Industry

Protecting Your Investment

There has been a lot of recent press targeting the management rights industry.

We all know that this adverse reporting is driven by a handful of unit owners with a very definite plan to unwind management rights.

Now, more than ever, building managers need to fight back and win the PR battle.

If you follow the basic steps that I set out below, you will go a long way to ensure that you protect your considerable investment in your business.

1. Treat your owners as your partners

Never, never, never take your owners for granted! They are your life-blood. By looking after your owners you are securing your goodwill.

Your goodwill = your sale price (plus real estate and plant and equipment).

Most owners don’t want much. The key is communication. Don’t just rely on your end of month newsletter. Set a program to ring your owners on a reasonably regular basis. There is nothing like personal contact. This makes them feel comfortable enough to pick up the phone and call you if and when they have a concern about something.

If you have a slow rental month, explain why. If money needs to be spent on the unit, sell them the benefits of the expenditure. If your lines of communication are good, they will support you when you may need their help (like extending your term). Remember, everything in strata revolves about winning the vote – and most times, that vote is a simple majority!

2. Develop your people skills

The success of your business will be closely linked to the success of your people skills. It is a real art! As a service provider, you have to how when to roll with the punches and when to draw a line in the sand. When you do draw that line, you then have to make sure that you don’t back yourself into a corner that you can’t get out of. You need to be firm but polite. It is not always easy! Some people naturally have these skills – others don’t and have to develop them.

3. Know your duties and record your work

Your caretaking agreement is a contract between you and the owners corporation. You are required to perform specified duties in exchange for remuneration.

Clearly, your must know exactly what your duties are and not only must you carry out those duties, you should record (on a daily basis) what you did and when you did it. If you are later questioned by the executive committee about your performance, you can always hand in your daily work sheet. This is a very valuable tool in the event that you end up in a dispute with your owner’s corporation.

I strongly recommend that you have your executive committee (or strata manager) check through your work sheet to ensure that there is no misunderstanding as to the nature or the extent of your duties.

4. Isolate the agitator(s)

I don’t know why it happens like this but every building (no matter what size) always seems to have someone who dedicates their life to making the manager’s life miserable. Quite often, these agitators are elected to the executive committee. This is where they can really do some damage!

If you cannot successfully negotiate or reason with these people, then you need to isolate them from their fellow committee members or owners. You do this by ensuring that the other committee members and owners fully understand that you are doing what you are required to do under your agreement and you are doing it to a proper standard.

Make it clear that the agitator is totally unreasonable in their dealings with you. By doing this you are isolating that person to such a degree that their opinion won’t be respected (or sought) when that critical vote is taken.

Also remember that at the end of the day, most resolutions only require a 51% majority. It is my experience that when the agitators don’t get their way they eventually take their bat and ball and move on.

5. Be a member of your executive committee

There is nothing in the strata legislation that prevents you from being a member of the executive committee. There are restrictions however on your use of proxies when voting at general meetings on anything to do with your caretaking agreement.

The executive committee can be a very powerful group of individuals. They can strongly influence the relationship between you and the owners. Some committee members will say that it is a conflict of interest for the manager to be on the committee. However, who knows the building better than the resident manager?

If you are on the committee, you know first hand what is going on and you can react much quicker if issues start to fester. It also gives you an opportunity to stand up to the one or two dominant committee members who often hijack the agendas.

6. Plan to take your holidays

Managers work very long hours, generally on a 5½-7 day week. You reside at the complex and you live and breathe your work. In these circumstances you must plan and take regular holidays. If you don’t, you will become stale, agitated and your business will suffer.

If you plan holidays each year (well in advance) you will bring that necessary balance to your life. Most people don’t realise how badly they need holidays until they are actually on holidays. It is too easy to find excuses not to have holidays – thinking that you will take a long break when you sell the business after 3-4 years. Don’t fall into this trap!

If you plan early, you can secure a good replacement caretaker and obtain the committee’s consent (if required by your agreement). Remember, however, that a breach of the agreement by your replacement will constitute a breach of the agreement by you. The key is to find the right replacements early and book them on a regular yearly basis.

7. Options to renew

Don’t forget to exercise your options to renew your agreements within the timeframe referred to in your agreements. Miss it by one day and you could lose 100% of your caretaking income!

Col Myers
Small Myers Hughes 

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