ARAMA – Management Rights Industry Expo
ARAMA Event Wrap-up
During the last week ARAMA hosted its very popular Trades and Services Exposition which featured expert comments and insights from Australia`s leading specialists in the Management Rights industry.
Our expert panel of speakers covered the latest news and trends which can and do effect your business and your industry – The panel covered the latest legal news, legislative changes, information about bundling, EFTPOS charging and Advertising/Marketing surcharges, current multipliers, valuations and the latest from the banks finance departments.
The expert panel answered questions directly from the audience and also provided at least one hint or tip each which attendees could put into action in the next 90 days that will make a positive difference to their business.
This was a rare opportunity to get up close and ask questions of the experts over a cold drink and some yummy nibbles and was a great way to finish of our ARAMA events for 2017.
We wish to thank you for attending our ARAMA events during the year and we look forward to seeing you again early in 2018.
ARAMA’s Sunshine Coast event panel included Tony Rossiter (Holmans Accounting), Michael Kleinschmidt (Stratum Legal), Glenn Millar (Resort Brokers) and Mike Phipps (Mike Phipps Finance).
Will there be a new POA Form 6?
The panel confirmed that version five is the current version and that, so far as any of them are aware, there is no ‘version six’ in the works. They added that any version of Form 6 you have is valid so long as it was valid on the day that it was signed, regardless of future versions that come out.
Bundling in 2017 and beyond
This was a hot topic that Mr Rossiter spoke about in length, describing the proposed solution that was rolled out this year in response to changes in credit card charge legislation. He said that in the last 12 months he was met with a lot of resistance from clients who said, ‘this is a great idea but my owners just wont wear it’. However, he said half of his clients took up the challenge; he worked with them and the vast majority who rolled out bundling ultimately had 100% acceptance.
He also added that, for those who haven’t bundled, the key thing is that the charge to a guest cannot be more than the actual cost in merchant fees for processing the credit card, so you shouldn’t be charging guests more than you are being charged.
Banks are “bloody impossible”
Mr Phipps spoke about banks not wanting to take risks as they inwardly focus on compliance. He explained that this means deals are harder to get financed and everything takes longer.
Interest only rates are harder to get, according to Mr Phipps. Anyone who wants an interest only rate will have to come up with a better reason than ‘I prefer them’, he cheerfully warned the audience.
Investment groups taking over management rights?
A particularly interesting trend Mr Phipps noted was that more and more syndicates seem to be buying management rights, which he said “is great but is taking the oxygen out of the low-to-mid-range market”.
Mr Millar agreed that he’d also witnessed this trend in action in 2017, “more this year than in the last 10 years”, he confirmed, also agreeing that it was taking people out of the mid-range MR market.
Mr Millar managers who haven’t yet considered Gallery Vie, to tackle it “now rather than later”. Mr Millar reiterated: “Get out there and get your gallery vie compliance at your next AGM because it makes it so much easier to sell.”
Incentivise owners to vote in your favour?
Mr Kleinschmidt explained a vital piece of legislative decision-making that interrogated the rule that managers are not allowed to give financial rewards to sway votes regarding five-year extensions. The decision revolved around a management rights team who offered money for a furniture package to unit owners who voted in favour of their extension. This went to the QCAT court of appeals, and it was decided that giving ‘gifts’ to unit owners as part of a lobbying process was technically okay but gifts must not be given to body corporate.
Mr Kleinschmidt noted that this decision creates a “real risk” because if managers start to do this more widely and it becomes a trend, then suddenly everyone will start having to do it as owners will start expecting it.
He also added that in 2018, body corporates are likely to be feistier because they have a lot of insurance support. His tip for managers is to let them pick the fights so you don’t have to…