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Avoid Unnecessary Stress When Seeking Committee Consent to the Sale of Management Rights


Getting the consent of a body corporate committee to the sale of a management rights business can be stressful.

Far too often we see petty disputes over issues like “what amounts to reasonable evidence of a buyers financial standing” or “what gardening qualifications are necessary”. The disputes lead to delays, extra costs and unnecessary stress for all parties involved.

Ways for buyers to avoid the stress

If you discount the odd over-zealous committee member or body corporate lawyer—the process of getting committee consent should be straight forward.

Here is our list of the basic rules of thumb we suggest buyers follow.

  • Deal with industry experts: Check your lawyer has the experience you are paying for. Ask them how many management rights transactions they have acted on in the last 12 months. An experienced adviser will make the process easier and less stressful;
  • Sale contract: Understand the process and timeframes required under your sale contract. If you not sure, talk to you lawyer (you are paying them to keep you informed). Not knowing is stressful;
  • Prepare for the committee interview: There are many examples of a typical list of the questions a committee will ask a buyer at an assignment interview (see the ARAMA website or ask your lawyer for examples). It is a good exercise for a buyer to run through a typical list well before the interview. Doing so will often inform a buyer about something they may have overlooked. At the very least, before the interview buyers should:
    • Due diligence: Do a thorough inspection of the complex and its facilities—and the equipment the resident manager has to maintain them;
    • Understand your obligations: Carefully read the caretaking and letting agreements and the list of duties the resident manager is required to perform. Talk to your lawyer about anything that is not clear. Talk to the seller about the expectations of the committee and residents.
    • Upskill where necessary: Consider if you have the requisite skills to operate the business. There are good industry run, short and relatively inexpensive courses for new and existing resident managers (visit the ARAMA and MRAS websites for more information on these). We recommend anyone buying management rights for the first time should attend one. They are informative and attending a course sends the right signals to the committee.

Sellers need to be proactive also

Sellers should also be proactive where they can be. Try to make sure the buyer is doing all of the above. Make sure your lawyer presents the request for approval to the sale to the committee:

  • as soon as is possible after the contract is signed and the financial / due diligence conditions are satisfied; and
  • that it is sent with all of the relevant information about the buyer (discuss this with your lawyer).

Communicate with the committee about any concerns they may have. Often a simple discussion with a committee member will solve the problem.

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“I have worked with Matt and Amity Law for several years. Matt is a pragmatic, client focused lawyer who understands our business and achieves the legal outcomes we need in the timeframes our business requires”


Anthony Doolin
Director, Smithfield Property Group