried. The agents and I had a conversation with the seller and explained the situation. We then off ered the seller a reduction of $5,000 in our commission if they were willing to take the investor’s off er. It was a done deal, the seller was happy, the investor was happy, the tenant was over the moon and the managers, well do I even have to say how pleased they were.

If you are a manager that feels nervous about selling or simply do not want to, find yourself an agent that values your relationship more than a single sale. Everybody wins when everybody wins.

I shall return… Tentatively

A recurring theme has emerged. It seems that the prospect of me never travelling again has concerned a great many of you. The consensus is that if I curtail all future travel then the chances of misadventure become limited, resulting in less amusing stories to tell.

Put simply, it would seem that a good laugh at my expense is the preferred option.

Well, fear not, I am back on the horse and write this month’s reflections from In Zid. The Land of the Long White Cloud.

You know, the country where they eat fush and chups, have a party when they turn suxty sux and never, ever ask a colleague if she got a fax on the weekend.

The trip is a complicated affair. I arrive first, sort the hire car, set up the unit, do the groceries, ensure the managing director’s favourite champagne is in plentiful supply and sneak in a bit of skiing. The family arrive in dribs and drabs over the following couple of weeks and I run the shuttle service from Queenstown airport to our lodgings in Wanaka. Needless to say, I was keen

Mike Phipps, Director, Mike Phipps Finance

to see if travelling overseas again would come with any interesting consequences. Things started well. My son took me to Brisbane International at some ungodly hour on a Sunday morning, which is a miracle of itself. In order to do so he abstained from alcohol on a Saturday night!

The airport felt busy and understaffed but Sean from Qantas was a top bloke and stepped up to assist with check in. I presented my documents as provided by my travel agent and some consternation ensued. Sean got to give me the good news. My travel agent had issued documents with outdated departure times and that noise overhead was my flight departing. Of course, if I had taken the managing director’s advice and arrived at the airport many hours early I might still have made the flight… there is no chance of me ever hearing the end of that.

Quick call to my son Nic. Hey mate, have you gone far? Please come and get the old

man. Quick call to the travel agent, who, to her credit, picked up on a Sunday. Flight for tomorrow sorted. Hire car guys in Queenstown notified of delay. I’m now leaving on Monday and everyone’s working except the managing director. Now, to say the MD is not a morning person is to understate things dramatically! If you’ve ever driven from Noosa to Brisbane at 5am in the company of someone who wishes you dead, you will understand.

Anyway, Sean of Qantas is on duty and greets me with a “Hey Brother, you’re back” and a high five. This interaction seemed to confuse those who observed it. You see, I am an old skinny white man and Sean is a solidly built gentleman of middle eastern appearance. If we are indeed brothers, the family tree must be a cracker. What a top bloke. Made my day although it was early, and much could still go wrong. The flight was on time and passed uneventfully. No dramas in Queenstown, no COVID tests, typical laid back, friendly Kiwi reception. Like some player in a game of life and death all I had to do was pick up the hire car and I’m home free….

Hire car, what hire car?

Was supposed to be picked up yesterday so it’s been reallocated. Wrong flights, disappearing hire cars… this must be a test. I decide to evoke memories of our recently and very sadly departed Monarch and remain calm and carry on. The lady at the Europcar

desk might be Sean’s sister. Same apparent ethnicity and just as helpful. How about an upgrade if you can wait half an hour while we wash the car? The calm approach worked. What a legend… not me, her!

By the way, if noticing really nice qualities in cultures or ethnic groups is racist, guilty as charged. I hope the ‘Woke’ will understand albeit feel free to cancel me… please.

I’m now in Wanaka which just might be one of the most beautiful spots on the planet. Even better, I’m staying in an apartment that is part of the NZ management rights model, so all this is tax deductable research.

Yep, I finally found an accountant who’s not afraid to go to jail. Sorry PB.

The family start arriving tomorrow, and I’ve had some time to ski, drink beer and read the papers. I’ve also thought a lot about the travel industry. In fact, this article was going to be a pretty blunt analysis of an industry that I think needs a bloody good shake up. The manner in which airlines, hire car companies, travel agencies, tour companies, travel wholesalers and OTAs operate seems extraordinary to me. Talk about an unholy alliance.

Imagine a business model where you pay money, usually months in advance, for a service that can be cancelled via a short notice text with no consumer recourse for damages. Imagine

Let me start by acknowledging the many readers who sent me life affirming messages following reports of the debacle that was my recent cycling trip to Switzerland.

a business that refuses to refund your money and instead gives you a credit if you are lucky. That’s a credit to use on the same dodgy and unreliable service via the same dodgy and unreliable company. Imagine being able to modify or exclude features and benefits that were promoted as part of the service, again with complete impunity. Imagine being able to tell consumers misleading stories to ensure preferred suppliers get your business. If this was a bank they’d have an enquiry, and they did. There would be public and political outrage, and there was. So how come airlines and associated service providers can get away with conduct that in any other industry would be considered completely unacceptable?

To quote Mark Twain, buggered if I know.

One could complain I suppose but like many industries the travel people have a new and brilliant strategy to reduce and potentially eliminate customer complaints. They make it pretty much impossible to contact them. Emails go unanswered

by any human with automated responses blaming COVID. Call centre queues are hours long and the constant messages confirming service commitment interspersed with truly terrible music are clearly designed to drive the customer away, or insane, or both. All this while reminding the customer that aggressive and angry conduct will not be tolerated.

Have these idiots worked out why their customers are aggressive and angry?

Talk about the self-fulfilling prophecy! If you are going to put customers in hour long queues at least have the decency to play the following recording “Thank you for your call. This call will be recorded for coaching and quality purposes. Because our senior managers and board have zero respect for our clients and consider your time to be worthless, we hope you will enjoy the next two hours of frustration interspersed with gratuitous messages regarding our wonderful service and amazing products. At the end of two hours, you will be able to leave a message which

we will not return. Please understand that aggressive and abusive messages will, in the interests of quality and coaching, be played to our board. They always get a laugh out of the cruder suggestions.”

Of course, once everything that could go wrong has... there is always your travel insurer. Mine put me on a call centre queue for two hours the other day and then randomly hung up. They advise 10 business days to respond to emails and they seem to have a strategy of asking one question at a time. 10 questions x 10 business days each.

The obvious plan is to drag out the process and perhaps even frustrate the client to the point of not pursuing the claim. If they think that will work, they’ve picked the wrong punter. The insurers name suggests they provide more cover, they don’t.

Anyway, I could rant on but thanks to Melbourne based retail manager Christopher Hassett I don’t have to. You see, Mr Hassett is currently suing Qantas for damages that seem

to me to be a test case for the way airlines and the travel industry more broadly operates. Now, to be fair I’ve never had dramas with Qantas but clearly it would seem I’m in the minority. Anyway, if successful the case will set a legal precedent for the duty of care, or lack thereof, that airlines show customers. The history and circumstances of the case are easily available online but in a nutshell Mr Hassett and his husband (the irony is delicious) pretty much experienced all of what I have described above, and then some. Believe it or not I’d written this article before the news of Mr Hassett’s mission came to my attention. I’m sure his situation mirrors many others but more power to him for having the courage to take the matter to court. He also has more patience than I. If evidence is tested and found to be accurate, he spent more than 13 hours on the phone to Qantas call centres.

I think the court needs to hear those recordings for quality and assurance purposes. All 13 hours!

Is your PMS flexible & responsive enough?

To say that the accommodation industry has changed significantly over the last 10 years seems like an understatement. Clearly the pandemic changed things for a huge number of sectors but there are few that have seen the scale of change that we have experienced.

The profile of operators has changed. Technology has changed. The way we market to guests has changed. Essentially the customer has been given much greater flexibility and choice but can the same be said about your software provider?

The evolution of the Property Management System

Property Management Systems (PMS) used to be traditionally associated with larger properties such as hotels and resorts. Nowadays it is considered an essential tool for a vast range of property types including smaller, independent operators such as B&Bs, motels, holiday homes and vacation rentals.

Whether you are managing a single vacation rental, a small property with just a handful of rooms or a large hotel business, each business comes with its own unique set of needs and challenges. The key difference is that small business owners usually don’t have quite the same resources, requirements, and budgets as their larger counterparts. So, a ‘one-size-fitsall’ approach is never going to work when it comes to software.

PMS systems developers have had to be one step ahead when it comes to predicting the changing needs of the market. Listening to and understanding the needs of your customers is

Sylvia Johnston, Senior Executive, HiRUM Software Solutions

the single most important aspect of running any business and is equally vital when it comes to PMS systems development.

While the basic requirements of reservation management may remain consistent across all property types, there are a plethora of functions that will be higher or lower on the priority list depending on the property type. Choosing a system that is responsive to your needs and gives you, the property manager, the choice and flexibility to select the features that will be most beneficial to you will help future-proof your business.

Not all property management systems are built the same. Modern systems combine multiple functions into a single piece of software to make the guest and hotel management process as seamless and easy as possible. So, what should you look for when considering a property management system?

Key features to consider when selecting a PMS

Flexibility & choice

A good PMS system will offer you flexibility and choice. You should have a number of options available to you when it comes to key features such as:

• Channel manager;

• software integrations; and

• payment gateways

The emergence of such a wide range of Online Travel Agents (OTAs) including some that cater to more niche markets, means that most property managers have to think carefully about where they will get most ‘bang-for-buck’ and can’t afford to simply implement

a ‘spray and pray’ approach to their marketing spend.

Similarly, when it comes to software integrations and payment gateways, take a look at whether the system integrates with just the developers ‘preferred’ system. Many PMS providers do not offer any choice when it comes to integrations. The better ones will offer you some flexibility.

Responsiveness

Linked to the requirements for flexibility and choice, the mark of a truly customer-focused PMS supplier is their responsiveness to their customers. Are you able to reach out easily to your current supplier and provide constructive feedback on additional features and integrations that would help your business?

A good PMS provider will be developing and enhancing the software on an ongoing basis to ensure that legislative changes are covered and more efficient ways of running your business are continually at your fingertips. Look for suppliers who are setting the trends not following them.

Support & training

Onboarding support, system training and customer service support are vital to enable you to feel confident in understanding what your PMS can do. A good PMS supplier will have great e-learning resources available so that you can view and download relevant helpsheets and instructional videos at a time that suits you.

Look for software providers with the size to be able to offer great support when you need it. An Australian-based customer support team with a great reputation and extensive industry experience means you will spend less time trying to figure things out and more time attending to your guests.

$3m boost for islands

By Grantlee Kieza, Industry Reporter

The Queensland Government is investing $3 million to enhance access to key Great Barrier Reef islands.

The recently announced Great Barrier Reef Island Marine Infrastructure Package is part of a wider program for private investment in island tourism.

The Member for Mackay, Julieanne Gilbert, said the region had some of the world’s best tropical islands, and the government wanted to make it easier for visitors to explore and enjoy them.

The government is allocating $3m to help with the delivery of new island jetties for better public access and island investment.

The new Yarrabah jetty and pontoon outside Cairns was also officially commissioned on September 7.

Transport and Main Roads Minister Mark Bailey said the new 165-metre-long jetty with its pontoon at Gribble Point would be great assets for the community.

“Construction of a landing at Yarrabah has been talked about for many years, and I am sure that the local community is as pleased as I am to see it finally becoming reality,” Mr Bailey said.

“This is more than just a jetty and pontoon; this fantastic new infrastructure is now an iconic piece of Yarrabah and something locals can use and be proud of for many years to come.”

The Member for Mulgrave Curtis Pitt said as Queensland’s largest Indigenous community, it was important that the area had the right access and could capitalise on the economic opportunities of the region. The jetty and pontoon and their approaches feature unique, striking images of Traditional

Owner totems sandblasted into the concrete decks.

Ms Gilbert said she hoped the Great Barrier Reef Island Marine Infrastructure Package would become a catalyst for private investment in new and upgraded resorts, ecotourism opportunities and unique tropical island experiences.

“Tourism is important to this region’s economy, and we have a golden opportunity to build on that by showing our wonderful islands to the world ahead of the 2032 Games,” she said.

“More investment in Queensland’s Great Barrier Reef islands means more tourism and more good, secure jobs for our visitor economy.”

The Great Barrier Reef Island Marine Infrastructure initiative follows the Government’s $25m Great Barrier Reef Island Resorts Rejuvenation Program.

Tourism Minister Stirling Hinchliffe said new nature-based island attractions were identified by the Action Plan for Tourism Recovery to position Queensland for future tourism success.

“We’ve already started conversations with island leaseholders about the potential to improve access,” Mr Hinchliffe said.

“Applications for marine infrastructure funding are open now to Great Barrier Reef Island investors.

“Leaseholders on Keswick, Long and Hook islands are the among the investors in this region looking to improve island access.

“Our priority is jetty infrastructure because we know it will drive investment in public facilities, new visitor attractions and fresh island accommodation.

“Jetties make access convenient for organised boat tours, as well as the tradies and building materials needed for resort upgrades and ecotourism developments.

“The 2032 Games are creating investment and visitor opportunities to Queensland that no other destination has.”

Tourism Whitsundays chief executive Rick Hamilton said the Government’s investment had

the potential to enhance the region’s impressive portfolio of “world class island experiences.”

“It’s about building on our existing island product offering and opening up our stunning national parks and walking trails for visitor access,” he said.

Tourism Tropical North Queensland CEO Mark Olsen told The West: “Our region has authentic cultural experiences showcasing stories around rock art, bush tucker and medicine, art, star gazing, hot springs and gorges.

“Several of these tours, including a Great Barrier Reef experience, an island walk, and a daytrip to the Torres Strait can be experienced from Cairns.”

The recently launched Wunyami Cultural Walking Tour offers a guided journey around Wunyami (Green Island). During the hour-long Indigenous-led tour, guests can hear how the island is connected to the ancient journey of two ancestral beings and learn more about the cultural ceremonies of the GuruGulu Gungganji and Gimuy Yidinji people.

June’s domestic travel snapshot shows recovery

New figures released by Tourism Research Australia (TRA) show domestic travel has continued to improve after a COVID-impacted 2020 and 2021 with data released for June 2022 showing overnight spending increased by 22 percent to reach $7.5 billion.

However, while spending was up, overnight trips for the month dropped by 14 percent to 8.4 million, overnight trips dropped 14 percent to 8.4 million (down 14 percent on 2019) and nights spent on a trip dropping to 29 million (down by 8 percent).

But compared to June 2019, the figures are still favourable with the increase in length of overnight trips rising by 8 percent on average and spending on accommodation, food and

beverage, shopping and petrol increasing across the board.

The highest increases in spending were seen in Queensland (up 59 percent or $808 million), Tasmania (up 54 percent or $100 million) and the ACT (up 22 percent or $38 million.)

July and August 2021 were heavily affected by COVID-19 lockdowns and restrictions. In comparison, early data shows domestic overnight trip rates for July 2022 and the first three weeks of August were significantly up.

June 2022 saw strong results for interstate travel continue. While overnight trips were down (11 percent or 3.1 million), overnight spend was up by 20 percent.

Results for Australia’s capital cities continued to improve in June 2022 when compared to pre-pandemic levels with overnight trips reaching the 3.5 million mark, in the process netting $3.7 billion.

When compared to June 2021, this represented a 55 percent increase in overnight trips and a 77 percent increase in spend.

Regional areas continued to perform well across the month with Australians taking 5.3 million overnight trips to regional areas (up 23 percent) and spending $3.8 billion (up 29 percent).

Sunshine State was top of mind for travellers for the September school holidays

Online search data from Expedia Group revealed Gold Coast, Sunshine Coast and Cairns topped the wish list for both domestic and international travellers.

Expedia Group was busy crunching numbers and analysing data to shed some light on the most popular holiday destinations in the lead up to the September school holiday break.

Resultant data showed travel was squarely at the forefront of Australian minds, and in good news for holiday accommodation, length of stay remains solid with five nights for international travellers and four for domestic travellers. Queensland remained the top domestic holiday choice with the Gold Coast, Sunshine Coast and Cairns featuring in the top five most popular destinations, along with Sydney and Melbourne.

Expedia Group’s data also saw the three Sunshine State

locations feature among the top five ‘most searched’ destinations with Melbourne again making the cut but Sydney being overlooked for Bali.

From an international travel perspective, the data showed as international visitation once again returns to Australia’s shores, Sydney, Melbourne, the Gold Coast, Brisbane and Cairns are proving the places most travellers want to go in Australia. And where will the international visitors be coming from?

According to the data the top five inbound markets intending to come to Australia during the September school holiday period are from Germany, the US, New Zealand, Singapore and the UK.

Expedia Group Director, Account Management, Jamie Griego said there had been green shoots for a traveller return to inner city escapes, but it was great for city-based hoteliers to see this come further to fruition.

“While our regional destinations in Australia continue to shine, it’s great to see Sydney and Melbourne, our two largest city centres, coming back into the top five,” he said.

“The slow but sure return from international travellers heading to Australia is also proving more optimistic with what feels like new and key markets coming through once again.”

New Noosa hotel & exclusive pop-up experience captures luxury market

By Mandy Clarke, Editor

The demand for bookings of Noosa’s Hotel Clicquot on the Luxury Escapes platform has exceeded all expectations and shows that the current traveller appetite for extraordinary and luxury experiences is soaring.

An exclusive Luxury Escapes partnership with the newly opened Hotel Clicquot in Noosa has outperformed all expectations, with the leading luxury travel provider selling out of its first two Hotel Clicquot limited deal releases within seconds of launching them.

Luxury Escapes has since amassed more than 200 strong waitlist of consumers hoping to secure a spot at the world’s only Hotel Clicquot in Noosa following

Veuve Clicquot’s decision to select Luxury Escapes to be its exclusive booking partner for the 2022 Hotel Clicquot pop-up.

The one-of-a-kind hotel pop-up set on the beachfront at Sunshine Beach will run between November 4-13, 2022.

Availability is very limited, giving guests a once-in-a-lifetime

opportunity to live the Veuve Clicquot lifestyle to the full, over a two-night experience.

Luxury Escapes’ founder and CEO, Adam Schwab says the demand for bookings of Hotel Clicquot on the platform proves the appetite for unique, luxury holiday experiences is high.

“We’re proud to be the exclusive

booking partner for Hotel Clicquot, our first exclusive hotel partnership. The response, with our first two limited releases selling out within seconds and the wait list fast-growing beyond 200 consumers, shows how much enthusiasm travellers have for extraordinary travel experiences in 2022 and beyond,” said Schwab.

“The demand for Hotel Clicquot highlights Luxury Escapes’ audience’s appetite for these kinds of rare and special offers.”

Those who secure a reservation at Hotel Clicquot will enjoy complimentary champagne and all-inclusive dining prepared by private chefs, including two chef’s table experiences with renowned-Australian chefs, a 24-hour private concierge, and a resident sommelier, with the option to upgrade with a vintage speed boat experience and Clicquot Rosé picnic experience.

ARAMA Management Rights Trades & Services Expos

ARAMA’s very popular Management Rights Industry Trades & Services EXPOs were held during the month of September.

Held over three nights in the Gold Coast, Sunshine Coast, and Brisbane consecutively they were a chance to meet the wonderful industry service providers, suppliers and professionals who showcased their products and services to

help managers build a better management rights business.

Special guests, the Team from ResortBrokers presented their new ground-breaking statistical data about the management rights industry which brought

everyone up to date with the latest facts and figures in relation to our fascinating industry.

ARAMA thanks all the guest speakers, all the fabulous exhibitors and everyone who came to the face-to-face event.

Accommodation Industry Golf Club Event

The Accommodation Industry Golf Club (formerly Unit Managers Golf Club) has been going strong for almost 30 years.

Starting out from a small base of unit managers it now embraces everyone associated within the accommodation industry.

The club was formed to promote friendship and a chance to liaise with others in the industry over a great day of golf and fun. The golf wine skins event at the Wynnum Golf club was a highlight in the calendar of five events each year.

The weather was perfect for the day as was the course. Wynnum golf course has wellmanicured greens which can be tricky, making for a bit of a challenge. But what a fantastic day it was for our players!

Imagine 18 holes of golf where

four bottles of wine were the prize on each of the 18 holes. That was only the beginning of the prizes, which included two nights accommodation on the Sunshine Coast, a variety of prizes for the best golf shots and a business card draw with even more prizes. There were so many prizes to be won that everyone that participated went home a prize winner.

In addition, each player received drinks and lunch vouchers on the course, followed by a “build a burger” dinner.

It is the wonderful support

by the event sponsors that makes all this possible for members at a very low cost.

Thank you to major sponsors:

Watt Utilities, Mahoneys, Australian Valuers, KONE, Platinum Electrical & Air, McAdam Siemon Business Advisors, Rochele Painting, Nator Constructions, RBC Group, Leisurestyle Landscaping and ResortBrokers

With supporting sponsors:

The House of Golf, Resort News and Inside Golf

The next event?

Is on Thursday October 20, at the Glades Golf Course at Robina, Gold Coast. This will be a fun, two-person team event which includes motorised carts plus all the following extras: a goodie bag on arrival, drink and lunch vouchers on course, dinner after golf plus a huge range of prizes courtesy of our great sponsors.

Everybody associated with the accommodation industry is welcome to enjoy what is undoubtedly the best day of fun and golf, at any of our future events.

There is no joining fee, just contact coordinator Tracey Taylor at taylor77@bigpond. net.au and join the mailing list to receive an entry form and details of the events. Enjoy golf with a fun group, we would love to see you there.

NoVacancy ‘22 impressed with its gender balanced program

The NoVacancy Hotel + Accommodation

Industry Expo ‘22, held last month in Sydney was applauded for its gender diversity, when it achieved a 63 percent female gender balance in its education program, believed to be a first for an accommodation industry event in Australia.

It was also praised on the ways it differentiated itself from industry marquee events such as AHICE and HICAP.

Exhibition Event Director, Brad Langton thanked all of those who attended and supported the event saying: “We’ve come off an exciting few days in Sydney and have been overwhelmed with the feedback from the industry.

He told us: “The program has been very well received with a mix of deep-dive case studies and thought-provoking panels seeing speakers challenged with questions from the audience during and after the sessions, most of which were standing room only.

“Suppliers too achieved great success, reconnecting with their customers, demonstrating the latest innovations, and helping the industry discover time and cost-saving solutions. A record number of suppliers secured their 2023 stands right at the

2022

event on the new-look floorplana strong gauge of event success against their objectives.

“Special mention goes to the stunning Cocktail Lounge on the expo floor, designed and curated by Mathew Dalby of StudioFab. It’s rare to see such a fabulous space created for just a few days pop up, and to such high quality. Attendees enjoyed live jazz music, delicious cocktails, and even better company.”

What about next year?

“We’ve got a lot of new features and competitions planned for next year, as well as incorporating the feedback from our attendees to make the core event offering even more valuable in the future,” he said.

The next event will run from August 31 to September 1, 2023, back at the ICC Sydney.”

INDUSTRY EVENTS CALENDAR

EVENTS

What about Women In Management?

Congratulations to all the winners at The Best of Tourism Awards 2022!

Female Leader Award

Sue Fairweather: Ultiqa Group Community Spirit Award: Marion Simonds, Boulevard North

Property of the Year: Tingirana Noosa

Making Moves: Nick Ellis, Spicers Retreats

One to watch: Zoe Jennings, Culgoa Resort Noosa

Innovation: Rob Cuda, Caatz Management Rights Accountants

Influencer of the year Award: Langham Gold Coast

Women In Management Gold Coast: End of year luncheon

Wednesday October 19 at Surfers Pavilion: Drinks & Canapes, Hosted by Letts Rebuild Kelley Rigby will be bringing her expertise and knowledge on how to market and successfully win back your external investors back into your letting pool. This will not be one to miss!

Women In Management Brisbane: End of year luncheon…

Friday October 21 at W Brisbane, Wet Deck: Drinks & Canapes, Hosted by Hynes Legal Hynes Legal has advised that EVERYONE is welcome from the management rights industry. Vanessa Sciortino will be hosting this event and discussing the latest on the impact of the recent changes to residential tenancy law on strata.

Visit to www.womenin.com.au for tickets. Both events are guaranteed to be fun and informative.

Hotel Molly

After a million-dollar refurbishment, a well-known motel on the NSW coast is about to re-open, offering hotelapartment style accommodation.

Set to open in November, the Surfbeach Motel in the NSW South Coast town of Mollymook will re-emerge as Motel Molly, taking its cues from the laid-back coastal town, a longtime popular venue for Sydney weekend escapees, with connections encompassing the motel’s 1980s past.

The property’s new format will offer guests a choice from a variety of room formats. These include a three-bedroom residence, three two-

bedroom apartments, a one-bedroom apartment and 11 King Suites, some with kitchenettes, Moroccan-style sunken baths and balconies.

Each room is intended to strike a balance between what the designers say is “the barefoot breeziness of the motels of the past and the subtle luxury of boutique hotels.”

Cascading greenery, lawns, an outdoor BBQ area and a central swimming pool set amid landscaped surrounds, create a welcoming oasis and deliver privacy.

Josh Crealy, director at Knox Developments said Motel Molly as a multi-million-dollar refurbishment which will offer hotel-apartment style living in an iconic location.”

The mix of Mediterranean and Moroccan-inspired interiors are said to invoke “a sense of relaxation and halcyon days of the past”.

Approval granted for a Milton apartment tower

A 131-apartment tower has been approved in the city-fringe suburb of Milton in Brisbane. The development will have river and CBD views and heralds a new era for the emerging hot bed of redevelopment in Milton.

Goldfields Group chief executive Lachlan Thompson told The Urban Developer it was adding to the undersupplied Queensland apartment market.

$500m Gold Coast project collapsed

The development company behind a massive Gold Coast project has called in administrators. The project touted to transform the Gold Coast’s Southport CBD collapsed owing tens of millions of dollars.

Brisbane-based development company Nerang Street was behind the Queen Street Village project. It was reported to have been impacted by funding issues on top of dealing with the Covid-19 pandemic, according to The Australian.

Sales Report

The trusted source for buying Management Rights, Motels and Caravan Parks from all the leading brokers.

MANAGEMENT RIGHTS

Gold Coast

Varsity Views Alam Management Group P/L Burleigh Waters TMR

Eclipse Broadbeach T & E Group Holdings P/L Broadbeach RB

Brisbane

Moreton Bay Villas CKB & Family Trust

Tingalpa RB

Park Ridge Terrace Wright & Zhou Park Ridge CRE

Sunshine Coast / Wide Bay / Fraser Coast

The Entrance Noosa Waters P&K Consulting P/L

Noosa Waters TMR

Aegean Apartments Pakulla and Weiss P/L Mooloolaba RB

New South Wales

Tweed Ultima Luna Resort Management P/L

Tweed Heads MRS/SC

Greenway Gardens Terry Smith Banora Point RB

MOTELS & OTHER

Queensland

Pioneer Lodge Motel Room 100 P/L

Kingaroy WCH

Mineral Sands Motel S. Kang Maryborough TB

Bowen Arrow Motel Birch Hotel Group Bowen TB

Antler Motel J. Butler Nanango TB

Castaways Backpackers Gerald Property Ltd Cairns TB

Hotel Metropole Ryan Ipswich CRE

Downs Motel Amritpal

New South Wales

Toowoomba CRE

Kanimbla Motor Inn Birch Hotel Group Tocumwal TB

Cobar Central Motor Inn C. McKenna Cobar TB

Forster Motor Inn Geo Lyneham Forster RB

Mantra Quayside Graham Mcpherson Port Macquarie RB

Plainsman Motel Bridgewell Capital P/L Forbes RB

Lakeview Caravan Park McIvor

Midlands Motel Atkinson & Tinlon

Azalea Motel Su & Na Rong

Victoria

The Reserve Hotel H. Ma

Motel Dimboola MDJ Develop P/L

Philadelphia Motor Inn A&H Chen

Note: Agent/Broker involved

Agent - KEY:

-

Absolute beachfront 3-star complex

Australia’s most experienced specialist accommodation agency has three Vanuatu properties on the market, as interest in our South Pacific neighbours continues to spiral.

Two months after Vanuatu reopened its international borders after closing them in March 2020 due to the pandemic, ResortBrokers has listings for Coco Beach Resort ($2.7m); Tropicana Resort ($3.2m); and Ocean View Hotel Apartments ($3.55m).

The three properties, which can be sold separately or as a combined portfolio at a discounted rate of $8.9 million, are owned and operator by the same vendor and show a 13 per cent passive ROI, or 20 per cent-plus when leveraged.

ResortBrokers Director Alex Cook says as a combined asset portfolio, it represents a great opportunity for an Australianbased investor or investors to acquire a substantial business and receive a high passive yield.

chairman Ian Crooks says opportunities such as these new listings could be just the ticket for Australians searching for a lifestyle change under three hours’ flight from Brisbane.

“I’ve sold 10 Vanuatu resorts over the past 25 years and it is an attractive South Pacific destination for a number of reasons,” Mr Crooks says.

“Invest Vanuatu - the country’s foreign investment promotion agency - cites access to global markets; a strong finance sector; low tax; and supportive government policies as solid reasons to buy in this market.

“It is also home to two world-class international ports; improved road networks; international flights; and efficient utility services as well as more than 80 per cent digital telecommunications coverage domestically, making doing business easy, according to Invest Vanuatu.

“Recent stats from CoreLogic have seen the median house value in Byron Bay increase to $2.2 million. For comparatively little more, you can own an entire resort in Vanuatu.”

listed

Broken Hill CRE

Taree CRE

Coonabarabran CRE

Sale TB

Dimboola TB

Echuca TB

“With ANZ Vanuatu currently offering Loan to Value Ratios (LVRs) of up to 50 per cent and favourable interest rates, there is scope to leverage this substantially,” he says. ResortBrokers founder and

According to World Bank data, pre-covid, international tourism arrival numbers into Vanuatu sat at 350,000, up from 82,000 in 1995.

For more information contact Alex Cook 0467 600 610

Emten Lagoon, Vanuatu

Profit from one of the best beaches in the world

By Grantlee Kieza, Industry Reporter

Queensland’s glorious Sunshine Coast has become one of Australia’s favourite vacation destinations, and the holiday apartment complex Beachside Mooloolaba –as the name suggests –is perfectly positioned.

Due to its sheltered location, Mooloolaba’s all-weather harbour is favoured by recreational sailors, and its esplanade facing Mooloolaba beach is a centre for tourist activity, containing, bookshops, galleries and restaurants as well as souvenir and clothing shops.

The Sea Life marine park, just 200 metres from the apartment complex, is a world-class marine mammal park, oceanarium and wildlife sanctuary, as well as a rehabilitation centre for turtles, seals, and other sea creatures.

The wonderful Mooloolaba Beach, just 95 kilometres north of Brisbane, is one of the best in Australia, and was recently named in the Top 10 beaches in the South Pacific.

It is a golden magnet for tourists and the town is also home to the Mooloolaba Triathlon and the Sydney to Mooloolaba Yacht Race. Beachside Mooloolaba

contains 30 one-bedroom holiday apartments, with 19 in the letting pool.

Management rights are on sale for $1,449,000. There is a hefty profit of $246,000, and the body corporate salary is $50,437.

The two-bedroom manager’s unit, which has a great outdoor space, is valued at $530,000, and there are 20 years remaining on the term.

The complex offers guests a heated pool, heated spa, library, BBQ area, and secure undercover parking.

Beachside Mooloolaba is being marketed by Barry Alleway from Think Management Rights. He literally knows the complex inside out.

“It was actually the first management rights building I

had as a manager,” Mr Alleway said. “The first building I ran. I sold it in 2005 to the same people who have it now and it’s been a wonderful business for them.

“It’s a great location, just one block from the beach and with everything close by.

“Mooloolaba is a beautiful spot and the Sunshine Coast is such a drawcard for people on holidays.”

Beachside Mooloolaba prides itself on being a secluded oasis providing an atmosphere of relaxation and tranquillity. The apartments are fully selfcontained and within easy walking distance to all of Mooloolaba’s wonderful attractions.

And while it is the perfect beachside location, a short drive away are Maleny and Montville in the scenic hinterland of the

Glasshouse Mountains, offering a totally different landscape and vibe. Mooloolaba is bounded by the Coral Sea, the Mooloolah River, Alexandra Headland and Buderim. The town’s name derives from the Aboriginal word “mulu”, meaning snapper fish.

Its harbour, near the mouth of the Mooloolah River, is home to a large fleet of fishing vessels, as well as being the northern base for the pilot vessels that control shipping through Moreton Bay and the Port of Brisbane.

The town was originally known as Mooloolah Heads, but the name was changed to Mooloolaba by developer Thomas O’Connor in 1919 when he subdivided land for sale there.

For more information contact Barry Alleway 0411 411 987

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Customer-focused in an ever-changing financial landscape

By Mandy Clarke, Editor

A reflection back in 2017 was the catalyst for the successful journey of a rapidly growing finance company.

Having been part of the finance industry for over 30 years, Nick Smith has been helping people achieve their financial goals for some time, but it was a personal situation five years ago that finally made him decide to do something different.

He explained: “I had worked for major banks in the UK, Ireland and Australia and with each of them I faced the same issue… that I could only offer what the bank had, even if it was not what the customer needed. Then I had to tell them to go to another bank.”

After a close family member became unwell “you never know what might happen” it started to resonate with Nick. The ongoing frustration of being tied to one lender’s solutions and his family situation caused Nick to step outside his comfort zone and he started an independent finance company that could help more people, more effectively.

Nick created Red10 Finance as

a bespoke finance company that would specialise in the accommodation industry, while assisting other industries with residential investment, and equipment finance.

A young Nick was a gifted soccer player, and he was destined for a career in the big leagues had it not been for a bad injury.

“Once it was clear the path to being a professional soccer player was over,” he revealed.

“My parents told me to choose an industry from food, money or property, because everyone would always need them, no matter how much the world changed.”

Nick chose “money” and went to work for the local bank on ‘work experience’.

He admitted: “Fast forward 30

years and my parents were right, people always need money, whether they earn it, win it or borrow it, it is the biggest commodity in the world today.

“One other enduring piece of advice that came from my father, was ‘people buy from people, just be honest and upfront and people will trust you’. I repeat that same line to people today.

“In an ever-changing world and landscape of banking, finance, lending, mortgage advice, whatever you want to call it, there is only one constant in all of it - the people and quite usually the ‘person’.

“As a competitive sportsperson, I strive to be a winner, but I also want the one that other people look up to and respect.”

Nick is certainly a winner; he won the best Newcomer Award in 2019 by the Mortgage Finance Association of Australia and set the baseline for how a finance company should operate. The award was based on several credentials and selected from over 560 national finalists, Nick and Red10 Finance won the award. Followed by winning Best Commercial Broker in 2020 and 2021 and then they were a finalist in 2022. All very impressive achievements by the business, especially in such turbulent circumstances.

Nick said: “The accommodation industry has faced some very challenging times since the Royal Commission and more directly during the COVID-19 pandemic. A lot of clients were very concerned about the industry and its survival, especially during the early stages when there were a lot of unknowns happening.

“We worked tirelessly with the banks to ensure support was given to existing customers and worked with other professionals to provide as much information as possible to everyone within the industry.

“The banks who usually get a ‘bad rap’ for not helping were actually very supportive of the

Accountants to the accommodation industry.

My advice is to do what you say you are going to do

industry and continue to do so. As of the date of this report some banks are ruling out the COVID-19 affected time, late 2021 to ensure a fair assumption of ongoing income is used.

“In 2021 some record performances were set by the leading accommodation brokers and that is testament to the resilience of the industry.

“The finance landscape is changing so often that it is sometimes difficult for the customer to be able to understand exactly what is going on. What was once called a ‘home loan’ or a ‘business loan’, etc., has become a quagmire of jargon and acronyms.”

However, the mandate for Red10 Finance is simple; to be a customer centred organisation, with close personal service, expertise and understanding forming the basis of its relationships. This has been Nick’s core focus for more than 30 years in the finance industry.

He said: “When I was interviewed by a national publication regarding one of the awards I won, they asked what I did

differently to everyone else. As I didn’t know what everyone else did, I couldn’t say, so I just explained how I operate and what I expect from everyone at Red10.

“My advice is to do what you say you are going to do. You should always return phone calls and if you don’t know the answer to a question, say you don’t know but find out and go back to the client. It’s basic customer service and what the customer deserves.”

From 2006 in his position as the national expert for management

rights at one of the big four banks in Australia, Nick’s knowledge of the industry and its key stakeholders is strong. He is a multi, national and state award winning finance expert with a strong ethos on doing the right thing for the client.

Nick is a well-known and respected member of the accommodation industry, with a down-to-earth, easy-going personality but is also regarded as a highly professional advisor. Nick and Red10 Finance have

been instrumental in funding over $750m worth of transactions and over 550 complexes as part of a team and individually.

This includes dealing with a wide variety of structures and complex types, from single operators buying their first interest, to a multi-level partnership buying multiple properties. Due to his knowledge, he has been a guest speaker at various events and conducted seminars both at REIQ and in conjunction with other professional industry solicitors, accountants, valuers and real estate agents in all states of Australia.

Specialising in accommodation facilities, the company can offer advice on all types of business loans, home loans, investment loans and asset loans including car loans. Holding professional qualifications and memberships to professional bodies as well as huge network of well-established network of industry contacts, Red10 Finance are adequately equipped to provide specialist advice.

Nick understands that purchasing a new business or property can be quite daunting.

The Management Rights Lawyers

Buying and selling

due

Nick Smith

Joe Smith

Red10 Finance aims to reduce some of these challenges and provide options and recommendations based on experience and, more importantly, the customers’ requirements.

Every business and managements rights is unique, therefore, a tailor-made, expert driven solution is required.

He told us: “I pride myself on my knowledge and expertise but more importantly, being that person that customers feel at ease talking to. I have always been a great supporter of the industry over the last 15 years and that has allowed me to ensure that I can build great relationships and support my clients to grow.

“Management rights have been a passion of mine for a long time now - you meet all kinds of people in this business, all ages and all of them have different personalities. However, there is always one thing each of them possess and that’s the willingness to provide a high level of customer service.

“This is completely in line with Red10 Finance’s strategy of providing the highest

possible customer service to both management rights and accommodation customers. We ensure commitment to all aspects of the industry, from hotels, to motels, and caravan parks while also supporting other industries too.

“I’ve always been a great advocate of the industry which has allowed

me to ensure that I build great relationships and assist my clients to grow. Some of my clients have become personal friends over time and, for me, that’s the ultimate advocacy.

“Guiding both clients and banks alike during COVID-19 enabled a lot of clients to continue purchasing management rights.

“As some bank’s waivered with their policies there was a chance that sales within the industry could decline. With the engagement of key stakeholders both internally and externally, we were able to continue to offer finance solutions throughout this challenging period and assist customers.”

In 2020 Red10 Finance added to their team with Joe Smith enhancing the home loan services of Red10 Finance. Now an expert in his own right, Joe is more than qualified to work within the accommodation industry as well.

Joe told us: “Learning from Nick has been like reading an encyclopedia. Nick’s knowledge of finance and many other aspects of the industry gave me well-rounded insight and allowed me to be able to assist both our existing clients and new clients alike.”

Joe has a Diploma in Finance as well as a degree in International Relations. Joe notes his interests as “all sport from soccer to golf” and he is also fluent in Russian.

Finance testimonials

“We have been involved with Nick Smith for approximately 15 years. During this time Nick has provided himself to be the ultimate finance professional and not just in the accommodation industry. We have worked with Nick in other industries, and he always achieves first class results for his clients. He is highly regarded by his professional peers within the accommodation industry. We highly recommend Nick to anyone looking for a finance broker with a diff erence.”

– Jonathan Hanaghan & Grant Robinette, JGA Accountants

“From the get-go Nick and the team were fantastic! They negotiated the best rate and terms for me and took away all the stress dealing with financiers.He kept me updated throughout the entire process and always took the time to answer questions and explain scenarios.It was by far the best and most seamless finance transaction I have ever been

involved in 30 years! and I have been doing property stuff since the 90’s and it’s never been so simple”

– Simon Culotta, Grand Bay Apartments Labrador

“Nick assisted me with financing my purchase of the management rights for Northcliff e Residences recently. He presented me with several finance options at incredibly competitive rates, and worked quickly to ensure finance was approved well and truly in time for our purchase. Nick was friendly and approachable, and very easy to deal with during the entire transaction. His experience in financing MR purchases meant that I saved a significant amount of time, and the whole process was efficient. I highly recommend Nick and Red10 Finance for your next MR purchase.”

– Adam Mackay, Northcliff e Residences Surfers Paradise

“Historically we hadn’t used a Finance Broker for our banking

needs as we were able to arrange our finances directly with the Banks. Nick was introduced to us via a mutual connection as someone to ‘just talk to’. After our first discussion, Nick added value to not only the finance process but also the acquisition and sett lement process, so we decided to move forward with him. The pricing we achieved was sharp, however he really added value to our business by actually understanding us and where we wanted to go in the future, which enabled us to make quick decisions. We now use Nick as a sounding board on our acquisitions as he has proven he has a deep understanding of the market which we play in”

– Stacey Ireland, Emerge Management

I have had the pleasure of dealing with Nick Smith again for our new business proposal. Having such a complicated deal to get through Nick was integral to the finalisation of approval. Never needed to worry

about the litt le stuff (which was possibly the big stuff !) Just took it in his stride and walked us through it all where needed. Highly recommend to anyone looking for finance no matter what industry you are in. Nick is someone who off ers professional advice but has a very laid-back personality and makes you feel comfortable at every interaction.”

– Michelle Carter, Waters Edge Townsville

“Joe provided us with unbelievable service from the start of our application right through to sett lement, constantly updating us with the current process and even texting us late on a Friday night to tell us we wouldn’t hear anything until the Monday, so to enjoy our weekend. Absolutely a first-class experience with Red10 Finance and we wouldn’t use anyone else. Highly recommended to anyone and everyone.”

– Sarah and Michael Stuart

Views a highpoint in astonishing location

By Grantlee Kieza, Industry Reporter

Stunning views, a sublime climate, and the beckoning gateway to one of the great natural wonders of the world.

That’s the Whitsunday Reflections luxury accommodation in Airlie Beach, a perfectly positioned resort featuring opulent one, two and three-bedroom holiday apartments perched high above Airlie Beach. The views are to drool over and the Great Barrier Reef is just a short boat ride away.

The picturesque location was a major factor in Paulette and Geoff Bennett securing the property two and a half years ago.

The modern and spacious holiday apartments boast open-plan living with balconies providing magnificent 180-degree views of Airlie Beach and the Coral Sea, some of the most stunning seascapes in the world.

And the property is still close enough to walk to the heart of town.

The apartments at Reflections offer all the amenities to make a holiday as relaxed and comfortable as possible, including modern kitchens, laundry facilities and easy parking.

And once guests leave the apartments there is the opportunity to explore the best the Whitsundays has to

offer, including a stunning reef that stretches 2300 kilometres and includes 900 islands.

Tours to all the amazing local attractions can be booked at the front desk of Reflections without guests having to lift a finger.

Paulette Bennett said she and husband Geoff were captivated by the property as soon as they saw it.

“I was actually working in a couple of resorts in the Marlborough Sounds in New Zealand at different times and my family remarked, ‘why don’t we get our own’,” Paulette said, “So we did.

“I enjoy the housekeeping side of the business more than anything, but it is a great industry all round.”

The couple first left New Zealand in 1985 for stays in different Australian cities.

I enjoy the housekeeping side of the business

more than anything, but it is a great industry all round

“Our first home in Australia was Perth and we spent two years there,” Paulette said.

“Then we went to Adelaide, then Sale in Victoria, then back to Adelaide, back to New Zealand for a couple of years, before we came back and bought a villa in Burleigh Heads.”

The couple, relative newcomers to management rights, are loving the work.

Geoff has a background in the air force, having served as a flight engineer in New Zealand and Australia. While Paulette’s experience in the accommodation sector was limited, she knew all about customer service having owned five food stores in different locations.

“My first food shop was in Auckland,” she said, “then I had a shop in Perth, and in Adelaide.

“The fourth and fifth shops were in Sale where we lived for eight years.”

In 2017 Paulette started working in housekeeping at two resorts in the Marlborough Sounds, at the top of the South Island.

It’s an area of myriad bays and inlets that contains 25 percent of New Zealand’s coastline.

The experience convinced Paulette and Geoff that they could run their own property.

“Initially we were looking at buying one unit on the coast, not 46 of them like we have now,” Paulette said.

“But the idea of running a management rights business grew with us.

“We looked at a couple of resorts and ended up here. It’s wonderful.”

Paulette’s only experience in accommodation came from having worked in properties in New Zealand. “They were not run on the same management rights model as we have in Queensland, but they were similar,” she said.

“The first resort I worked at was on the Queen Charlotte Track, a very popular four-day walk.

“The second was owned by a company in Christchurch that had a few places and were trying to increase their portfolio. It was a very good experience for learning what was involved

Talk

on the housekeeping side of things and guest satisfaction.”

Paulette and Geoff, who have three grown children, Adrienne, Michael and Vanessa, have been at Reflections for two and a half years. “Learning the business in the first place was our biggest challenge when we came here,” Paulette said.

“When we first arrived my oldest daughter Adrienne was here with my son Michael to help us get started. Michael is still here, and we have been lucky to have Robyn Beck working with us in the office, she’s really helped us a lot with the business.”

Paulette and Geoff took over Reflections just before COVID-19 hit the tourism industry like a cyclone that lasted for months.

o some

Tanveer Khan

Management Rights

Amanda Norling

Rights Specialist

Michael Mjaskalo

Rights Specialist

Michael Mjaskalo

Rights Specialist

Coast

Coast

Queensland

“We started three weeks before COVID,” Paulette said, “it was not the best introduction to the management rights business.

“We couldn’t have guests and we couldn’t even have staff because of the lockdowns.

“But we decided to use the down time to make improvements to the property. It wasn’t in great shape when we took over, and COVID at least gave us time to clean up all the rooms and do a lot of work.

“We still had a few people coming through with essential travel for about three months, and then every time they’d open the border or let guests travel more than 150 kilometres, we’d fill up again with a great rush of visitors.

“Then they’d close the border again and the visitors would of course dry up, but we were never empty.”

Paulette said she was relieved that Reflections, fared better than many other resorts in the area because many had no guests at all. “But once the lockdowns ended it’s been full on here ever since,” she said.

“It’s such a great location and people love coming here.

“So, we’re now getting owners to spend a bit of money on their units because they are getting really good returns.

“Most of our units now have new mattresses, Smart televisions, and some of them are being freshly painted inside.

“Our occupancy levels have been very high for the last six months. Just before Christmas the rush of guests started and it hasn’t stopped since, which is fantastic.”

Paulette said she and Geoff were initially hooked by the view, but also impressed by the room sizes and the layout of Reflections

sprawling over a hill and giving it the highest views in town.

“We have beautiful, spacious units of one, two and three bedrooms with stunning views,” Paulette said.

“We’re having work done at the moment on our website and we are adding some brilliant new photos of the property to showcase what an incredible place it is.” Paulette said patience was a key ingredient in working in management rights.

“You have to be patient dealing with guests and taking time to learn the intricacies of the business,” she said.

“You must learn on your feet a lot of the time, but we are finding that it is certainly worth it.

“We get to live and work in an incredible part of the world.”

Paulette and Geoff with their daughter and partner

Michael with bananas grown onsite

Paulettes brother and his wife with Michael

Paul Shannon

Look for the sign of an Industry Specialist