Home
  Site Map 
About Us
Seminar Dates
Helpful Links
See other FAQs
Ask your Question
Contact Us
The basic questions answered.....
What are Management Rights?
Summary, Personal Considerations, Income Streams, Duties, Brief History, Blue Chip Business, Terminology
What training and licences are
required?
License Requirements, Training Providers, Skills
How do we choose the right
Management Rights?
Lifestyle, Letting Types, Income, Agreements, Valuation, Established Business, Off the Plan, Smart Questions
What do we do first?
Research, Inspect, Accountant, Solicitor, Financier, Training, Licence Application
What happens after we sign a contract?
The process - Contract to settlement
Who is Australian Management
Rights?
Meet the members and their organisations
When is the next Information Seminar?
Dates and locations
Where else can we source information?
Links to AMR members, Sponsors, Government and Industry sites
◄ Back to the Home Page

What happens after we sign a Contract?

The process starts . . . .

1. Accountants will conduct the profit verification

The contract you sign will contain two clauses which set out Body Corporate remuneration and the stated net profit of the business. It is your choice to have the amounts verified by an accountant conducting a "profit verification".

However, where you are borrowing to finance the business it will be a requirement of the bank that the profit verification be conducted by an industry recognised accountant.

It is important that you understand how the net profit is calculated, what is included or excluded in regard to income and expense items. These matters can be discussed at the same time as you discuss the business structure you are going to choose. It would also be appropriate at that time to discuss the other items the profit verification covers.

If for some reason the represented net profit is not yet verified, you have the right to make your contract becomes null and void and proceeds no further or you obtain the opportunity to re-negotiate the price.

For your security BAMR conduct this work every week and our data base of verified management rights complexes dates back to 1992.

2. Lawyers will conduct the Legal Due Diligence

No two Management and Letting Rights businesses are the same and an exhaustive due diligence should be undertaken by a specialist Management Rights Solicitor on the following matters:-

  • The location of the office (whether it is on title or exclusive use);

  • All storage areas and other areas used by the Manager;

  • A complete search of the Body Corporate Records to ascertain whether there is any conflict in the complex and what matters are really important to the Body Corporate so far as the Manager is concerned;

  • A complete search of the By-Laws of the Body Corporate to confirm the Manager has exclusivity within the Scheme to carry on a letting business;

  • A review of the Caretaking and Letting Agreements so the Manager is fully aware of their obligations to the Body Corporate.

3. Financiers will prepare lending documents

4. You will meet the Body Corporate

The Body Corporate is allowed 30 days (from the time the current manager requests the transfer of Management Rights and provides all relevant information) to make a decision.  While it is possible that the decision can be made earlier, it is preferable to allow this time frame.

In preparation for meeting with the Body Corporate committee, an incoming manager should obtain business and personal references and prepare a Resume.  It is recommended that these be provided to the committee before the meeting.

The Body Corporate is entitled to assess the incoming Manager as to their suitability to carry out the tasks necessary.  In deciding to approve the transfer, the Body Corporate may ask questions on the following:

  • The character of the incoming Manager and related persons;

  • The financial standing of the incoming Manager and how much they are borrowing;

  • The terms of the sale;

  • The competence, qualifications and experience of the proposed Manager and related persons and the extent to which they have received an training;

  • Who will be doing the work;

  • Any other matters which the Management and Letting Agreements allow the Body Corporate the raise.

It is illegal for the Body Corporate to ask discriminatory questions.

5. You ensure your Licence is ready

As detailed in the Licence Requirements section, you would have previously completed your training and applied to the Office of Fair Trading for your licence.

At this stage, The Office of Fair Trading should have completed all necessary checks and your application will be waiting on the Certificate of Completion and Body Corporate approval which should be submitted two weeks before settlement.

For more information about obtaining your licence, please refer to the information on Training Providers and visit the Office of Fair Trading's web site.

6. Hand Over

The outgoing Manager will provide training one week prior to settlement and one week after settlement.

During this time, you will be able to complete all additional transfers and the setup of necessary accounts eg telephone, Internet access, Email accounts, Domain name etc.

 
◄Home  ▲Top of Page