Published: 19 August 2008.

Contributed by Jake Clarke of Management Rights Sales

I have specialised in listing and selling New South Wales management rights for the past seven years. It is so important to have a full understanding of the NSW legislation, the knowledge of owners’ corporation responsibilities, the duties of executive committees and what agreements are commercially sound.

With less than a handful of lawyers who have a sound understanding of the NSW management rights industry, it is important that vendors and purchasers seek their advice.

Just as importantly only a few banks have a full understanding of the NSW legislation.

VENDORS

Very important points to remember:

• Agreements prior to 10 February 2003, you may have the opportunity to top up your caretaking agreement, seek professional assistance before doing so, if the correct procedure is not followed you may forfeit that right.
• Agreements after the 10 February 2003, if contemplating selling you will be required to top up the agreements to 10 years for the incoming purchaser.
• Again the timing is crucial. The ability of the broker to establish a market price in NSW will depend
  upon past sales in certain areas and “apples for apples”.
• Queensland management rights are sold off an accepted multiplier; currently NSW management rights still attract an individual ‘market price’ for each complex, dependent upon agreements,
  location, nett profit and anticipated growth.
• I believe with less than 60 marketable management rights in NSW, it is extremely important that the market value of these properties be protected and nurtured to maintain their correct and increasing value.

BUYERS

The NSW industry advantages:

• NSW management rights offer the opportunity to enter the industry with unique opportunities.
• No stamp duty payable on the management rights component “the goodwill”.
• The opportunity to be an active committee member and, most importantly, the limited chance to join the NSW industry and reap the capital gains of future year’s growth.

Before you decide to buy or sell give Jake Clarke a call.

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