Resort News - Novemeber 2023

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Issue 327 | November 2023 | $13.75 inc. GST

The Monthly Magazine for Accommodation Industry Professionals

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Special Report:

Story of a steadfast sector thriving against the odds

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INSIDE

The legal stuff...

November, 2023 - Issue 327

18 BCCM Report

Advertising Conditions

06 Special Report

20 Person of Interest

Front Desk 05

Tourism

Editor’s Note: Keep those party hats on...

Industry

30

Tourism News

31

Navigating turbulence: How global

06

Special Report: Story of a steadfast sector thriving against the odds

12

News: Loopholes loom over 75 percent rule

14

ARAMA Report

32

The Best of Tourism Awards Annual Gala 2023

16

State Report

36

AccomCon. 2023

18

BCCM Report

37

20

Person of Interest: Chris Podmore

conflicts impact your dream cruise

Events & Appointments

SSKB Networking & Information Event Accommodation Industry Golf 2023 PRET Australia Awards Night

Management 22

Legal Ease

Property

23

By All Accounts

38

24

Motel Market

25

Good Governance

26

Thinking MR

28

The impact of Non-Refundable Bookings on your revenue strategy: Are they becoming obsolete?

Preferred Supplier Directory

29

Building Relationships

46

AccomProperties Sales Report

Profile 42

The views and images expressed in Resort News do not necessarily reflect the views of the publisher. The information contained in Resort News is intended to act as a guide only, the publisher, authors and editors expressly disclaim all liability for the results of action taken or not taken on the basis of information contained herein. We recommend professional advice is sought before making important business decisions.

Surfers Hawaiian: Bruce and Jill ride wave of success at Surfers Hawaiian

The Preferred Supplier Directory

26 Thinking MR

42 Profile

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KEY Commercially funded supplier profile or supplier case study

32 Events

Suppliers share their views in one-off, topical pieces

EDITOR

SUBSCRIPTIONS

CONTRIBUTING THIS ISSUE...

Mandy Clarke editor@accomnews.com.au

Gavin Bill

Andrew Morgan, Col Myers, Commissioner for Body Corporate and Community Management, Jonathan Hanaghan, Kelley Rigby, Lynda Kypriadakis, Matthew Manz, Mike Phipps, Sam Steel, Stephen West & Trevor Rawnsley.

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Supplier information or content

November 2023

subscriptions@multimediapublishing.com.au INDUSTRY REPORTERS Grantlee Kieza PRODUCTION Richard McGill

General editorial. Case studies and features may cite or quote suppliers, please be aware that we have a strict ‘no commercial content’ guideline for all magazine editorial, so this is not part of any commercially funded advertorial but may be included as relevant opinion. Happy reading!

EDITOR’S NOTE

Keep those party hats on...

Greetings and a warm welcome to the November edition of Resort News!

October proved to be an eventful month in our industry, abuzz with excitement and marked by prestigious award ceremonies and a remarkable conference debut on the Gold Coast. AccomCon. 2023, hosted by Resly at The Star Gold Coast, followed a highly successful trial of the conference in Cairns, drawing attendees from both the management rights and shortstay accommodation sectors. The conference garnered widespread acclaim for its exceptional content quality, distinguished speakers, engaging panel discussions, and invaluable networking opportunities. Resort News proudly took part as a sponsor, and we are delighted to inform you that preparations for AccomCon. 2024 are already well underway.

Stay tuned for more updates on this exciting event.

referred to as the “industry bible”, for nearly three decades.

Mandy Clarke, Editor editor@accomnews.com.au

The Star Gold Coast also played host to The Best of Tourism Awards Annual Gala 2023 for the second consecutive year, hosted

by Resly and Women In. It was a night filled with music, dance, laughter, sumptuous cuisine, and jubilation. To my surprise and immense honour, I was awarded the Female Leader Award. I extend my heartfelt gratitude to everyone. The support means a great deal to me personally and on behalf of Resort News, a pillar of our industry, often

Turning to the pages of this edition, we kick things off on page 6, with a comprehensive special report that illuminates the state of our industry in 2023. It offers insights, tips, takeaways, and valuable nuggets of information sourced from esteemed figures within the permanent and shortstay management rights space.

But there’s more to discover on page 12, as we investigate the intricacies of the 75 percent rule and the looming concerns surrounding proposed changes to Queensland’s body corporate legislation aimed at facilitating unit redevelopment.

On page 20, Grantlee Kieza engages in a conversation with Chris Podmore, ARAMA’s new Manager of Membership Services. Take a closer glimpse into the life of the man of many talents.

Finally, on page 42, we hear from TOP Award-winning onsite managers, Bruce and Jill Christie. They share their rewarding journey of managing the high-rise Surfers Hawaiian Holiday Apartments, since 2015.

Don’t forget to mark your calendars for Saturday, November 25, 2023, as we invite you to book your ticket to the PRET Australia Awards Night. It promises to be another spectacular evening where we celebrate and recognise outstanding achievers across the real estate and management rights industry.

I have my Emerald Isles-inspired “Cultural Dress” prepared. I’m ready to step on stage and announce the winners of the 5 Star Property Managers Award for the second year in a row.

Without further ado I invite you to enjoy the penultimate issue of Resort News for 2023.

Warm regards, Mandy

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FRONT DESK

November 2023

5

SPECIAL REPORT

Story of a steadfast sector

thriving against the odds

By Grantlee Kieza, Industry Reporter

Amid a backdrop of rising interest rates, inflationary pressures, and legislative uncertainties, the management rights industry appears to stand tall, defying the odds with its resilience and adaptability.

This article takes a closer look at key updates from leading insiders in the permanent and shortstay management rights sector.

Takeaways from 2023 shed light on the industry’s robustness, the challenges it continues to face, and how the future looks.

Permanent management rights market Despite minor disruptions caused by rising interest rates, the long-term prospects for permanent management rights properties remain positive. Although the buyer pool may have shrunk slightly, multipliers are reaching record levels, indicating strong interest from buyers who recognise the inherent value of management rights.

Tim Crooks, Director of ResortBrokers, provided valuable insights into this trend. Noting that historically high multipliers, such as 7x transactions, exemplify the industry’s resilience and highlight sustained demand from investors.

There has been talk that the market is softening a bit, but I think buyers are getting more sophisticated ResortBrokers has now settled some of the highest multipliers in the permanent management rights sector, with transactions achieving remarkable results.

“It’s the large-netting premium assets with a single body corporate and little to no real estate (except perhaps for a small office) that are attracting a lot of interest”, Mr Crooks said.

“We’ve seen the first 7 x multipliers (that I’m aware of) for a permanent management rights business. We’ve also got three 7 x transactions ongoing.

“We recently settled a property in Newstead returning over $650,000 net for its annual profit, which sold at 7 x. We also settled one returning over $575,000 at Toowong. It sold for 7.1 x.

“Currently, I have another large permanent business netting $800,000 in Newstead, it’s just gone under contract at 7.1 x. It’s a very strong multiplier even in a rising interest rate environment.

“Interest rate rises have probably moved multipliers down just a point or two because of the increase in servicing the debt”.

However, he said all the signs are “very positive” for longterm, permanent management rights properties, but admitted there are fewer buyers.

Tim Crooks

6

November 2023

“While I might have had seven to 10 people competing over a premium asset a little while ago, now it’s more like three or four. The number of sales

might not be as high, but we’re still getting very good results.

“There are also more newcomers to the industry than I’ve seen for years. We’re seeing people coming into the sector who’ve had success in other fields such as building or engineering. When they compare management rights with other businesses or franchises, they see real value.

“There is great security in management rights. The rental market is very strong and CPI increases have also been strong.

Everyone needs somewhere to live, so permanent management rights, being an essential business are very appealing.

The permanent market is being driven by a lack of new supply and rising building costs making it tough to develop more residential towers.”

Mr Crooks said in the realm of permanent properties there was solid interest for entry-level assets and “incredibly strong multipliers” for the premium assets at the top end of the market.

movement on the multipliers and that’s largely because of the rising price of the associated real estate so the return on investment is not as high.”

Due to a swift surge in real estate values, Mr Crooks pointed out that the attachment of expensive managers’ units to management rights businesses render them less enticing, primarily due to diminished returns.

He said: “Investors are looking for a return of 10 to 14 percent and if the cost of the real estate component has risen, this affects the overall return.”

Decoupling?

A notable trend in the sector is the emergence of the decoupling phenomenon, primarily witnessed in regions like the Sunshine Coast where real estate value has risen dramatically. The increased value of some owner’s units has necessitated decoupling it from a MR business. A transformation that has sparked diverse opinions and legal discussions about its implications.

Management rights lawyer John Mahoney has previously cautioned about this trend.

“While I totally understand why decoupling is becoming common around places such as Noosa, I don’t like it as a general principle,” Mr Mahoney said. “I think it detracts from the basis of management rights that we have always tried to sell, and that is the work of resident managers.

“There has been talk that the market is softening a bit, but I think buyers are getting more sophisticated,” he said.

“They realise that trying to group four small complexes together to make a larger one is extremely hard work and that’s not what they’re looking for. The properties that are returning $150,000 to $300,000 are where we have seen a bit of downward

INDUSTRY

John Mahoney

“I think there are some buildings that will always have an onsite manager purely by virtue of their size, particularly holiday buildings.

“We are seeing in some of these bigger buildings - Mirvac being a classic example - where the developer will build an office for the manager, but they don’t have to reside there.

“If you go back five years or even longer you could justify buying a manager’s unit based on the income being derived.

“But it just got out of kilter as the prices of the real estate have trebled, in some cases even more, but the income has probably only gone up maybe 30 to 40 percent. In those cases, decoupling is understandable.”

The short-stay management rights space With occupancy levels and room rates at all-time highs and rents through the roof, demand for short-stay management rights businesses in some locations such as Brisbane and Noosa are very strong. In other locations, despite a degree of caution among buyers and banks, sales and multipliers remain stable.

Director at ResortBrokers, Alex Cook, specialises in the sale of larger management rights, particularly in the short-stay sector. He confirmed these are continuing to sell with little change to the multipliers, but he too has seen fewer buyers vying to secure top assets and in some cases it’s taking longer to find the right buyer.

Alex Cook

He said: “Generally speaking, and particularly at the topend of the market, multipliers have been largely unaffected by increased interest rates.

“Having now fully emerged from pandemic conditions, the last 12 months has seen a pent-up demand to buy and sell big, short-stay properties

rights are still selling and we’re getting a lot of inquiries.

Well-priced, well-positioned management rights are still selling

finally translate to a number of noteworthy transactions.

“The demand for big, short-stay MRs is certainly still present, but with corporates such as Accor and Minor probably focusing more on off-the-plan opportunities, and with several key operators now having made significant recent investments, it will be interesting to see how long this will last.

“Many of the big properties are now going to syndicates, and as agents we are doing what we can to assist those putting the syndicates together. Often making key introductions between likeminded investors and operators.”

from traditional ‘mum and dad’ buyers, which impacts the sale of smaller ‘lifestyle’ MR properties. Another challenge is the trend of investors becoming owner occupiers, which has an impact on letting pools.

Michael Philpott, from MR Sales and Tourism Brokers, has seen a big demand for permanent properties. However, with occupancy levels up across all properties, he’s beginning to see a resurgence in short-stay too.

Mr Cook said demand was such that he was always busy with numerous deals to work on.

“The Brisbane short-stay market has come back in force, with several noteworthy sales on record. Annexe Apartments next to Royal Brisbane Hospital (which largely runs off outpatient business) went for more than $8 million, and the Manor Apartment Hotel, a heritage-listed building in Queen Street, went for well over $6 million. Both showed NOPs in excess of $1 million.

“Furthermore, Drift, located in Palm Cove (North Queensland) was sold on actual/part projected NOP of between $1 and $2 million, for circa $8 million inclusive of extensive real estate.

“There are another three or four very large, short-stay MR deals under contract, expected to settle late 2023, early 2024.

The market is definitely still there, but it’s requiring a more proactive and lengthy process to achieve the right result.”

Market reports suggest an upward trend in demand from syndicates but less interest

“Managing the vendors’ expectations relative to the market is a little different.

The multipliers have come back a little bit, certainly with tourism-related properties along the coast. And that’s been reinforced through the sales.

“We’ve seen a multiple drop of 0.5 to 1, and we put that down to supply and demand issues.”

Mr Philpott said there had been a lot of adverse publicity coming out of discussions over revised legislation. The possibility of 25year terms being grandfathered and new agreements potentially being 10-years, creating a two-tiered market and the longer agreements being a premium value.

“There has been some uncertainty in the marketplace, but many properties have record figures on their occupancy levels,” he said.

“There are a lot of people who are based in Sydney and Melbourne who are realising their assets from house sales, and they are moving up and purchasing businesses. We are seeing an increase in demand on the Gold Coast where it has been quiet, while the Sunshine Coast has been powering along.

“We’ve also seen a little bit of a resurgence in Cairns.”

Michael Philpott

He said: “The permanent rentals market has been very strong with a lot of activity by syndicates buying large off-theplan properties because they see them as safe investments.

“Many holiday properties have been impacted by the loss of units, due to owners moving in, especially if they’ve got two or three-bedroom units. We’re seeing some letting pools drop off. On the other hand, we’re also seeing a significant increase in the returns for the units.

“The underlying values and the underlying foundations of the industry remain incredibly strong,” he confirmed.

“There are green shoots in the market. There’s a lot of activity and there are new buyers coming through from Sydney and Melbourne. Well-priced, well-positioned management

INDUSTRY

Mr Philpott said properties “in the $1.5 million to $3 million band” were in high demand in most locations.

“That’s because that’s a sweet price point where there is a number of people around with the money to purchase, above that you’re getting the syndicates in large groups and below that the banks are finding it difficult to finance them because of the ratio of the real estate relative to the management rights business.”

Regarding settlements, Mr Philpott said they were taking longer.

“It’s sometimes taking up to 60 days for finance and then through the body corporate process it might take another couple of months. We’re seeing settlements take between four to six months which is a long time for a business, but there is certainly a great deal of confidence in the industry that management rights remain great businesses for the future.”

November 2023

7

Why are settlements taking so long?

Lawyer Frank Higginson from Hynes Legal said, in part, it’s because body corporate committees are taking “a more engaged position over who they want running their management rights business at their complex”.

more people living in units and committees are more engaged.

and people buying units in holiday buildings,” he said.

“Some settlements do cruise through, and I’ve got one like that at the moment but to be honest they are few and far between.”

“That is putting letting pools under pressure, and I think the housing crisis is going to contribute to that risk.

From his experience committees are looking with more detail “at who they’re getting served up and whether these people can actually do the job”.

“When I look at a listing if I’m advising a syndicated group, one of the first things I look at is the composition of the letting pool. If it’s got a lot of owneroccupiers in it and it’s a nice place to live, my advice is, ‘you’re at risk of losing some of your letting pool to interstate buyers.

He warned: “It’s not going to be as easy a process to take over a management rights business as it may have been a decade ago.”

Transactions: Checks and balances Leading financier Mike Phipps admits there seems to be a lot of buyer uncertainty now.

“It seems that if they’ve had a poor experience with the current manager, they’re going to look a lot harder at the proposed new one,” he said.

Mr Higginson said one of his clients was currently trying to buy a management rights business, but the body corporate was “trying to square up with the seller” and his client was “the meat in the sandwich”.

“They’re trying to make the process as difficult as possible because allegedly that’s what the seller had done to them over the years,” he said.

“Generally, it is becoming more common for the sale process to take longer. I’m not sure whether that’s because of COVID or whether there are

He added that he’s not seeing any concern in the market based on possible legislation changes over the cutting of 25-year terms.

On the other hand, Tony Rossiter, from Holmans, said that from his experience prices for management rights businesses had held up well over the last 12 to 18 months. “And that’s across about 75 transactions that I’ve been involved in, mainly in South-East Queensland, but also in regional areas of New South Wales,” he said.

Frank Higginson

“For some committees, it’s not so much trying to get out of a bad relationship but not wanting to jump from the frying pan into the fire. So, I tell my management rights clients that if you’ve been blueing with the body corporate you can expect the assignment process to be a little bit harder.

When everyone gets on famously there’s usually not a problem.”

“That’s a higher risk than interest rates as far as I’m concerned.”

Mike Phipps

“Assets that we thought would have been snapped up are sitting on the market longer than they should,” he said. “We’re seeing syndicated opportunities showing really strong returns that we would have been run down in the rush for, two years ago. Now they are much slower transactions to put together.”

Mr Phipps said it appeared that multiples for holiday properties were softening.

“We think that uncertainty is driven by the economy, some of it is interest rates and some by the over-volatile political landscape.

Meanwhile, Mr Phipps’ colleague, Cameron Wicking, said while there had been “some softening” of multiplies, and more caution in the market, he had not seen dramatic changes over the last year.

“However, I think the greatest risk to the industry right now is the influx of migration into Queensland

“Anecdotally, we hear that some contracts are taking longer to negotiate and that some buyers fear rates are going to continue to rise. It doesn’t mean that people aren’t moving forward but they’re doing it with caution.

“The fundamentals of the management rights industry are still very sound, with a great future.”

Is MLR stronger than ever?

Trevor Rawnsley, the CEO of ARAMA (the Australian Resident Accommodation Managers Association) said the cash flow of management rights businesses was stronger than ever, and occupancy levels were very high.

Trevor Rawnsley

“The Sunshine Coast had a record year in 2020, 2021 was an increase on that and 2022 was even better again. This year we’re starting to see some seasonal fluctuations, but the legacy is that the properties have held their rates and it’s still a great business to be in.

“We’re hearing from people in North Queensland that it’s a bumper season, but people are booking last minute.”

Cameron Wicking

“I think people are probably being a little bit more discerning when it comes to business value,” he said.

November 2023

“Banks are certainly going through more checks and balances than in recent times.

It is harder to get transactions over the line and I think that’s simply because we are now dealing with higher interest rates.

Tony Rossiter

It is becoming more common for the sale process to take longer

8

“There has been some feeling from some buyers over future potential risks, and they are a little bit more wary. I think that’s reflected in the slightly softer multipliers, but there are still solid multiplies out there, even if market demand seems to have slowed a little.

INDUSTRY

Mr Rawnsley said management rights had withstood COVID, another financial crisis, increases in interest rates and the squeezing of finance.

“It’s harder to get a loan these days,” he said.

© Adobe Stock

“After bad press earlier this year, over interest rates and cutting terms in management rights there was a softening in deals, but a high level of demand remained.

“Certainty equals value. Talk of rises affects the value of a business and investor interest, even if it doesn’t affect the cash flow.”

We’re facing a challenge in finding enough ‘mums and dads’ to invest in these properties 25-year guaranteed income, a rarity in the business world.”

While the sector remains somewhat undiscovered, Mr Hodgetts believes “its potential is unparalleled, provided it gains the exposure it deserves.”

Sam Hodgetts

Sam Hodgetts, a partner at McAdam Siemon, emphasised the enduring strength of the management rights market, “a business that has seen little change in its fundamental appeal over two decades”.

With offices in Brisbane and the Sunshine Coast, Mr Hodgetts highlights management rights as a “low-risk, high cash flow venture, offering immediate returns”.

He said: “This industry offers the unique advantage of a

10

November 2023

Values and multiples Alex McCowan from Accom Valuers said while he hadn’t seen a great deal of change to values and multiples over threats to cut term, “12-odd interest rate rises have had an effect”.

“Management rights entail minimal upfront costs, with banks readily providing financing due to their straightforward and financially strong nature,” he said.

“Skill acquisition is accessible to anyone with a personable disposition, and the year-onyear analysis demonstrates consistent sales activity.

“Though there may be occasional fluctuations in multipliers, these primarily affect properties with specific issues or shorter management terms. Overall, while not experiencing the astronomical growth of recent years, the management rights market appears to be in a strong position.”

In Mr Hodgetts’ view, “this steadfast and low-risk business model holds immense promise for those who recognise its potential”.

“Some businesses have been successful in separating the business from the unit but that is difficult to do and not all body corporate committees are going to agree. In some cases, the body corporates have been reasonable, and they’ve allowed the sellers to separate the expensive unit from the business. “‘If the seller can successfully separate the unit, they then have a business which is saleable, without the real estate component to worry about. I’ve seen more of that happening in the last 18 months to two years than pre-COVID. Back then we didn’t have the big rise of real estate values and it wasn’t such a big issue.”

Mr McCowan said while residential real estate had spiked there had not been much of a decline and some management rights owners had sacrificed the value of the business in the sale when they might have gotten a better price for the business “prior to the big rise in real estate values”.

Alex McCowan

“Some businesses have been affected more than others by the rate rises, especially those businesses with a $200,000 net or less,” Mr McCowan said.

“Those properties with a very high real estate value are nearly impossible to sell. Those with a net profit of $200,000 or less are generally properties with only 15 to 20 units in the letting pool.

INDUSTRY

He said talk around cutting terms had probably made some new buyers a “little more cautious”.

“But certainly,” he said, “the main players – the big investors, public companies, or large partnerships – they’re still buying and paying good market rates. So, they’re not looking at the threats to cut term as a negative.”

Mr McCowan said the industry remained robust despite some hiccups.

“There are lots of different hoops to jump through these days.

“The very slow transaction periods are not helping anyone.

I know of a deal on the Sunshine Coast that was under contract last December and is still not settled. A lot of things can go wrong in those eight to nine months. Those poor vendors must be beside themselves with worry. That’s probably an extraordinary case but five to six months is not unheard of.”

Mr McCowan said holiday-let properties on the Sunshine Coast have “probably come off a bit in terms of multipliers” in some sectors.

“The year 2021 into 2022 was probably the peak time to sell but with the Brisbane market, in terms of permanentlet properties, I don’t think anything’s changed.

“Since about January 2023, we’re still seeing very robust multipliers for quality businesses for ‘corporate’ let businesses with large net profits. They were almost non-existent until

January this year and we’ve valued five or six since then.

They’re in CBD Brisbane and Fortitude Valley, Bowen Hills, Kangaroo Point and South Brisbane, and they’re attracting business people coming to Brisbane for a particular job or meeting rather than a holiday. “‘We weren’t seeing any of those deals in 2021 and into 2022 because trading was very difficult, however operators have had a good 18-month trading with MLR business owners deciding it’s time to sell. As a result, strong market multipliers are being achieved which are up from pre-COVID times.”

Meanwhile in North Queensland…

Cairns-based management rights veteran Calvin Bailey, who has spent more than a quarter of a century in the industry said MR businesses in North Queensland “were going reasonably well at the moment.”

“The market is slow,” he said, “but I think that is everywhere including the south-east. We seem to have a gap in the middle market which has historically been the mums and dads who would have come from New Zealand in a good market or from down south. That’s any property from about $1 million to

restrictions in the northern beaches and Port Douglas.

Basically, they cannot build more than the height of a tall coconut tree, which restricts developers to a maximum of four levels. So, the bulk of the properties end up being threelevel walk-ups, and therefore the average property would only be 15 to 30 apartments.

Calvin Bailey

$2 million, which has generally been about their price range.

“I think it’s a two-fold thing. Partly because you would anticipate a net in that price range of about $150,000 to $300,000 for that sort of property.

“That sort of earnings doesn’t have the same power that it once did, and a lot of buyers are now going into partnerships and buying into larger properties with maybe a yield of $500,000 net.

“So, you are getting up into the $2.5 million levels or more and that has been essentially where most of my sales have gone recently.

“There are still buyers for properties below $1 million, but in the middle price range, there is a gap.

“There are a lot of building restrictions and height

“That is the middle range that would normally be snaffled up by mum and dad managers.

There are a lot of properties up here sitting in that bracket, which is a bit tough,” he said.

“But I’m confident it will all come back.

“We’re doing quite well with multipliers, and I’ve had recent sales with multipliers of up to 5.0 x. That’s for the quality larger properties including sales at the beaches and Port Douglas which were from $3 million to $5 million.

“We have achieved a 5-multiplier, and certainly 4.0 to 4.5 is quite common.

In conclusion, Mr Bailey emphasised: “There hasn’t been a significant shift downward in terms of multipliers. It’s just that we’re facing a challenge in finding enough ‘mums and dads’ to invest in these properties. At the moment that’s what we need.” © Adobe Stock

“The number of properties we’ve been asked to value has probably dropped off a little bit and they’re taking a lot longer to get the negotiations to contract and then through the finance.

By the time it gets to us it could be a couple of months.

INDUSTRY

November 2023

11

NEWS

© Adobe Stock

Loopholes loom over 75 percent rule

By Grantlee Kieza, Industry Reporter

The new laws in NSW allow a majority of 75 percent of owners to sell their entire blocks for redevelopment and contain provisions for minority, or single, objectors to have their legal fees paid by the majority. Instead, the Herald report said it has ended up stymieing deals.

Huge legal fees incurred in NSW have cast a dark shadow over proposed changes to Queensland body corporate legislation designed to make it easier for units to be redeveloped.

In one case, owners were forced to pay huge legal sums on behalf of one ownerdeveloper who’d been the underbidder when he’d tried to buy their building.

Queensland’s Attorney-General Shannon Fentiman said the proposed changes would allow for the termination of a community titles scheme with the support of just 75 percent of lot owners, but recent legal battles over similar legislation in New South Wales have shown that the new laws may open the way for huge and costly court action.

The Palaszczuk Government announced the proposed draft legislation following the October 2022 Housing Summit and said the new rules will make it easier to sell and redevelop ageing or rundown community title schemes in Queensland.

But strata experts say legal loopholes could block the path to implementing the new laws.

Chris Irons, the former Queensland Body Corporate Commissioner, who now runs Strata Solve, Queensland’s leading strata dispute resolution and problem-solving firm, said NSW recently introduced new “75 percent” laws that are essentially the same as those proposed for Queensland.

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He eventually walked away, leaving them with the bill.

One devastated owner in the building affected, in Sydney’s north-west in Macquarie Park told the Herald: “The legislation was intended to protect poor old granny from the ugly developer, but in this case, it was actually the reverse. It protected the ugly developer from the poor old granny.”

Chris Irons, Strata Solve

these law changes will work. The examples in New South Wales remind us that it’s actually going to be very complicated and very time consuming, and there’s going to be plenty of loopholes.

The NSW Minister for Better Regulation and Fair Trading Anoulack Chanthivong vowed to fix the glitches.

“The NSW government is committed to updating and reforming this system, including fixing the loopholes that have made it out of date,” he said.

“The reality is that once there’s a loophole, people will exploit it and the people with the most money will exploit it the most. There are a lot of hidden dangers in this new legislation.

Mr Irons said the very first thing for unit owners in Queensland to remember was that even when these “75 percent laws” were passed in Queensland there will still going to be two methods for terminating a body corporate.

“There has been a lot of talk about the 75 percent rule in Queensland,” Mr Irons said, “and how it is going to free up land, how it’s going to open up development, how it’s going to be a possible solution to housing supply issues.

A recent report by Sue Williams in The Sydney Morning Herald said that the owners of apartments in crumbling old buildings who were offered multimillion-dollar sums by developers to hand them over for rebuilds have had their dreams dashed by legal loopholes.

“There is the standard method which exists right now which is a resolution without dissent,” he said. “The 75 percent rule will apply but only where there are ‘economic reasons’ – and here’s a fun fact – ‘economic reasons’ isn’t defined.

“But there’s a lot of misunderstanding, misinformation and confusion about how

Ironically, the legislation was intended to make redevelopments easier.

“It’s not the case that the law gets passed and the next day you’re going to get turfed out of

November 2023

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your unit - that’s not how it works. There are a lot of steps that you must go through to get to that point and there are going to be several opportunities for challenge along the way which in turn means time delays and costs.

“The best thing people can do is get properly informed.

“Where there is a lot of money at stake and we’re talking big, big money here – then misinformation rules the day.

“It is absolutely imperative that things are done properly right from the start because that will stop any problems and save a lot of time and costs later.

“When it comes to the legal challenges, when somebody objects the body corporate will bear the costs. In a building where there are only six or eight units and there are huge legal fees, that still works out as a lot of money for everybody.

“Some of those legal challenges are not going to go through the commissioner’s office but they will be handled by what’s called the specialist adjudicator.

“That’s usually a barrister and they are absolutely not subject to time control or cost.”

Professor Hazel Easthope, deputy director of the University of NSW’s City Futures Research Centre, said the unanticipated use of the safeguards put in place for the minority owners by commercial interests had proved a difficult hurdle for unit owners wanting to sell.

NSW recently introduced new “75 percent” laws that are essentially the same as those proposed for Queensland

“Now we’re left in a situation where owners have told us that developers aren’t interested in buying older buildings unless there’s 100 percent agreement from owners to sell,” Professor Easthope said.

In the six years since the legislation commenced in NSW, the court has only approved one sale and strata lawyer Amanda Farmer told the Herald the laws have been

“an almost complete failure. What the reforms did was arm some unscrupulous developers with a tool to threaten hold-out owners and achieve their 100 percent more easily”.

Professor Easthope’s paper said that a Macquarie Park site had been rezoned to allow for bigger buildings to provide more homes, but the owners at one complex had been trapped in what they describe as a “never-ending nightmare”.

40 of the 45 owners in two neighbouring buildings agreed to sell them together and put them out to tender in 2016. The dissenting five owners included a developer who’d purchased units in both buildings under different company names.

As legal costs spiralled, the original developer walked away, leaving the owners with massive legal bills and little prospect of redeveloping their buildings.

ARAMA CEO Trevor Rawnsley told Resort News his association agreed with the government that the termination of a scheme should be possible with less than 100 percent approval from lot owners, to prevent one stubborn owner holding out on the others in the hope of extracting a huge windfall.

“But we do not agree that it should be only 75 percent of the vote to terminate a scheme,” Mr Rawnsley said.

“It should be higher. At 75 percent, it means that in a scheme with 100 lots, 25 of those people are voting ‘no’ for their home to be destroyed.”

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November 2023

13

ARAMA REPORT

Win-win relationships the secret to success Everyone in the MLR industry has met their share of ‘Highrise Hitlers’

By Trevor Rawnsley, CEO, ARAMA

Do you need a relationship revival?

Strong, mutually beneficial relationships are the cornerstones of life, whether they be personal or family bonds, or the foundations of success in business.

A win-win situation for everyone involved in a relationship means longevity for that connection, and it’s certainly the recipe for success in the Management and Letting Rights (MLR) Industry.

Good relationships in a strata scheme make for happy unit owner clients, happy tenants and guests and for a happy management and letting rights business owner.

There is much more to MLR than simply knowing all the legislation and making sure you obey the law.

A good resident manager must be a people person to succeed and to be a success in any hospitality business you’ve got to be hospitable.

You have to know how to build and strengthen relationships with everyone involved in a strata scheme, including unit owners, body corporate committees, tenants, guests and tradespeople.

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November 2023

Often you have to find common ground with people in difficult and sometimes antagonistic situations. This isn’t always easy.

But the best resident managers are those who can win over everyone in their building, and even turn opponents on a committee into their friends.

Going that extra mile for unit owners, tenants and guests is the secret to a long and fruitful journey in management and letting rights.

We all work in a service industry and nothing promotes togetherness and harmonious communal living in a strata scheme more than great service.

The most successful resident managers are those who foster a sense of community in the buildings they are entrusted with.

As an example, Bruce and Jill Christie, came to the Surfers Hawaiian Holiday Apartments at Surfers Paradise eight years ago during a difficult time after there had been several different managers in a very short period.

The committee was initially quite hostile to them, but Bruce and Jill turned that attitude around by following the principles of the ‘Triangle of Management’.

It took them some time to achieve this, but they did it by working hard, providing exceptional service, and building strong relationships with the

unit owners and the committee members in particular.

They started organising regular get-togethers on their lower deck so people could mingle and talk about their concerns in an informal, relaxed setting. That way they could all start to get to know each other better, have more understanding in the building, and a stronger relationship.

Jill and Bruce also organise birthday parties for different residents and many of them regard the couple as family.

Knowing that Bruce is a former lifesaver well-versed in first aid, a number of the more elderly residents have his number on speed dial.

Bruce is their go-to guy in an emergency and you can’t get a much stronger relationship than that. Together the couple have built a real community spirit in their building which is paying dividends.

Earlier this year, they even rescued a woman clinging desperately to life next to their marina on a fastflowing Nerang River.

A new tenant reported hearing distress calls to Jill at reception.

She immediately called Bruce and they discovered a woman clinging precariously to the marina. The distressed woman had entered the river at the park next to the Christies’ building and was caught by the outgoing

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current. The king tide was dragging her under the deck.

She was in a state of exhaustion and looked ready to let go. If Bruce and Jill had not got to her when they did the woman would have almost certainly perished.

That’s what you call exceptional service from resident managers.

In fact, the most successful resident managers are those whose enthusiasm for running their complex is infectious.

They tend to build harmonious communities around them.

Maree and Ian Smith have done that among the 230 townhouses they manage, building relationships with their communal Facebook page, establishing a community herb garden, and running their celebrated hidden duck competitions, Halloween activities, and visits of Santa Claus and the Easter Bunny. All these things are designed not only to entertain the kids living in the four complexes that they manage, but to foster a sense of community among the adults.

However, building these strong relationships is not always easy and some managers are better at it than others. That’s why ARAMA has developed its half-day Relationship Revival Masterclass (ARRM) that will run at different times throughout 2024.

Presenter Chris Irons, of Strata Solve, is the former Queensland Commissioner for Body Corporate and Community Management, and he guides the small group through the steps that managers need to make their essential strata relationships work for them.

Chris uses his unique expertise and experience, as well as his training in communications and mediation, to highlight the techniques needed to have the best possible strata relationships.

People who attend the masterclass leave better

equipped to manage the challenging relationshipbased issues at their strata scheme. They also learn the strategies to prevent, or where necessary, address, instances of bullying and harassment.

providing us with good friends and neighbours, beautiful views and wonderful communal amenities in often stunning locations that many unit owners could not afford if they were buying a suburban house there.

These are all vital skills for resident managers to protect and enhance their strata investment.

But community strata title schemes can also magnify problems, and finding common ground with owners, tenants, guests, and body corporate committees is essential.

The masterclass examines what makes a good strata relationship, the red flags that are signs of relationship problems, and how to build greater rapport with owners, committees, and strata managers. It also covers building the best strata relationship of all: the one with yourself.

Good relationships are ones where conflict is nipped in the bud and both parties can find areas of agreement.

Australian Resident Accommodation Managers Association is the peak industry body representing the interests of people who are involved in management rights.

Almost everyone in the MLR industry has met their share of ‘Highrise Hitlers’ and ‘Condo Commandos’ who end up on committees.

The masterclass teaches managers that self-reflection is a sign of strength, not weakness, and how you can analyse what you’ve been doing and make it better going forward.

And sometimes in strata you have to live alongside people who aren’t suited to living in that environment because of their personalities.

You’ll also learn how to find common ground even with people opposed to your views.

A community title scheme is like a magnifying glass of society. It can amplify so many of the good things we enjoy,

For membership enquiries:

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In the MLR industry, building good relationships means building a good business.

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15

STATE REPORT

Cashflow rules, or does it?

The unique management rights model Bankers are good judges - they love them - and why wouldn’t they?

A good return on investment is great but you need to retain the capital value of your business

These are businesses that carry no stock-in-trade, have no stock write-offs, carry no debtors and they contract with an owners corporation that cannot go broke!

Banks consistently lend 60 percent to 70 percent against the goodwill of these businesses.

Try getting that sort of margin on most other businesses!

By Col Myers, Small Myers Hughes

Management rights are somewhat unique businesses. They generate good, steady cashflow and mostly retain their capital value.

Management rights businesses rarely fail, but when they do, it is usually for one reason - personality conflicts with owners or strata committees in the day-to-day running of the business.

Multipliers Management rights in NSW are purchased based on ‘multiples’ of net income. These multipliers

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currently range between 3.5- and 6 x net income. A multiplier of 5 is equivalent to a 20 percent return on the business investment.

These high multipliers are unique to the management rights industry. The businesses are regarded as safe, long-term investments, where recurrent income is transferrable.

Contrast this with (say) my legal profession, where businesses are sold on multipliers of 1 or 1.5 x net income. This is because, unlike management rights, the income of most law firms is built around a one-on-one service and is not necessarily regarded as ‘sticky money’.

Income Permanent let complexes generate steady income but always remain at risk of units being sold to owner occupiers.

Holiday or serviced apartment income can fluctuate somewhat, but there are a number of other areas where income is generated.

Returns on investment usually vary between 15 percent and 20 percent but, overall, they generate a good return on investment.

The key: Retaining capital value

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November 2023

A good return on investment is great but you need to retain the capital value of your business.

Capital value is directly tied to tenure, and this is where things can get a little bit tricky.

Building management and letting agreements have start dates and end dates. In NSW, the maximum term for a Building Management Agreement is 10 years. There is, however, no term limitation on

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letting agreements. However, these contracts expire unless renewed. Ultimately, retaining capital value is directly related to being able to ‘top-up’ the term of your agreements. This renewal or re-engagement process can become highly emotional and needs to be carefully managed.

When buying management rights, it is important to look at the type of complex you might purchase. It is always best to look for complexes that would not function properly without having an onsite manager. In these types of complexes, term should be irrelevant to the owners corporation. All parties should be more concerned about the manager’s performance, rather than the term of the agreement.

Owners corporations who are happy with the performance of their managers grant ‘top ups’ without any issues.

Consequently, the key to regularly ‘topping up’ your Building Management Agreement to the 10-year maximum tenure in NSW is ensuring that you: 1.

diligently attend to all your duties as set out in your Building Management Agreement;

2.

maintain good relationships with Strata Committee members and fellow owners; and

3.

provide your owners with regular updates of all the good work you do around the complex – and don’t keep it a secret (which many managers unfortunately do!).

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BCCM REPORT

Frequently asked questions:

Termites & pest control

The warmer weather at the start of spring can trigger increased termite activity in properties run by bodies corporate.

Therefore, bodies corporate need to keep on top of inspections and treatments, as preventing infestations can save thousands of dollars.

•

Building format plans also known as building unit plans; and

•

standard format plans also known as group titles plans.

Who is responsible for maintenance at my body corporate scheme?

Contact Titles Queensland on 07 3497 3479 to obtain a copy of your body corporate’s registered survey plan.

Pest management in a complex can be both the responsibility of the owners and bodies corporate. Sometimes it can be difficult to determine who is responsible for what. An important first step is to find out which plan of subdivision your body corporate has been registered under.

Once you know the boundaries of the lots and common property from the survey plan, then you can determine the maintenance responsibilities within your community titles scheme or development.

Bodies corporate in Queensland are registered under a plan of subdivision. This is recorded as a survey plan which shows the boundaries of the common property and the lots in that scheme.

There are several types of survey plans. Boundaries will be defined differently depending on the type of plan registered. The two common types of survey plans are:

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© Adobe Stock

By the Office of the Commissioner for Body Corporate and Community Management

November 2023

Read more about maintenance responsibilities by format plan on our web pages.

Does maintenance include pest control?

Maintenance responsibilities, for both an owner and a body corporate, includes work that is needed to prevent damage.

Maintenance may also extend to undertaking pest control that is necessary to keep the lot and common property in a good and structurally sound condition. For

example, a body corporate or lot owner may have to take steps to prevent termite damage to the common property or lots.

See the adjudicator’s order in Magnetic International Resort Hotel for more on who is responsible for pest control.

What maintenance must a body corporate do?

A body corporate (the collective of lot owners) must maintain the common property in a good and structurally sound condition.

Generally, this includes the body corporate being responsible for any pest inspection, prevention and treatment work carried out on common property.

Each year the body corporate must fix an administrative fund budget and a sinking fund budget. Owner’s contributions (levies) to the administrative fund budget cover the regular maintenance of the common property.

What maintenance must owners do?

The owner of a lot must maintain

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their lot in good condition, particularly areas of a lot that are readily observable from another lot or common property but be kept in a clean and tidy condition.

A lot owner is responsible for any pest inspection and treatment work that is needed within their lot.

Maintenance can include work that is needed to prevent damage, such as termite infestations.

Who is responsible for damage caused by termites?

If a body corporate does not maintain its common property and it results in damage to a lot, a body corporate may be liable for the damage.

Likewise, if an owner does not maintain their lot and there is damage to another lot or the common property, the owner who failed to comply with their legislative responsibility may be responsible for the damage caused by their inaction.

Can owners jointly carry out preventative routine termite and pest control?

It can be cheaper and easier for the body corporate to organise work, or a service, for many lots, instead of each owner or occupier individually organising work on their own lot.

To benefit lot owners and occupiers, the body corporate may offer to supply or arrange for services that owners or occupiers are responsible for.

For example, maintenance services such as cleaning, repairs, painting, pest control or extermination and mowing.

Bodies corporate often does this at the same time as it does work or organises services that it is responsible for on common property. In some instances, it can save money for individuals if the service contractor offers a bulk discount. It can also be more convenient to have the tradespeople onsite at one time.

This type of arrangement is called a “supply of service” agreement.

The offer is optional. Lot owners cannot be forced to participate in a ‘supply of service’ arrangement. The body corporate can only supply a service to an owner or occupier if it has an agreement with that individual owner or occupier.

A body corporate (at a general meeting) or its committee cannot pass a motion that requires lot owners to accept an offer to provide a service for the benefit of owners and occupiers of lots. Additionally, a body corporate cannot pass a by-law that compels or implies agreement from a lot owner or occupier to participate in such an arrangement for the supply of services. A supply of service process requires individual agreement from each owner (Somerset Park – Order 0984-2018).

supply of service agreement with the body corporate must reimburse the body corporate for their portion of the costs of the service. This money is not to be used as part of the body corporate levies.

However, the charge for an agreed service can be included on the levy notice as a separate amount in addition to the administrative or sinking fund levies.

What happens if an owner is not performing their required maintenance?

If an owner does not perform the required maintenance of their lot and there is a risk to the common property or other lots, a body corporate may carry out the work required of owners and occupiers. The body corporate can then recover the reasonable cost of carrying out the work from a lot owner as a debt.

•

an adjudicator’s order; or

•

the order of a court.

How can we resolve a dispute about who is responsible for existing damage?

Each situation needs to be considered on a case-bycase basis. Generally, you should find out where the infestation originated, and who was or is responsible for maintenance at the site where the outbreak started.

A few examples, in the case of termites: •

This applies to work that an owner or occupier is obliged to carry out under: •

The Act or one of the Regulation Modules, including a provision requiring an owner or occupier to maintain lot in the scheme;

•

a notice given under another State Government or Commonwealth Act;

•

the community management statement for the scheme, including the by-laws;

adjudicators have held that lot owners would usually be responsible for taking measures to prevent termites from entering their lot (Clearwater on Burleigh Cove - Order 0279-2020). Where there has been evidence of termite infestation on the common property for the scheme, each lot owner has an obligation to take preventative measures to maintain their lot in good condition.

•

In a building format plan, with both common property and an exclusive use area immediately adjacent to the building, it was found that an infestation originated from common property. In this example, the adjudicator determined that the termite infestation had resulted in work needing to be carried out to repair the consequential damage to an owner’s lot. The adjudicator found that the body corporate was liable to pay for the damage to the owner’s property due to their failure to carry out inspections and ensure the termite barrier in both common property and the exclusive use areas was maintained (Torquay One Eight Five – Order 0892-2018).

Under a standard format plan of subdivision,

•

For a standard format plan, in situations where the lots in a building have a common wall with other lots, it has previously been found that it would be sensible for the owners to agree on the implementation and cost of a preventative termite treatment and system. The body corporate can coordinate the service with the owners’ agreement.

(Garden City Estate – Order [2007] QBCCMCmr 531 (September 4, 2007).

For more information, see our webpages on maintenance in a body corporate. You can also search adjudicator’s orders on AustLII. If internal dispute resolution attempts have failed at your scheme, you may consider lodging a dispute resolution application.

If you have another question, please call the Information and Community Education Unit on 1800 060 119 or submit it online.

© Adobe Stock

The body corporate can charge its costs as part of the supply of service agreement with an individual owner or occupier.

The body corporate cannot charge users of the service for its administrative work and cannot make a profit from the supply of the service.

Supply charges for the service must be paid by each user.

For example, the lot owner who chooses to enter into a

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November 2023

19

PERSON OF INTEREST

Chris Podmore’s service for others has its rewards Chris and Chezelle Podmore

How often do you get called out for the SES?

By Grantlee Kieza, Industry Reporter

Grantlee Kieza talks with Chris Podmore, ARAMA’s new Manager of Membership Services - did you know he is a man of many talents?

It’s on a completely voluntary basis. You get messages to come out and it’s completely up to you. During storm season I’d be out nearly once a week helping, but through the year the SES does a lot more than storms and floods. I’ve helped with lots of missing person searches and even body retrievals.

You’ve been an SES volunteer for many years. How did that come about?

It started with the Queensland floods in 2011 when I was working at the Riverside Hotel in South Brisbane. Our car park and the first level of the building were absolutely destroyed, the restaurant and the office too. I was amazed at how many volunteers just walked in off the street and helped us clean up. I thought that was fantastic, and I started to think I probably should give back to the community for this. So that’s why I joined the SES (State Emergency Service). And I’ve been with them ever since - 12 years.

A lot of the skills that I learned at the SES have really helped

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November 2023

How did you get involved in management rights?

me work in management rights.

During last year’s floods, I was able to go down to my SES depot get a tonne of sandbags, put them on the back of my ute and bring them to the two different buildings I was managing, Riverside and Castlebar Cove, a luxury residential complex at Kangaroo Point. I learned how to set up a sandbag wall and how to use the different terrains of the buildings to the

best advantage to make really good boundaries and stop the water coming in. At Castlebar, I turned up with 25 sandbags and people said that’s not going to be enough. But my training showed me that I had enough for the job, and I knew exactly what to do. I was able to give everyone a quick course into how to really manage a building and protect it from floods, too.

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I was born in Sydney, but I’ve lived in Queensland prett y much all my life. Working in management rights started when I was in high school, and in 2004 I did work experience in hotels. I started working at a place called West End Central Apartments. It was a management rights hotel, but I didn’t realise that at the time.

I did about 12 months of work experience there. Then I left high school and earned a Diploma of Hospitality Management at Southbank TAFE. After getting my diploma, I worked at a couple of small hotels. I worked for a hotel

Riverside since 2015. I wish I had gone to more of ARAMA’s networking events and made these connections earlier in my career. I just did not understand the full depth of ARAMA’s resources until I started working for them this year.

called the Diana Plaza in Woolloongabba, across the road from the Mater Hospital. I held a couple of different jobs there.

I was the weddings and events coordinator for a while, and also food and beverage supervisor.

Eventually, in 2009 I went to the Riverside Hotel, initially as the food and beverage supervisor.

It’s a big hotel with 162 lots, two conference rooms and a restaurant. I worked my way up from food and beverage supervisor to restaurant manager, then conference and events coordinating, housekeeping management.

In 2015, I became the assistant hotel manager and that’s how I became seriously involved in management rights.

Riverside is a big property...

Yes, 162 lots and 24/7 service.

With studio hotel rooms and one-bedroom apartments, it’s a complete mix of short and long-stay, owners also live in the building. Out of 162 lots we managed about 110 and the remaining 50 lots were switched up between owner occupiers and outside rentals. The director at Riverside, Mike O’Farrell, also has a management rights consulting company and sometimes I would help him on jobs, showing clients systems such as MYBOS. Working for Mike was a real education in the business because he knows management rights back to front. I learned a lot from working with him and I met a lot of other people involved in management rights including Trevor Rawnsley, the ARAMA CEO. I always found management rights interesting. It got to the point where I wanted to start doing something more involved in the sector. During COVID Riverside was quiet so I took on a secondary role for the company as a caretaker at Castlebar Cove.

Management rights throw up a lot of challenges. What are the biggest ones you’ve had to deal with?

In 2022 when the floods came, I had to manage both properties, right on the river.

Was there much damage?

Castlebar only had its garden and pool area flooded, which wasn’t a huge drama, but the Riverside Hotel had its car park flooded again. I had been there for the initial flood in 2011 when the whole car park and first floor went under. But this time I was more experienced about what to expect and I was better able to defend the property.

You worked at Riverside from 2009 until the beginning of this year, what does your new job at ARAMA involve?

As ARAMA’s Manager of Membership Services, my main role is to look after the members.

Helping them sign up, organise their renewals and assist with any of their membership needs.

When members call up with an issue, I can usually refer them to the great resources ARAMA has on its website. For example, I might be able to say to members “now look at this great webinar on fees and charges”, or “we have a great webinar on how to protect, defend and grow your letting pool. You might want to watch that”.

The floods were the biggest issue I’ve faced. COVID was another one, and of course, I had to tackle many of the same things that most managers deal with, including difficult committees and unit owners, break ins and assaults. It can be a very tough industry.

But in saying that, when you have guests who come and say what a wonderful time they’ve had, or you have tenants and owners that cannot thank you enough for the service you provide, that is the real reward.

I believe in this world those are the moments you need to focus on instead of the negatives.

What do you do to relax away from the industry?

My wife Chezelle and I love going camping and four-wheel driving. Chezelle works in financial planning but when we take a break, we go to places such as Fraser Island, Straddy, and Double Island Point. We sometimes go inland too, but there’s more to do on the beach. I love fishing as well.

You are confident about the future of the industry?

Yes, it’s a fantastic industry to be involved in and as long as ARAMA is around it will continue to flourish.

My previous director Mike O’Farrell took me on at the age of 20 and while I just started working in the restaurant, he nurtured my career.

Management rights has given so many other people the opportunity to have a good career in a great industry. What I loved about it from the start is that as opposed to just working in a normal hotel you also have that owner liaison role (dealing with lot owners) and that adds that extra challenge. It makes every day completely different.

Some days could be a real challenge depending on the personalities of the owners, you get those points where you come across a particular owner who absolutely hates you but you’re able to turn it around and have a great relationship.

Sometimes you can turn the relationship around so much that they even give you their units to manage.

That’s a wonderful experience because you know you’ve done your job well.

Most managers are really good at what they do, but some might not have come from a hospitality background and it takes them a while to develop that customer service.

If they require more specialist assistance then I can connect them with ARAMA’s growing list of supporters such as lawyers, accountants, training companies and other industry specialists.

You also help set up and run a lot of the ARAMA events.

Yes. I’ve learned so much about management rights since joining ARAMA, things I didn’t know even though I’d been involved in management at

INDUSTRY

November 2023

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LEGAL EASE

© Adobe Stock

Preparing to sell some cases, it can be an arduous process and in a few cases has caused sales to ‘fall over’.

However, once that final hurdle of body corporate consent has been successfully navigated, the conveyance is done and the sale process is over. You’ve made it.

By Matthew Manz, Mahoneys

Sellers of management rights will be intimately familiar with this course of events. After a number of years of working and building your business you come to the conclusion that it’s time to sell. You talk to an agent. The agent lists your business for sale. You wait. For some sellers a buyer is found quickly, and the wait is short lived. For others the wait is longer.

In some extreme cases it can be years before a buyer can be found. But finding a buyer is only part of the process.

Next you have to negotiate a price and a contract, then cross your fingers and toes and hope that the buyer’s accountant verifies the net operating profit. After that you pray that there are no hidden problems in your caretaking and letting agreements and that the buyer can get finance. When you get to the point where the conditions of verification, legal due diligence and finance are satisfied you breathe a sigh of relief, but you’re still not there.

As some sellers can attest, body corporate consent is not as straightforward as it used to be. In

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November 2023

The smallest adverse detail that arises during any of the above steps has the potential to cause delays in your sale or in some circumstances for your sale to ‘fall over’ entirely.

It is impossible of course for sellers to safeguard themselves against all possibilities. However, there are a number of things that you can do to minimise the possibility of significant problems arising during your sale.

Here are a few of the key items that we suggest sellers investigate prior to sale and settlement.

Is a transfer fee payable?

If you sell within two years after becoming the manager, the body corporate is entitled to charge a transfer fee of three percent of the business sale price in year one and two percent in year two. Remember, unless you are selling due to unforeseen hardship, this is a mandatory fee.

What is the net operating profit?

Correctly determining the net operating profit of the business from the outset is the key to having a smooth transition through the financial verification process. We strongly recommend that sellers have their experienced management rights accountant prepare their figures for sale. Having figures prepared by an experienced professional significantly reduces the possibility of problems arising from the buyer’s accountant’s verification.

Do I have signed letting appointments for all lots in my pool?

Make sure that there are signed letting appointments for all of the lots in your letting pool. These are essential for commissions to be charged to the owners.

If there are some missing then you should do everything in your power to get them signed.

Are my letting appointments assignable?

Make sure that all of your letting appointments are assignable.

Your POA forms 6 will of course be automatically assignable however if you do have any PAMDA forms 20a then the assignment section should be ticked and initialled by the owner. That being said our strong recommendation is that you wouldn’t have any forms 20a as you would have transitioned all owners over to forms 6 some time ago. Whilst old forms 20a might still be valid you are likely to receive objection and probably rejection of them from a buyer’s accountant.

How long have I got left on my agreements?

Most buyers (and their banks) look for terms of close to 10 years if the complex is in the Standard Module and around 20 years or more if the complex is in the Accommodation Module.

This is critical from a financing point of view so make sure that you are aware of the term remaining and give the correct information to your selling agent.

Have the options in my agreement been exercised correctly?

An issue that has arisen during a

MANAGEMENT

couple of recent transactions is where a manager has forgotten to exercise an option in their agreements. In both instances this issue has completely derailed the transaction as the only way to fix the issue beyond doubt is to have new agreements passed by the body corporate at a general meeting.

Accordingly, look through your agreements to ensure all options have been exercised correctly. If you’re unsure seek advice from your solicitor.

Is the buyer ready for the committee?

Usually, the caretaking and letting agreements place the onus squarely on the shoulders of the seller to ensure that the committee has received all of the information required to consider an assignment.

It is therefore a matter for a seller, and the seller’s lawyer, to make sure that they have this information from the buyer.

To ensure that a sale progresses as smoothly as possible through the assignment process, we strongly recommend to all sellers that they, their lawyer and their agent make it clear from the outset what items are required to be given to the body corporate. Ideally, a seller would have all the above information from the buyer before the matter is ‘unconditional’ as delays in providing this information to the body corporate will inevitably delay settlement.

We have recently published an article about the documents and information a buyer should collate for the purpose of seeking body corporate consent and can provide you with a copy of that article on request.

As they say, proper prior planning prevents poor performance.

BY ALL ACCOUNTS

Fringe benefits tax:

The hidden forgotten tax Housing fringe benefits

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A housing fringe benefit may arise when you provide accommodation to your employee rent-free or at a reduced rent where that accommodation is their usual place of residence.

By Jonathan Hanaghan, Director, Jonathan Grant Accountants

With the festive season kicking off I thought I would discuss some of the fringe benefits tax implications for Christmas parties and staff gifts and review some of the common fringe benefits associated with the accommodation industry in general.

If you provide certain benefits to your staff or their associates, you may be up for fringe benefits tax (FBT). It is important to note that the benefit must be as a result of employment and not business ownership, for instance, a benefit provided to a shareholder of a private company who is not and never has been an employee or office holder does not constitute a benefit for fringe benefits tax purposes.

This tax is separate from income tax and is based on a ‘taxable value’ of the benefits provided, which is calculated according to the categories the benefits fall into. The Tax Office has even given FBT its own tax year, from April 1 to March 31. The upside for your staff is that they do not then have to pay income tax on the value of the benefits and payment of the FBT is tax deductible to the employer.

Entertainment & gift fringe benefits This is a common benefit

provided for the typical work Christmas party, usually by way of food, drink or recreation.

Generally, the more elaborate the meal and the inclusion of alcohol the more likely the meal becomes entertainment. Also, where the food or drink is provided affects the classification.

Provision of meals and drinks off your business premises for instance a restaurant is more likely to be entertainment and subject to fringe benefits tax.

One major consideration is the “less than $300” minor benefits exemption and the now recognised fact that the ATO will accept that different benefits provided (gift and Christmas party) at the same time are not added together when applying the threshold. Essentially this means that both the gift and Christmas party entertainment may be exempt from FBT even if provided at the same time, as long as each cost less than $300.

Car fringe benefits If you make a car you own or lease available for the private use of your employee, you may provide a car fringe benefit.

For fringe benefits tax (FBT) purposes, a car is any of the following: •

a sedan or station wagon;

•

any other goods-carrying vehicle with a carrying capacity of less than one tonne, for example, a panel

van or utility (including fourwheel drive vehicles); and •

any other passengercarrying vehicle designed to carry fewer than nine passengers.

A car is taken to be available for the private use of an employee if the place of business and residence are the same for instance - standard management rights business.

There are some circumstances where the use of the car is exempt from FBT. For example, an employee’s private use of a taxi, panel van, or utility designed to carry less than one tonne, is exempt from FBT if its private use is limited to: •

travel between home and work;

•

incidental travel in the course of performing employment-related travel; and

•

non-work-related use that is minor, infrequent, and irregular (for example, occasional use of the vehicle to remove domestic rubbish).

The most important message to reduce any potential car FBT is to seek advice from your accountant to see whether it is worthwhile completing a logbook for at least 12 concurrent weeks.

This will depend on the value of the car and the expected business use percentage.

MANAGEMENT

A unit of accommodation includes any of the following: •

a house, flat, or home unit;

•

accommodation in a hotel, motel, guesthouse, bunkhouse or other living quarters;

•

a caravan or mobile home; and

•

accommodation on a ship or other floating structure.

This is a common benefit provided to managers within the accommodation industry and in particular to businesses that are operated through modern corporate partnerships.

It is clear the ATO does not care that the accommodation may be attached to a busy office that is open seven days a week with the managers being on call 24 hours a day.

The ATO still has an opinion that a housing benefit is being provided. Generally speaking, the benefit will be calculated at 75 percent of the market rental for the dwelling in question.

For example, if a manager’s unit would ordinarily rent for $600 per week, then the annual benefit is calculated at $600 x 52 x 75 percent = $23,400. This amount can be reduced by payments made to the employer by the employee or associate for the use of the accommodation.

In summary, if you are providing any benefits to employees, it is important to seek advice from your accountant as the ATO is reviewing more of these arrangements every year, and as the saying goes…

“There is no such thing as a free lunch”.

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MOTEL MARKET

That’s the bottom line know after the asking price is the net profit. Further to this, all the other information about this business has a diminished degree of interest.

By Andrew Morgan, Motel Broker/Partner, Qld Tourism & Hospitality Brokers

Any business survives (or thrives) when it produces a strong profit. Whether it’s a sole trading hairdresser or a listed public company such as one of the big four banks.

The fundamentals are the same, produce a strong profit and those profits ensure the survival of that business and are then spent within the community at other businesses whether they be petrol stations or supermarkets. The publicly listed company will distribute profits as a dividend to investors who will spend those funds at businesses within their community as well.

There are always different ideas, beliefs and information that people work from, and in this case we are referring to the importance placed on revenue and profits. Each has an important role to play in the success of any business, but which is more important than the other?

Different schools of thought say things like, “concentrate on the top line and the bottom line will take care of itself”. Others say, “it’s not what you take, it’s what you make”. At the end of the day, both are correct (with certain caveats attached) but the bottom line or net profit of the business takes over when all is said and done.

When a potential investor is considering buying a motel business, the first piece of information they want to

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Comments are often made in regard to the revenue of a business not being high enough.

This seems like a strange query particularly when one has the revenue, expenditure, and profitability laid bare. Unless one is planning on operating the business less efficiently, at a lower profit margin or higher cost base, why is the revenue not high enough?

Usually, a new owner or operator of a business will be focusing on reducing overheads and improving profit margins, to increase the net profit and therefore the value of the business. The value of any business is largely determined by two factors, the return on investment (capitalisation rate or yield) and of course, the net profit result of the business against this yield.

A business producing a high profit margin will generally have low overheads and therefore a high profit percentage in relation to revenue. Vice versa for a low profit margin, with high operating costs incurred to produce revenue. Every business will produce a different profit margin.

Two similar motels for example will have so many different variables that will affect what profit margin it achieves. The Net Operating Profit (NOP) of any type of business is the determining factor for assessing the business’ value. No valuer determines a business’ valuation on what revenue is produced.

The value of cash flow to a business relates directly to the day-to-day operation of the business, not the ongoing NOP over the period of say a year. It stands to reason though that any business with a higher sales revenue that also has higher operating expenses, may therefore have the same cashflow problems that a motel with lower sales and lower expenses has.

Annual Sales Revenue Annual Net Operating Profit Net Profit Margin Return on Investment Freehold Value in the Market

Motel A 27 units

Motel B 27 units

$1,000,000

$750,000

$400,000

$400,000

40%

53%

14%

14%

$2,850,000

$2,850,000

The simple table above can help explain.

With both these motels being valued at the same value in the market due to their returns on investment being the same, why would a lower revenue make Motel B worth less than Motel A? These motels have very different revenues; however, their NOP is the same. There can be numerous reasons for this, however, a few explanations may be that one is operated more efficiently than the other, because one has a source of revenue that is not as profitable as others, or because the particular location attracts higher operating costs, and so on.

A big one is often the underselling of a unit. A 90 percent occupancy rate on a tariff 20 percent less than what is achievable will do it! In other words, discounting! The easiest way to create a higher cost base and operate less efficiently.

Either way, the business with the lower sales revenue is not worth any less than the one with the

MANAGEMENT

higher revenue. I would assume that the business with the lower revenue and higher profitability could end up being more attractive in the market than the motel with the higher revenue.

This could be due to it being potentially less labour intensive or having a lower level of risk than the other, by being able to operate at a lower cost base. Without foundation, one may argue that Motel B with a lower revenue than Motel A carries a higher risk level.

Only if the next owner plans to operate it less efficiently.

As mentioned, a registered valuer who is doing a calculation on a motel property or business will base their valuation on a capitalisation rate of the NOP of the business, not the revenue. Therefore, in the above example, with all else being equal, Motel A and Motel B will be valued at approximately the same level, even though they have substantially different revenues.

GOOD GOVERNANCE

Is your contractor licensed for building work?

Building work valued at over $3300 requires a license in place, and the building works contractor was not licensed (or, at least, not properly licensed).

By Lynda Kypriadakis, Diverse FMX

Anyone who is involved in the coordination and arrangement of building work on the common property of a strata scheme usually understands that trade contractor licensing is required for almost all building work, but how many of us are routinely checking the trade contractor license for verification?

If you have a duty under a Caretaking Agreement to coordinate and arrange building works, obtain quotes and process invoices on behalf of your body corporate (which 99 percent of Caretakers under Management Rights do) then ensuring the contractors that work on the common property are properly licensed is likely to be an inferred duty under your agreement. If you’re not sure about your responsibilities and liabilities, legal advice is highly recommended.

Who is checking for trade contractor license status before recommending quotes for voting and approval? Not all of us, that’s for sure…

Recently I’ve noticed a spate of bodies corporate in Queensland reaching out to our team for assistance in managing defective building work issues, only for me to discover that there was never any contract

One project was almost $1,000,000 of combustible cladding replacement works.

The contractor did not hold any license whatsoever with the QBCC. This is what would be described as unlicensed building work and cannot be certified or insured. The body corporate in question cannot upgrade themselves away from the Affected Private Building status because they can’t get the mandatory compliance certification, because the contractor wasn’t licensed.

As combustible cladding is assessable building work and subject to strict legislation, it is impossible to obtain regulatory compliance on cladding upgrade works in circumstances where the contractor has no license, so for this project, all the cladding needs to come off and start again.

Licensing requirements aren’t just strict for combustible cladding projects; they affect any building work over $3300.

Another project we just found out about had a window cleaner doing $100,000 worth of façade repair works. Again, no license whatsoever. In addition to that, both unlicensed contractors have big websites advertising their building works to industry, but absolutely no license to do the works.

So how are unlicensed contractors getting work?

A QBCC licensed trade contractor is only allowed to quote for work within their class of license, so in the

first place, these unlicensed operators should not be quoting on works that they have no license for. Unfortunately, we can’t rely on all contractors to be honest about their licensing shortcomings, so we all absolutely 100 percent must check, check, check on each occasion to avoid being a party to unlawful building work.

What happens if there is an incident during the job, and your contractor is not licensed?

anything that includes the erection or construction of a building, including renovation, repair, alteration, extension, or improvement. It also includes project management of building works.

•

Building work valued at over $3300 requires a license. Any building work or project management services quoted over $3300 in Queensland requires a QBCC license.

You must check. You can easily search to check that your building works contractor is licensed by googling QBCC license search on the internet.

•

Building works contract: Any building works over $3300 also require a contract for the works.

The QBCC has free building works contracts.

For works up to $20,000 you will use the Level 1 Contract; for works over $20,000 you will use the level 2 Contract template.

Short answer is that it’s a nightmare! The adverse implications could include: •

Voided body corporate insurance if a claim is required.

•

Show cause notice may be issued from council for unapproved building works.

•

No certification available on the works.

•

No warranty available on the works.

•

QBCC unlicensed building work claim/ infringement penalties.

How to exercise vigilance and avoid unlawful building work What should building managers, caretakers, committees and strata managers that assist with obtaining quotes and giving work order instructions to building works contractors be looking for?

•

Define building work: Check the definition of the works before getting quotes. Definition of “building work” is basically

MANAGEMENT

What if it’s too late and you’re already doing business with an unlicensed contractor?

I’ve got two words for you… legal advice. And I would get that it fast.

As a general rule of thumb, if your project is valued at over $50,000 it is best to consult with either a project manager or private certifier before tendering the building works to ensure that you are: •

Inviting properly licensed contractors to quote;

•

getting any mandatory building permits taken care of before going to contract; and

•

entering into a common commercial building works contract in accordance with local legislation.

November 2023

25

THINKING MR

At your service no longer being too worried about the dreaded plague.

Talk about mass hysteria.

Might be lessons in that for the current wailing over other expected catastrophic crises, but I digress.

By Mike Phipps, Mike Phipps Finance

The ‘Managing Director’ and I recently returned from a sojourn to Canada and Alaska.

Our mission, as I’m sure some of you will appreciate, was to use some COVID cancellation credits and continue our plan to spend every last cent before we fall off the twig.

We flew Air Canada and while the pointy end is not up to some more expensive standards the crew are cheerful and they provide enough sleeping elixir to take advantage of the bed.

The attitudes of the flight crew were generally really positive and a good example of adding some value to the experience.

Given a choice, I’ll take attitude over aptitude every time.

The train ride leaves from Vancouver. The first day provides insights into what Canadians in outer Vancouver

Off the train and on to the coach. I’d call it a bus but apparently that’s a term that offends coach captains, so lesson learned. Our captain,

Elizabeth turned out to be a highly experienced heavy machinery operator, a woman of great warmth and man, could she drive! Anyone who can stop a 50-seat bus from 100 km/h to zero in three metres without hurting anyone is alright with me. Said emergency stops announced the sighting of wildlife, of which there was lots.

Turns out September in Canada is the perfect time to witness a range of magnificent creatures fuelling up for the winter ahead.

Back to Vancouver and on to the boat. Here’s the thing.

The MD arranges most of our travel and I tag along. It’s only a matter of time before she sends me to some godforsaken destination from which I won’t return… But, I had it in mind that we were going to Alaska on a small boat which would inch its way up the inside passage and reveal vistas unavailable to those mega size cruise liners you see on the travel shows.

Imagine my horror to discover that the Koningsdam is bloody huge, with 2650 passengers and 1036 crew. No turning back now, so we queue for four hours at Vancouver Harbour as we navigate the usual checkpoints and endure the dubious pleasure of interacting

© Adobe Stock

Hmmm, COVID credits.

Whatever happened to COVID? We seem to have gone from being locked in our houses clinging to our last square of toilet paper with the stormtroopers outside, to

Our trip was a combo of rail, coach and boat with The Rocky Mountaineer train ride and bear spotting top of the list. There was some initial disappointment when the MD discovered The Rocky Mountaineer was a rail journey and not a well buffed young climber. Thankfully, all was forgiven when she realised my desire for a bit of danger might get me eaten at some point.

do when something breaks down. That is, they leave everything exactly in situ.

And so, from what is a very comfortable rail carriage, one gets to witness mile after mile of car bodies, broken machinery, and back yards in various states of repair. The views do improve but I suspect the traveller would see just as much from the highway, which follows the train line for most of the two-day journey.

What the car driver would not experience is the superb service offered aboard the train. The professionalism of the staff became apparent late on day one when, after numerous delays to allow freight trains through, they found themselves still on their feet after a 14-hour day. Not a sign of unhappiness or any negative attitude.

The demeanour of the crew under trying circumstances left no room for moaning from the passengers and so we endured together. Well, I endured with a few scotches which seemed to make the whole endeavour worthwhile.

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November 2023

MANAGEMENT

If COVID has achieved one positive, it appears to be the death of the open smorgasbord cruise dining room. Food on this trip was prepared behind counters and served by staff on an individual basis. Much more

© Adobe Stock

with US Customs. If the service providers, we had encountered to date engaged in positive and welcoming attitudes the US Customs people managed to display the opposite. Our travel companions assured us that this is a consistent trait and under no circumstances should we smile or demonstrate any positive human qualities. Advice heeded we eventually got to our cabin and wow; I think I might like big ships! The crew is largely Filipino, and they understand service. Sure, they have one eye on tips but at least they are prepared to make an effort to earn the reward. Certainly beats having a grocery store attendant who doesn’t give you the time of day add an 18 percent tip to a bar of chocolate.

Travel tip, (no pun intended) most EFTPOS terminals have a button marked ‘other’ that you can use to reduce the tip or cancel it. I don’t tip people who don’t say hello.

civilised than the melee I’ve heard about in pre-COVID times.

place where much fun can be had, it’s just not that authentic.

We disembarked at a few ports in Alaska where it became clear we weren’t the only game around. These tiny towns were simply overrun by cruise liners, sometimes four at a time. The impact has been to turn what would have been authentic frontier settlements into tourist traps replete with jewellery stores, souvenir outlets and tour spruikers. Think Surfers Paradise with glaciers and killer whales, not too big a stretch I suspect. Don’t get me wrong, like Surfers, it’s still an amazing

We did go on a bear spotting tour into the wild and that is most definitely authentic. The pre-tour briefing is a sobering experience wherein the risks of a too close bear encounter are made clear for all participants.

I asked the guide how best to guard against an unpleasant bear experience. Apparently, the trick is to have a bell which will alert the bear to your approach and some pepper spray should the bell fail. “How best to know if a bear is near”, I asked. “Well, you will know if a grizzly is around

by their droppings, which are generally neatly piled”. “And how best to identify said droppings?”

“Well, those will be the ones full of bells and pepper”, our guide helpfully advised.

We saw plenty of bears, some up very close, and met a wonderful group of fellow travellers. I must be getting old because I think this group travel, being taken care of gig, might be for me.

Hmmm. Just saw an inbox alert about a one way fully guided trip to Kazakhstan… wonder what that’s about?

PROGRAMME

The Management Rights Lawyers

y Buying and selling y Legal due diligence y Agreements and variations y Options and top-ups y Dispute resolution

ACCOUNTANTS & AUDITORS

Archer Gowland Redshaw

BODY CORPORATE MANAGERS

Capitol Body Corporate Administration

BUILDING MAINTENANCE SERVICES

Getting High On Maintenance

FINANCE

Mike Phipps Finance

MANAGEMENT RIGHTS AGENTS

Queensland Tourism & Hospitality Brokers

SOLICITORS

Mahoneys

All Preferred Suppliers have been recommended by other accommodation properties for their service and have qualified for inclusion in the programme. The next time you need to use a new supplier, why not make life easier and use a Preferred Supplier.

ARAMA

ARAMA2021 TOPAWARDS

Service Provider

SERVICE PROVIDER OF THE YEAR

OF THE YEAR WINNER

2019, 2020 & 2021

Brisbane L 18, 167 Eagle Street Brisbane Qld 4000 07 3007 3777

Gold Coast L 2, 235 Varsity Parade Varsity Lakes Qld 4230 07 5562 2959

To find a Preferred Supplier see the directory in the back of this issue

www.mahoneys.com.au

MANAGEMENT

November 2023

27

The impact of Non-Refundable Bookings on your revenue strategy:

Are they becoming obsolete?

By Sam Steel, Co-Founder, Resly

Non-refundable bookings have long been a dependable revenue source for numerous properties, offering a lifeline in terms of revenue stability. These bookings deter uncertain and unreliable travellers who might otherwise cancel or become noshows, securing a more stable income for hotels.

While providing the flexibility to cancel without penalties can be an enticing guest offering, it comes with its own set of costs for properties, namely, unpredictability and unoccupied rooms, especially in situations where occupancy rates could potentially reach 100 percent.

Nevertheless, the hospitality industry is witnessing a shift, with more travellers expressing reluctance towards extra fees for flexibility. This shift is causing hotels to trend for less desirable reasons, making it imperative for property managers to reevaluate their options.

Why opt for nonrefundable rates?

Both guests and hoteliers have become accustomed to the

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November 2023

trade-off between flexibility and cost. Non-refundable rates come with distinct advantages that property managers cannot afford to overlook. A closer examination of the main advantages can aid in determining whether non-refundable rates are the right fit for your property.

always been their inflexibility, and this aspect is now being questioned by travellers. While hotels enjoyed the upper hand for years, the balance is shifting.

Modern travellers prioritise flexibility and may choose to stay elsewhere if they cannot find flexible booking options.

Enhanced cash flow

Pushback against fees

Non-refundable bookings ensure a steady cash flow, reducing the unpredictability associated with fluctuating demand.

As travellers increasingly reject fees across the board, nonrefundable fees have come under scrutiny. Many companies have imposed additional fees without providing clear value or explanations, leading to a backlash from customers and even government intervention.

Last-minute cancellations can significantly impact a hotel’s nightly occupancy, particularly in leisure-oriented markets. Nonrefundable bookings help offset these losses and facilitate more predictable revenue planning.

Reduced vulnerability to price reductions The likelihood of price cannibalisation diminishes with a higher volume of non-refundable bookings.

This is not due to guests becoming disgruntled with price drops but rather because it becomes less likely for them to discover these reductions.

Once a booking is nonrefundable, guests are less inclined to monitor price changes, as they have already committed to their reservation.

The demise of cancellation fees Nonetheless, the popularity of non-refundable bookings may be on the wane, mainly due to the challenges posed during the pandemic. Adapting to these changes is essential for hotels to thrive in this evolving landscape.

A shift toward flexibility The primary drawback of non-refundable bookings has

Sticker shock A surge in non-refundable booking fees can lead to sticker shock for potential customers.

Unexpected events can disrupt travel plans, and loyal customers may be dissuaded from booking if they face fees for missed stays, even in emergencies.

Relevance during low seasons During off-peak periods, the impact of cancelled bookings is less significant, as spare rooms are typically available. This means that cancelled bookings do not result in turning away potential guests who would have otherwise been accommodated.

Are non-refundable bookings suitable for your hotel?

While non-refundable bookings offer clear benefits, they also come with drawbacks. Deciding whether to adopt non-refundable fees or adjust your current policy necessitates careful consideration of your hotel’s offerings and target clientele.

It’s not a matter of simply eliminating flexible cancellation

MANAGEMENT

policies. If non-refundable bookings include prepayment, it may deter clients who prefer not to pay in advance but may have accepted a higher rate.

An innovative solution I have seen in the realm of ticket sales, online ticket marketplace Ticketek has introduced a unique solution to address the concerns of both customers and event managers. Ticketek offers a refundable upgrade option, allowing customers to pay a small fee for the opportunity to receive a full refund in case they are unable to attend their event.

This approach not only provides flexibility for customers but also ensures that event managers do not face financial risks. Event managers receive payment for the ticket whether the customer cancels or not, offering a win-win situation for all parties involved.

This creative solution exemplifies how flexibility and revenue security can coexist. We are seeing this also being provided in the accommodation sector.

I recommend having a conversation with your marketing company to see what will work best for your property. Providing multiple options to guests is the best approach for most, charging more for flexibility and reducing prices for non-refundable bookings. This gives guests greater flexibility while providing your hotel with additional tools for revenue management.

Sam Steel is a dynamic entrepreneur and the cofounder of Resly. His passion for management rights and commitment to innovation are reshaping the way we approach online travel and property management. Sam’s extensive background with global online travel agents brings a unique perspective to the industry and provides valuable insights into the ever-evolving world of travel and technology.

BUIILDING RELATIONSHIPS

Storytime with Kelley We got to work and managed to reclaim eight investors for them.

It’s important to note that the managers were actively involved in the process and had already done a lot of groundwork, so this was 100 percent a joint effort. Now, let’s get to the moral of the story: the agent.

By Kelley Rigby, Managing Director, Lett s Rebuild

Let’s start things a little differently this month.

I want to share a story with you, one that I recently discussed at an industry event. This story prompts numerous conversations, so I decided to share it with Resort News readers.

I hope you enjoy it.

Last year, I received a phone call from a lovely couple who had just entered the management rights industry six months earlier. They were distressed and extremely upset because an agent had recently bought a property in their complex and successfully convinced six of their investors to switch to their agency.

They already had 11 outside investors, so the total now stood at 17. At this point, they were considering selling and leaving the management rights business, thinking, “if one person has taken six in six months, how many more could go?”

The power of approaching situations with an open mind and heart

Initially, the managers had vowed never to communicate with that agent, using stronger language that I cannot share here. They were angry.

I asked them to please take a different approach and see if it worked. If not, they could go back to being angry at this woman, and life would go on. I asked some questions: “Where was she from?” And “Did she have kids?” It turns out the agent was a single mom with a little girl attending the same school as the managers’ kids.

I suggested that the wife arm herself with a nice bottle of wine, knock on the agent’s door, and engage in a friendly conversation. The wife, albeit reluctantly, followed my advice.

The next day, the feedback phone call was quite amusing, as I believe they may have opened more than one bottle of wine. Someone’s head was a little worse for wear! I was keen to hear how it went.

Since then, this agent and the managers have been working harmoniously. I dare say they are now friends and often socialise over a glass of wine. These managers have recently settled on their third add-on complex, and they have become huge advocates for our industry.

The moral of the story is not that wine fixes everything (although it can certainly help foster communication). Rather, it’s about the power of approaching

situations with an open mind and heart. As an industry, and as managers, we need to educate the public about our unique business model. It’s clear that not many people truly understand the intricacies of what we offer.

Take this opportunity to engage in a face-to-face conversation with that person, as everyone possesses a heart within.

Approach them with empathy and goodwill, remembering that you have nothing to lose.

SMALL MYERS HUGHES LAW • BUSINESS • RELATIONSHIPS

Management Rights Specialists

It turns out the agent didn’t even realise the complexities of the management rights industry. She didn’t understand that the managers had bought the letting business and just thought it was a side gig where they acted as caretakers.

QLD-NSW-VIC-WA BUYERS - SELLERS - DEVELOPERS Our team of legal experts, led by Col Myers, has over 30 years’ experience in this area and will get you the best possible outcome.

Tel: +61 (0)7 5552 6666 M: +61 (0)417 620 516 E: cmyers@smh.net.au W: www.smh.net.au

Accountants to the accommodation industry.

Call 07 5430 7600 or visit holmans.com.au

MANAGEMENT

November 2023

29

TOURISM NEWS

Paris bed bug outbreak sparks panic

Paris, the city of love and fashion, has been making unfortunate headlines due to a severe bed bug outbreak.

This outbreak has caused panic among residents, operators and tourists alike.

In late September, alarming viral videos circulated online, revealing bed bug infestations in hotels, movie theatres, trains, and homes throughout Paris.

The deputy mayor of Paris even expressed concern, stating that “no one is safe,” and urgent measures must be taken to combat this “scourge” of bed bugs, especially with the upcoming 2024 Olympics.

The timing couldn’t have been worse, as Paris was experiencing an influx of visitors during Fashion Week. However, Paris is not alone, in fact bed bugs have been making a global comeback over the last two decades.

Australian bed bug expert Stephen Doggett concurs,

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November 2023

citing a worldwide increase in bed bug numbers. Dr Doggett, a Senior Hospital Scientist at Westmead Hospital in Sydney said bed bug numbers are on the rise once again, after a period of decline during the COVID pandemic when human travel was restricted.

The recent outbreak in Paris could be attributed to several factors, the warm weather likely playing a significant role. Bed bugs thrive in warm and humid conditions. With a hot summer approaching and international travellers returning, it is essential for accommodation providers to revisit their bed bug prevention policies to avoid unwelcome infestations.

Dr Doggett recommends regular inspections of all beds and bedrooms and ensure all staff can identify bed bugs. Additionally, maintain an up-to-date bed bug management policy in line with current best practices – refer to ‘A Code of Practice for the Control of Bed Bug Infestations in Australia’.

Promising outlook for tourism industry

Stacey McBride, Matthew Burke,Taylor O’Brien, Stephen Wu and Michael Johnson. Image Supplied.

In a recent Hotel Market Update event hosted

by Accommodation Australia NSW, a panel of tourism industry experts delivered an optimistic outlook for the future.

Domestic tourism has nearly returned to pre-pandemic levels, and international visitor arrivals are steadily increasing each month. This positive news was shared with 85 hotel general managers and senior personnel from Sydney and Greater Sydney who gathered at the Sydney Harbour Marriott Hotel, Circular Quay for the breakfast event.

Guest speakers included Matthew Burke, Regional Director Pacific, Japan, and Central South Asia at STR, Stephen Wu, Economist at Commonwealth Bank of Australia, and Taylor O’Brien, Associate Investment Sales at JLL Hotels and Hospitality Group.

Accommodation Australia NSW Manager Stacey McBride

TOURISM

emphasised the importance of such events, allowing members to gain insights from industry experts on various issues.

Taylor O’Brien from JLL Hotels and Hospitality Group confirmed a strong recovery in visitation over the short-tomedium term, with Sydney and Melbourne markets expected to be the major beneficiaries.

Matthew Burke of STR provided further encouragement, reporting that forward occupancy is consistently outpacing last year, with Sydney poised to be the strongest performer in the region.

Despite a significant reduction in discretionary spending, economist Stephen Wu highlighted a robust demand for travel post-COVID, indicating that people are eager to explore once again.

Ms McBride noted that while cost of living concerns may lead to prioritisation in spending, travel remains a top priority for many, which is positive for the industry.

Navigating turbulence:

How global conflicts impact your dream cruise Image courtesy of Interline Travel

Recent geopolitical conflicts have cast a shadow over the cruise industry

By Stephen West, Interline Travel

Embarking on a dream cruise has always been an exciting prospect, but recent geopolitical conflicts have cast a shadow over the cruise industry, particularly in Europe.

So, what is the real story and how might it affect your travel plans?

Immediate repercussions: Cruise lines chart new courses In the wake of the conflict, cruise lines swiftly altered their routes, diverting away from Israeli ports and reshuffling itineraries.

Airlines, too, grounded their flights to Tel Aviv, creating a ripple effect across the industry.

Preparing for uncertainty: Cruise lines set sail for alternative havens As the future remains uncertain, cruise lines are no strangers

to adapting. Drawing from past experiences, such as the rerouting of cruises around St Petersburg, contingency plans are already in motion. Talks of rescheduling cruises well into 2024, with an emphasis on Greek, Italian, and Turkish ports, are underway to ensure a seamless and enjoyable travel experience.

Booking dilemmas: A shift in cruise preferences The current scenario has prompted prospective cruisers to reconsider their choices for 2024. With Middle Eastern ports now in question, travellers are exploring alternative destinations, causing a surge in demand for Mediterranean, Northern European, and UK regional cruises. Many soughtafter cruises are nearing full capacity, leaving eager clients scrambling for available spots.

Fuelling the uncertainty: The potential for cruise price adjustments Adding to the complexity, rising oil prices may prompt cruise lines to impose fuel levies, a tactic employed in the past. This financial consideration adds an additional layer of uncertainty for travellers, urging them to

weigh the pros and cons of booking sooner rather than later.

Sound advice from a travel enthusiast Reflecting on the current situation, it’s evident that the time to book is now. While the temptation to wait for better prices lingers, the guarantee of today’s fare is worth seizing.

This is especially crucial for high-demand seasons in Europe (May to October) and Alaska (May to September), where prices tend to ascend as the departure dates approach.

Expert insight: Navigating the 2024 cruise landscape Looking ahead to 2024, industry experts advise seizing favourable deals when they arise. With potential scarcity in availability and escalating prices, the mantra is clear: if you find the cruise that suits your desires and budget, grab it. Early bookings for Alaska’s prime season are strongly recommended, as repositioning cruises are filling up rapidly.

Seeking value: A shift in the 5-Star market While the 5-Star market, featuring esteemed cruise

TOURISM

lines like Celebrity, Silversea, Regent, Seabourn, and Windstar, may witness challenges in filling cabins with higher ticket prices, this presents a unique opportunity for savvy travellers.

The ‘best value’ may lie in these luxury experiences, where the upfront cost might be higher, but the overall expenses could prove more economical.

Current actions All cruise lines have cancelled all stops in Israel and at this stage are redeploying the 2024 itineraries to more destinations in the Mediterranean. What will impact travel more, would be a closure of the Suez Canal where ships would not be able to reposition back to Europe for the 2024 season – but this is only an observation. There will be schedule changes that affect many but as with airlines, safety is their number one priority.

Amid global uncertainties, your dream cruise awaits.

The key is to navigate wisely, seize opportunities, and embark on a journey that transcends the challenges of the present moment.

Work with a travel agent who is abreast of changes.

Bon voyage!

November 2023

31

EVENTS

The Best of Tourism Awards Annual Gala 2023:

A vibrant night of celebration Manager of the Year Award: Melissa Pearson, Stayco Female Leader Award: Mandy Clarke, Resort News & Accom News Industry Ally Award: Kelley Rigby, Letts Group Community Spirit Award: Elaine Leahy, Zinc Properties Noosa As well as providing an event for the industry to celebrate and let its hair down, from ticket sales the Spring Carnival Annual Gala raised over $10,000 for two very deserving local charities.

The Star Gold Coast came alive with the spirit of caipirinhas, a riot of colours, and delightful dance moves at the annual The Best of Tourism Awards Annual Gala 2023!

For the second consecutive year, Resly and Women In combined their efforts to organise and present one of the industry’s most eagerly awaited events. Kudos to Sam Steel, Marisa Milane, and the entire Resly team for orchestrating a flawlessly executed and incredibly enjoyable evening.

The Resort News team was also present to let loose and enjoy the extravagance, elegance, and

excitement provided generously on the night. It was undeniably the perfect occasion to celebrate our remarkable industry and the outstanding individuals within it.

The competition for awards was fierce, with so many inspirational and dedicated nominees.

However, when the winners were announced, they truly shone on the stage.

The winners were: One to Watch Award: Hamish Watts, Glen Eden Beach Resort Innovation Award: Switch Hotel Solutions Business of the Year Award: ULTIQA Hotels & Resorts

Tara Brown Foundation Tara Brown, was a young mother who died on September 9, 2015 at the hands of her partner during a horrific act of domestic violence. It was the circumstances surrounding her death that forged the idea for this foundation in the hope that her loss might serve to prevent similar tragedies to others.

The Tara Brown Foundation is committed to raising the funds necessary to help keep qualified facilities up-andrunning to protect those faced with the consequences of Domestic Violence.

With your help the Tara Brown Foundation can distribute muchneeded funds to facilities in need and help create more shelters.

RBWH Every day, patients are admitted to the RBWH Intensive Care Unit (ICU) from around Australia and the world - where they fight for their life. Thankfully, they receive world-class care which gives them every chance of surviving.

While many ICU patients are oblivious to the plight they face due to catastrophic injuries or illness, families and loved ones of patients are very much aware of the potential future they could be facing.

The stress, anxiety, and heartbreak that families and loved one’s experience as they wait to hear news can be overwhelming and sometimes too much to bear.

During this intensely stressful period, all families and loved ones of ICU patients need support including information, counselling, and practical assistance. The RBWH WeCU program will provide this support to local patients. It will also provide much needed assistance to families and critically ill patients who have been airlifted from across Australia and the world.

Please give generously to these charities on the QR Code in the banner below.

Donate to our Gala beneficiaries

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November 2023

EVENTS & APPOINTMENTS

EVENTS & APPOINTMENTS

November 2023

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November 2023

EVENTS & APPOINTMENTS

2023 ARAMA INDUSTRY EVENTS CALENDAR For registration and/or event information please contact us on 1300 ARAMA Q (1300 27 26 27), email national@arama.com.au or visit: https://www.arama.com.au/

BRANCH ALL Cairns Port Douglas ALL Gold Coast Sunshine Coast ALL Brisbane

EVENT TITLE ARAMA Relationship Revival Masterclass (ARRM) Drop in For Drinks Bullying and Harassment in Strata MRITP - Brisbane Christmas Night Social Event Christmas Night Social Event Webinar - Roadshow Wrap Up Christmas Night Social Event

DATE 3/11/2023 27/11/2023 28/11/2023 1/12/2023 5/12/2023 6/12/2023 6/12/2023 7/12/2023

TIME 8:30am-12:30pm 6pm - 7pm 6pm - 9pm 8:30am-4pm 6pm - LATE 6pm - LATE 11am 6pm - LATE

EVENTS & APPOINTMENTS

LOCATION Riverside Hotel, Brisbane Oaks Roof Top Oaks Port Douglas Riverside Hotel, Brisbane Clock Hotel Kawana Bowls Club ONLINE The Boo

November 2023

35

AccomCon. 2023:

A remarkable gathering of industry professionals On Friday, October 13, AccomCon. 2023, the premier accommodation conference, made its grand debut on the Gold Coast, following the resounding success of a trial event in Cairns.

Hosted at The Star Gold Coast, the conference drew attendees from various segments of the management rights and short-stay accommodation sectors, all eager to engage in a day brimming with enriching content.

The event commenced with a captivating presentation

by Simon Kuestenmacher, a globally recognised expert in demographics, who provided insightful post-COVID perspectives on Australia, substantiated by data and evidence. His engaging insights left the audience spellbound.

Bart Sobies, a leading figure in hospitality technology and

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November 2023

marketing, and the Founder of ibooked.online and The Accommodation Show, held a substantial audience captive with his session on artificial intelligence (AI).

AccomCon. 2023 featured a diverse array of expert panels covering topics ranging from short-stay accommodations, hotel operations, travel trends, revenue management, marketing, real estate, to investment and accounting.

The conference, true to its promise, successfully facilitated connections, imparted valuable knowledge, and inspired all in attendance. Sam Steel, CoFounder and Director of Resly and AccomCon., expressed his gratitude for the overwhelming support of the event’s sponsors, including Resly, Resort News, Switch Hotel Solutions, Booking.com, Protect Group, and RoomPriceGenie. He also hinted at plans for AccomCon. 2024, building on the resounding success of this year’s event.

EVENTS & APPOINTMENTS

SSKB networking & information event:

Building connections and sharing insights

A gathering of building and onsite managers, management rights professionals, and the Resort News team came together for an informal networking and information event, graciously hosted by SSKB on October 12 at the Normanby Hotel in Brisbane. This delightful evening fostered intriguing conversations and the forging of valuable relationships.

The event featured a panel of distinguished experts, including Kelley Rigby, Founder and Director of Letts Group, Todd Garsden, Partner at Mahoneys, and Jess Beckett, Head of Strata and Brisbane General Manager at SSKB. The panellists delivered exceptional insights and offered practical and informative advice for attendees to apply both in the present and future.

Christmas Golf Event Excitement is building

for the 2023 PRET Australia Awards Night

Accommodation Industry Golf Club’s massive Christmas golf day is on Friday November 24 at Lakelands Golf Course for a 12.30 pm shotgun start. Because this day is the last on the 2023 calendar the committee goes to lengths to make this day “Simply the Best”.

If you have played this day before you know that leg hams are given away by a random draw. There will also be a huge rundown of prizes, a big raffle, lunch, and drink vouchers on the course plus after golf dinner.

There will be hole sponsors and fun events plus we hope to have a celebrity on course or as a guest speaker. This day is based on fun with competition being a two-person Ambrose event.

The day is made possible by generous sponsors who subsidise the costs allowing for all the extras every player will enjoy. It is fantastic value for only $150 p/p.

Celebrating Real Estate Professionals successes and proudly supporting the Lord Mayor’s Charitable Trust, Mater Foundation, RBWH Foundation and FareShare.

A full field is the aim, so get busy, diarise the day, let all your mates know and remember ladies are welcome!

For full details and to register contact Tracey Taylor taylor77@bigpond.net.au As always. thanks to Major Sponsors: Watt Utilities, Mahoneys, KONE, Platinum Electrical & Air, McAdam Siemon Business Advisors, Rochele Painting, Nator Constructions, RBC Group, ResortBrokers.

And supporting sponsors: The House of Golf, ARAMA, REI Cloud, Resort News & Letts Group.

Awards will be presented to the Real Estate Sales, Property Management and Management Rights Industry to recognise outstanding achievers. There will also be live auctions, silent auctions, and raffle ticket sales to raise much needed funds for worthy charities.

Where: Royal International Convention Centre

There are three classes of tickets for sale starting from Economy, Premium Economy and Business Class. Premium tickets include donations to selected charities. Ticket sales are open, please show your enthusiastic support for this event.

Theme & Dress Code: Travelling Around the World - Business Travel Attire or Cultural Dress.

https://events.humanitix. com/2023-pret-australiaawards-night.

When: Saturday November 25, 2023, 5pm-6pm VIP Predinner Networking Party & 6pm-10pm Awards Night

EVENTS & APPOINTMENTS

November 2023

37

Sales Report

The Management Rights Lawyers

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

y Buying and selling

MANAGEMENT RIGHTS

y Legal due diligence Gold Coast

y Agreements and variations

Villa Adori

y Options and top-ups

SERVICE PROVIDER OF THE YEAR

OF THE YEAR WINNER

2019, 2020 & 2021

Brisbane L 18, 167 Eagle Street Brisbane Qld 4000 07 3007 3777

MRS

Gresham Gardens

David Li

Tarragindi

RB

Gasworks Residences

Aaron Zheng & Joanna Jia

Newstead

RB

Sunshine Coast / Wide Bay / Fraser Coast

ARAMA

ARAMA2021 TOPAWARDS

Surfers Paradise

Brisbane

y Dispute resolution Service Provider

John Maley

Gold Coast L 2, 235 Varsity Parade Varsity Lakes Qld 4230 07 5562 2959

Glen Eden Resort

Watts

Peregian Beach

CRE

Villa Mar Colina

Maclean

Yeppoon

CRE

Key Largo

Jason Dowd

Alexandra Headland RMS

Shelly Bay Resort

Dean Brown & Kwanruan Huadchai

Hervey Bay

RMS

Pacific on Coolum

Melinda Harvey

Coolum

RMS

Verandahs Apartments

Dreamtime Resorts

Port Douglas

RB

Meridian Port Douglas

Dreamtime Resorts

Port Douglas

RB

Tropical Reef Apartments

Dreamtime Resorts

Port Douglas

RB

CRE

Far North Queensland

www.mahoneys.com.au

MOTELS & OTHER

 Structuring  Income Verification  Accounting/Taxation  Superannuation  Audit

Queensland

Are you looking for a pre-purchase financial verification report, profit and loss for sale or just an accountant who really understands your management rights business?

We provide a comprehensive range of compliance and consulting services for all entity types operating within the industry.

Jonathan Grant Accountants operates within a wide referral network of other professional industry specialists and we are dedicated to ensuring you receive the right advice from the right people.

PO Box 391 WEST BURLEIGH QLD 4219 Phone: (07) 5534 4333 | Fax: (07) 5534 2081 reception@jonathangrant.com.au | www.jonathangrant.com.au

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November 2023

Wagon Wheel Motel

Davis

Cloncurry

Hatton Vale Motel

Brar

HattonVale

CRE

Cloncurry Motel

Davis

Cloncurry

CRE

Dalby Mid Town Motor Inn

Zhen

Dalby

CRE

Trinity Islands Holiday Prk

Nora & Dan Gleeson

Burrum River

RB

Cara Motel

Helen Hei

Maryborough

RB

Collinsville Motel

John Wang

Collinsville

RB

Ambassador on Ruthven

Greg Bateman

Toowoomba

RB

Beachmere Palms Motel

Tim McKew

Beachmere

RB

Korte’s Resort

Regional Accommodation Group P/L

Rockhampton

TB

Ammonite Inn Motel

RS Motels P/L

Richmond

TB

Flying Spur Motel

Kiegan Jach P/L

Toowoomba

TB

Double D Caravan Park

Johnston

Peak Hill

CRE

Tuncurry Motor Lodge

Wei

Tuncurry

CRE

Costa Rica Motel

Gebhardt

South West Rocks

CRE

Cootamundra Gardens Motel

Shami Sing

Cootamundra

RB

Golden Grain Motor Inn

Jaspreet Singh

Tamworth

RB

The Yass Motel

Sarabjit( Monte) Bains

Yass

RB

Ocean Breeze Motel

Lauren Steels

Port Macquarie

RB

Quest Singleton

Garfield Song

Singleton

RB

Wanderers Retreat

A. Carter & I. Vara

One Mile Beach

TB

New South Wales

Note: Agent/Broker involved in the sale is listed last.

Agent - KEY: RMS - Resort Management Sales; CBMR - Calvin Bailey Management Rights; CRE - CRE Brokers; MRS - MR Sales; QTHB - Queensland Tourism & Hospitality Brokers; RB - ResortBrokers; RS - Resort Sales; TO - Tom Offermann; TB - Tourism Brokers; TMR - Think Management Rights; SC - Stratacorp; WCH - Ward Commercial Hotels. * In conjunction

PROPERTY

MR

Sales

Working together, working for you.

This Months Featured Listing...

Kingscliff NSW

ID: 8036

Exclusive: Holiday Complex in Paradise •

Beachside location only 15 minutes from Coolangatta International Airport

•

34/50 apartments in the letting pool - some have ocean views

•

2 bedroom manager’s residence with attached office and reception on title

•

Adjoining commercial lot on title approximately 100m2

•

Salary approximately $125,000. No set hours in the agreements

Net Profit: $700,000 | Price: $4,750,000 Contact Tony Johnson 0433 335 679 tonyjohnson@mrsales.com.au www.mrsales.com.au | 1300 928 556 | info@mrsales.com.au

South Brisbane, QLD

ID16114

MANAGEMENT RIGHTS – PERMANENT

Dicky Beach, QLD

ID16081

MANAGEMENT RIGHTS – PERMANENT

SOLID INCOME, PERMANENT GEM IN SOUTH BRISBANE

EXCLUSIVE: ULTIMATE LOW MAINTENANCE LIVING

Asking Price: $ 1,999,720

Asking Price: $ 930,000

Nett Profit: $ 203,421

Contact: David Jiang, 0481 500 278 davidjiang@nextrealty.com.au

Nett Profit: $ 93,380

Contact: Mark McKay, 0428 865 120 markmckay@mrsales.com.au

Torquay, QLD

ID15771

Burleigh Heads, QLD

ID15532

MANAGEMENT RIGHTS – HOLIDAY

MANAGEMENT RIGHTS – HOLIDAY

SUPERB MANAGEMENT RIGHTS IN CENTRAL HERVEY BAY

OUTSTANDING - BURLEIGH HEADS BEACHFRONT RESORT

Asking Price: $ 1,447,000 + 5K SAV

Offers Over: $ 2,995,000

Contact: Ronnie Slebos, 0414 964 333 ronnie@crebrokers.com

Nett Profit: $ 280,000

Contact: Scott Saunders, 0432 144 822 scott@premiersales.com.au

www.accomproperties.com.au

Nett Profit: $ 414,336

OVER 1,100

LISTINGS FROM ALL THE LEADING BROKERS IN AUSTRALIA, NEW ZEALAND AND THE PACIFIC ISLANDS Tugan, QLD

ID16041

OVER 15,000 BUYERS VISIT

ACCOMPROPERTIES

MANAGEMENT RIGHTS – PERMANENT

TUGUN BEACH FRONT - LIVE OFF SITE Asking Price: $ 1,770,000

Nett Profit: $ 200,596

ON A MONTHLY BASIS

ADVERTISING

LISTING OPTIONS

Contact: Kerrie Lush, 0416 084 693 kerrie@raas.com.au

Noosaville, QLD

ID16193

SINGLE CASUAL LISTING $375 EX. GST

(Displayed until sold)

10x MORE ENGAGEMENT

MANAGEMENT RIGHTS – HOLIDAY

BOUTIQUE STYLE RESORT ON THE NOOSA RIVER OFFERING FLEXIBILITY Asking Price: $ 1,714,000 Contact: Chenoa Daniel, 0403 143 151 chenoa@resortbrokers.com.au

Nett Profit: $ 206,069

HOMEPAGE FEATURED LISTING $750

EX. GST (Displayed until sold)

For further information on advertising opportunities please contact: Stewart Shimmin on 07 5440 5322 or email s.shimmin@accomproperties.com.au

Bruce and Jill ride wave of success at Surfers Hawaiian

Bruce and Jill Christie

By Grantlee Kieza, Industry Reporter

Bruce and Jill Christie took out the Resident Manager of The Year (Mixed) honours at this year’s prestigious ARAMA TOP Awards.

It was a fitting tribute to the work they have poured into the Surfers Hawaiian Holiday Apartments at Surfers Paradise, which they have run since 2015.

They’ve been at the lovely high-rise apartment complex for eight and a half enjoyable years and have much experience

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November 2023

and insight to share about the Management and Letting Rights (MLR) Industry.

from Taiwan where I was (for 12 years) involved in teaching among other jobs.

They have been rewarded with four top-ups during their tenure at Surfers Hawaiian, with nearly 100 percent support in the voting among owners. It’s a reflection of their success at the complex.

“When we came back to Australia my mother was ageing and my daughter was coming up to school age and I thought it would be best to go through the school system here.

“We were complete novices back in 2015 when we came here but I felt that with my background in the building industry, and with my wife Jill having a background in marketing, we had the right skill set to be able to do it,” Bruce said.

“So, Jill and I made the decision to move over. We had no idea what we were going to do when we got here. I knew a little bit about management rights (I had heard about it many years earlier) and I liked the idea of it, but I thought it was out of my reach at that time. I felt

“We came back to Australia

PROFILE

I didn’t know enough about finance and things like that, so we did a bit of research and we found out more about the industry and here we are.”

There are 64 units in the complex which is situated on half a hectare.

It was built for holidaymakers but over the years reverted to a majority of owner-occupiers.

Jill said: “We’ve rebuilt the letting pool to double what it was when we arrived. Most of the units here are owner-occupiers but we have six holiday apartments and 10 permanents in our letting pool.

Bruce added: “The building is in a great position beside the Nerang River and all the units are big (120 to 130 square metres) with high ceilings.

“We were running holiday letting as well, so it was in our interests to make the property as attractive as possible. At the same time, the owner occupiers appreciated everything that we were doing.”

“It was an American design and very well built for its day. It was the first cyclone-proof building on the Gold Coast. It’s got a marina and ramp so anyone can pull up here. There’s a park right next door and the light rail stop is just on the other side of the park. We have a lot to offer.

Jill said it was crucial to build up trust with the owners after they had been through many managers.

“They had lost confidence in resident managers,” Jill said.

“Every day Bruce and I were listening to complaints and trying to make the best of it.

“We are also right on the border of Surfers Paradise and Broadbeach, giving us easy access to a lot of great restaurants and everything the popular tourist location offers.”

The first thing the couple did when they arrived at the Surfers Hawaiian was to improve the general upkeep of the building, raising the appearance of a complex that had become “a bit rundown”.

“The gardens were overgrown,” Bruce said. “There was golden cane everywhere and the palm trees had been neglected.

The grass was full of bindis.

“The general average for managers at the property had only been one and a half to two years. One guy lasted six years but he had come across some hard times because he bought

in November 2007 and walked straight into the global meltdown in 2008, and then Brisbane’s 40-year flood in 2009 followed by another one in 2011. Then there was the light-rail project which closed the park next door and they had excavators jackhammering all the concrete.

“He had a real bad trot and just hung on, hoping things would get better.”

Bruce said when the couple arrived at Surfers Hawaiian

there were 30 metres of paving edging separating the gardens from the lawn but the grass and palm trees had become so overgrown it was obscured.

“The first thing I did was get the mattock and shovel out and cleared the rubbish away,” Bruce said.

“The paving edging looked great, so we just continued in that vein doing things to improve the appearance of the place.

“We’re good listeners, so we listened to all their complaints and then worked with them. We began renovating the grounds and worked on the gardens to get rid of all the golden cane.

We organised working days and the owners came along, they jumped on the bandwagon.

“When we started here the committee was quite hostile and it took us a long time to turn the relationship around.

They’d had bad experiences with previous managers and there was a lot of hostility towards management rights in general, without even knowing us.

“Regardless, we put our nose to the grindstone and started turning that attitude around.”

Congratulations Jill and Bruce. Flood Legal are proud to partner with you as your trusted legal advisors. Thank you for your kind words.

Leaders and experts in Management Rights

Buying and Selling

‘Sharon’s very professional and enthusiastic, listening and understanding clients’ concerns. Flood legal is a very great team, reasonable price as well and we highly recommended. ’ – Bruce & Jill Christie Surfers Hawaiian Holiday Apartments

Agreements or Variations

General Advice

All at Fixed Fees

Contact Sharon Flood, Director | M 0459 070 871 | T 02 6674 5118 | E sharon.flood@floodlegal.com.au | W www.floodlegal.com.au

PROFILE

November 2023

43

The couple introduced lift notices to inform owners about what was going on around the property.

“I’m on the committee,” Bruce said, “so I let everyone know about things that the body corporate had planned. I felt all the owners became more a part of the community because of that rather than being on the outer and not being informed.

“They really took a liking to that. We organised a lot of little parties down on the lower deck so people could come and have a drink and a chat. That way we could all start to get to know each other and have more understanding in the building.

“The body corporate took that on board and continued to organise small get-togethers on the first Friday of every month. It’s now part of the community activities here.”

Jill said the body corporate realised the get-togethers were a good way to talk to owners.

It was the atmosphere Jill and Bruce had wanted to create.

“In the first year that we moved in, the sinking fund was $300,000. Now with everything done after eight and half years the sinking fund is $850,000,” Jill said.

“In that time, we’ve seen the lifts refurbished, the

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November 2023

PROFILE

building has been painted and any sign of concrete cancer has been removed.

“The building’s paintwork is only two years old and we’ve just done up the riverside deck, which it’s been repainted too.”

Bruce has been involved with all the tradesmen working on the property.

“I get involved with them and help if they need assistance,” he said. “I make sure they have everything they need to do the jobs.

“It saves a lot of money in the long run. If you sit in the office and just hand over the keys to the tradesmen, they sometimes wander around for hours.

“So, I keep a close eye on them and work with them - a gratis of any payment. I do it to keep the cost down for the owners. And that’s why we’re in such a good financial situation, we’ve got plenty of money in the kitty and the major jobs have been done.”

Jill and Bruce also organise birthday parties for different residents.

“Many of them are like family,” Jill said. “We get very close to many of the residents, especially the older ones.

“Many of them like to have a chat and that was important during COVID, when a lot of

the residents couldn’t have visitors. A lot of their families couldn’t travel to Queensland to visit, so they relied on us a lot for companionship.

“That’s why we organised birthday parties for the residents. COVID was a tough time for many of them especially the older ones with health problems, they were really missing their families.”

The couple also introduced a defibrillator to the building.

Knowing that Bruce is a former lifesaver and well versed in first aid, many of the residents have his number on speed dial!

“It’s another way of building up real community spirit,” Bruce said.

“They know if something happens, they can dial me at any time. It’s part of the service that Jill and I bring to the building, and they appreciate it.”

“Also leave emotional issues out of your decisions. It’s vital to be professional and to get things done,” she said.

en booked direct sort News readers wh Re r fo nt ou sc Di % 10

“Sometimes people are angry over issues, but you need to realise that everyone can have a bad day. Sometimes people say things that they regret but it’s no use brooding over it.

Keep focused on making the property as good as it can be.”

HOLIDAY APARTMENTS

The couple said they believed the MLR industry has a big future despite recent negative publicity over the threats to cut term.

“I think the sector has a huge future,” Bruce said. “There are big changes to tenancy laws that will allow people with pets into buildings, this will lead to an influx of people moving into high-rise apartments.

Jill said anyone entering the MLR industry must be prepared to put in effort.

“As a nation, we can’t afford to keep spreading out into the hinterland, so the answer is to go up. We can’t continue with the old idea of a quarter-acre block for everyone in suburbia.

It’s just not sustainable.

“Nothing good comes of sitting in the office all day,” she said.

“You must be active and to be seen to be proactive.

“I think more and more people will be living in apartments and what better way to manage them than management rights?”

2890 Gold Coast Highway, Surfers Paradise Qld 4217

BOOK DIRECT: (07) 5539 9875 email: info@surfershawaiian.com.au

WHAT DOES IT COST TO HAVE AN INDUSTRY PROFILE? It doesn't cost anything to have a profile in Resort News apart from a little time when helping to coordinate the profile material.

WHO WRITES THE ARTICLE? The article will be written by one of our qualified journalists.

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PROFILES ARE A FANTASTIC OPPORTUNITY TO: • Impress your unit owners • Receive recognition for your hard work (and that of your staff) • Lift the awareness of your property within the industry • Help build relationships with other managers • Lift the profile of your property for when you are ready to sell

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THE PREFERRED SUPPLIER DIRECTORY THE ORIGINAL AND MOST TRUSTED BUSINESS TO BUSINESS GUIDE FOR THE ACCOMMODATION INDUSTRY

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November 2023

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GLASS INSTALLATION/REPAIRS

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“Always passionate, committed and professional, you can trust the team at Property Bridge.”

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Specialists in management rights Off the plan sales qld & victoria Buying or selling best advice Rod Askew 0411 758 236 (QLD & VIC) Eric Brizuela 0413 060 683 (QLD) Nationwide: 07 3554 0040 Email: sales@rcabb.com.au

www.rcabusinessbrokers.com.au Specialising in Motel & Resort Sales Qld wide Andrew Morgan m 0417 608 041 p 07 4953 1611 | w qthb.com.au

1800 888 518

Think Management Rights Wayne & Linda Stoll 0452 181 505

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YOUR PARTNERS IN SUCCESS

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PAINTERS & DECORATORS

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November 2023

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Buying & Selling

New Agreements or Variations

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Flood Legal offers all the experience & expertise of a big firm while delivering accessible, personal & affordable service that comes with dealing with a small firm.

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TRAINING & DEVELOPMENT

SPECIALISED VALUERS FOR MANAGEMENT & LETTING RIGHTS BUSINESSES AND MOTELS

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