ARAMA REPORT
Are you minding your own business or stealing from yourself?
By Trevor Rawnsley, CEO, ARAMA
One of the costliest blunders management rights operators can make is leaving it to others to run their business. It happens more often than you might think. In fact, I was absolutely flabbergasted when I attended a recent industry function and heard the story of a manager who discovered he had been underpaid by $67,000.
His agreement stipulated a remuneration increase every year in line with the CPI— consumer price index—but this manager hadn’t checked to ensure the increases were being made for five whole years.
cooperate, he may need to ‘lawyer up' and take action through the courts—but at what cost? Apart from the legal fees and court costs, there’s the risk of further straining the relationship with the body corporate.
He wanted to blame everyone but himself for the mess, saying it was the body corporate manager’s job to adjust his payments. To me, it was a glaring example of someone not running their business but letting their business run them.
I get that we’re all busy, and yes, it would be nice to rely on others to be efficient and do the jobs they’re paid to do. However, when it comes to the little things required to run your business, you shouldn’t leave it to someone else to ensure they happen as they should and when they should. Little things can add up to big things, and in this case, big dollars have been missed due to poor business controls.
That misfiring manager will now have to approach the body corporate and ask for reimbursement of the money— accumulated in one big lump sum from five years of neglect. He might succeed and get the back pay, but doing that certainly won’t make him very popular in the workplace. If he doesn’t have a good relationship with the body corporate and they refuse to
at CPI time, ask what they considered the CPI to be, and then verify with his accountant that the remuneration was updated correctly. What might have started as a small CPI adjustment— especially during the COVID years—can compound into a very significant loss. In any business, attention to detail often determines success or failure. And what more important detail could there be for a business owner than ensuring they are being paid what their agreement states?
You can do the maths: in the event of a sale, the impact of the multiplier and the additional financial loss could be significant.
Yet, I’m staggered when I hear of managers putting their businesses up for sale and telling the valuer or broker they’re “not sure” about their exact remuneration when it’s time to include it in the sales document.
Surely a better way for him to manage his business would have been to contact the body corporate manager each year
How much a manager is paid is decided collectively between the body corporate and the residential manager
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It’s crucial to mind your business, ensure it flourishes, and verify you’re receiving fair remuneration
6
February 2025
INDUSTRY