ARAMA 30th Anniversary Supplement

M AY 2 0 2 2

ARAMA has led the way for 30 years

By Grantlee Kieza, Industry Reporter

Thirty years ago, a Town Hall meeting was organised at Billy's Beach House at Surfers Paradise to thwart threatened changes to Queensland law that would have wrecked the Management and Letting Rights (MLR) industry, just as it was really taking off in Queensland.

Lawyers, real estate developers, financiers, tourism operators and holiday accommodation managers got together to form a not-for-profit association

to stop unfair laws casting a pall over the Sunshine State’s MLR industry. Because of the 70 or so people gathered at the first association meeting, and their privately funded actions to develop positive relations with government, the MLR industry is now in the enviable position of having a seat at the table of policy.

ARAMA is able to examine, consult and influence the outcomes of legislation to ensure that reforms continue to be favourable and are in keeping with the responsible development of the industry.

Those who met at the Billy's Beach House meeting put membership fees into a sinking fund, and the lawyers who attended went away and created

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an association called QRAMA (the Queensland Resident Accommodation Managers Association) its purpose was to provide services to members and lobby government.

QRAMA was incorporated as an association on May 20, 1992, but resident managers were supporting each other long before that, and have continued to do so following a name change to ARAMA in 2007, made to reflect the membership from around Australia.

For more than three decades ARAMA has been at the forefront of advocacy for the MLR industry. The Australian model of management rights that has developed from humble beginnings has been embraced, tried and tested internationally.

ARAMA’S CEO Trevor Rawnsley says what started out as an improved service delivery model for holiday makers on the Gold Coast has now blossomed to include longterm residential tenancy accommodation in schemes right across Australia and in many other parts of the world.

ARAMA CEO Trevor Rawnsley

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ARAMA CELEBRATES 30 YEARS

“Nobody does it better than a resident manager and we are now celebrating the official formation of our organisation that began in May 1992,” Mr Rawnsley said.

concept of owner operated MLR as the most effective method of serving the interests of unit owners, bodies corporate (or owners corporation), tourists and tenants, and optimising the industry’s growth and reform.

“State laws are more user friendly towards MLRs in Queensland than they are in other states because QRAMA and then ARAMA helped to craft them.

The pioneers

“In the 1970s the Gold Coast became Australia's playground and the tourism boom soon spread to the rest of Queensland.

“If it wasn't for developers embracing the MLR concept, the Sunshine State simply wouldn't have the tourism industry it has today. Instead, we would be like Victoria and NSW, with an emphasis on five-star hotels, motels, caravan parks and dodgy party houses spread throughout the suburbs and regions.

“As ARAMA celebrates our 30th birthday this year, it’s a timely reminder that we are the industry’s insurance policy, the association that

Coolangatta Airport, Gold Coast, 1963. Queensland State Archives Item ID436305, Photographic material

thwarted legislation that would have devastated the MLR landscape three decades ago.”

Mr Rawnsley said the average worth of each MLR business in Australia was a heft y $1.5 million, and ARAMA provided insurance for the industry, not just through discounted conventional policies covering fire and accident, public liability, and legal fees “but more importantly, through our advocacy and

the way in which we continue to represent this industry.”

MLR generates $55 billion for the Australian economy annually and that number is only rising as more Australians embrace high density living options in both the long-stay residential and short-stay tourism accommodation sectors.

ARAMA continues to play a critical role in promoting the

Queensland tourism has come a long way since the 1960s. Back then holiday flats in the state usually involved a small building with a handful of units available for casual rental on a “walk-up” basis. At that time, the owner of a property (either a block of holiday flats or a motel) was the office manager, maintenance person and cleaner, all in one.

Both types of properties usually were without cooking facilities except for a kettle or a jug, and they involved a shared laundry. Marketing was usually restricted to an ad in the local paper and an A-frame sign on the footpath. Guests usually checked prices by driving around the various properties and walking in to check rates and availability. But several entrepreneurs ignited a tourism boom on the Gold Coast.

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Dave Ruxton

Bernie Elsey, a member of the Surfers Paradise Progress Association, hosted pyjama parties around the swimming pool at his Beachcomber Private Hotel in Cavill Avenue.

He copied the concept from the socialite party scene in London, after Princess Margaret attended one there and made international headlines.

In the 1960s there were still very few top-class international hotels on the Gold Coast, but soon strata title apartments grew like mushrooms. They were developed on a much more low-cost basis than other properties, with many of the developers selling all the apartments off the plan before they even started construction.

Another operator, New Zealander Stewart Anderson, who had the largest property in Orchid Avenue with 15 units, began attracting tour groups.

Dave Ruxton, a veteran of the industry, was operating management rights buildings in the ‘60s and he became chairman

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of the Accommodation Owners Association (AOA) on the Gold Coast.

Dave was a true pioneer of MLR. He met with Trans Australia Airlines (TAA) to strike a deal partnering the accommodation of AOA members with cheap airfares. The airline was interested in the new concept of fully self-contained accommodation, and 10 AOA members elected to participate in the TAA package deals.

Demand was such that TAA soon asked Dave to find more

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Before long almost 100 holiday properties managed by AOA members were involved in the package deals, and while some represented the biggest buildings on the coast, some were small blocks of flats or a house divided into three flats, or a high set house with a couple of units underneath.

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properties. Then, rival airline Ansett , hearing about the program’s success, asked if it could also offer deals and soon both airlines had package prices for the AOA group.

ARAMA CELEBRATES 30 YEARS

Owners realised that to remain part of what became very lucrative arrangements with the airlines, they had to update and improve their properties, benefitting the tourism industry as a whole. The cheap airfares and direct flights from Sydney and Melbourne into Coolangatta airport, the subsequent large influx of Japanese tourists, the pioneering work of developer Bruce Small (with his Gold Coast meter maids) and a big nationwide push from operators to promote tourism, made the Gold Coast the national leader in the holiday industry.

The accommodation morphed into a MLR model with the rapid construction of tourist apartment buildings to meet the demand.

The concept then grew to the Sunshine Coast, which had a new airport, and then other areas including Cairns, Townsville and Hamilton Island.

The Queensland tourism industry benefited from having a number of international airports and there was enormous development taking place as well as attractions such as the

Mayor Bruce Small with entrants in the International Air Hostess Quest

Gold Coast casino and theme parks. The developers of holiday apartments realised that they could also pick up another half million dollars or so by selling MLR to their buildings as cream on their development.

It was a wonderful business model, that benefitted everyone involved in tourism.

major building on the coast, with a membership of 120.

The developers could sell the apartments at a very reasonable price, and they would be looked after by an onsite manager.

The owners would stay in it for a couple of weeks of the year and then rent it out.

The birth of QRAMA In the late 1980s the Queensland Government looked to follow the path of other states which restricted the development of holiday apartments, declaring that strata title buildings were for permanent residents only.

By the 1990s, tourism blossomed with the AOA’s central reservations letting pool now representing nearly every

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ARAMA CELEBRATES 30 YEARS

president Kim Cox told Resort News that the holiday letting business managed by QRAMA members generated $200 million annually and those self-catering holidays were now the backbone of the domestic tourism dollar.

Owners would not be able to rent them out on a holiday basis and there would be other restrictions.

But in 1992 the Queensland Resident Accommodation Managers Association (QRAMA) was founded to advocate against the proposed changes to legislation that would have wrecked the MLR industry in Queensland.

As a result of that advocacy

by QRAMA, the government included references to tourism enshrined in the legislation.

It mandated that one of the purposes of the new legislation was to encourage tourism, therefore state government encouraged local councils to be favourable with development application approvals.

This meant businesses that looked like the MLR schemes we have now were able to flourish.

The legislation allowed restricted letting agents to sustain their commercial position within the old Building Units and Group Titles legislation.

As legislation was reviewed

Barry Turner

and updated to meet the rapid growth in density living, QRAMA helped shape legislation in the new Body Corporate and Community Management Act (BCCM) which initiated major industry reforms in 1994 and 1997 and saw the creation of a range of accommodation modules.

As Australians further embraced high density living and the industry continued to grow rapidly, QRAMA became ARAMA in 2007 and the NSW Association was founded to ensure the national agenda was addressed.

The value of advocacy ARAMA has been fighting for the rights of resident managers since its inception.

Those self-catering holidays remain the backbone of the industry which has grown exponentially in the years since. And ARAMA has been the insurance policy for the industry, making sure legislation protects rather than harms such an important piece of Australia’s tourism revenue.

Kim Cox

Back in 1998 QRAMA supported the management at Ocean Breeze in their damages case that is said to have cost the building’s body corporate $1 million.

The value of management rights

In his Resort News columns, QRAMA’S then President Barry Turner reported that the association was having major input into the Body Corporate and Community Management Act, and the Code of Conduct for the Agents and Motor Dealers Bill.

Management rights have been operating in one form or another for more than 50 years, developing a successful operating track record to match the growth of the community and strata title industry.

For the first time legislation recognised the role and responsibilities of restricted letting agents and this was a huge milestone for the industry.

In 1999, the next QRAMA

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Mr Rawnsley said everyone in the sector should be grateful to the pioneers who created “a cohesive and reputable industry association that has paved the way for management rights to prosper.”

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“ARAMA has undertaken a comprehensive review and modernisation of its constitution to better align with its national and state responsibilities, as the industry develops and grows,” Mr Rawnsley said.

“The fact that governments have legislatively recognised the MLR industry as an integral part of the high-density living management structure of the strata and community title industry continues to provide opportunities for ARAMA to underpin the professional development and culture of those working in the management rights industry.”

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ARAMA also protects its members through innovative help In 2020 ARAMA introduced its A-MAP, ARAMA’S Member Assistance Program, which provides a crisis counselling hotline. In 2021 A-LEGAL was launched, providing free legal cover of up to $250,000 if members become involved in litigation.

As a regulated industry, management rights exist in a diverse range of long-stay and short-stay residential complexes in strata and community title properties. Australia now has about 240,000 schemes, 3300 of which are recognised as “managed” complexes. The MLR industry today reflects a business that not only has to attract visitors but also investors.

Gold Coast Meter Maids – Image: Alistair Paterson Dave Keeshan Petra, Flickr

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ARAMA CELEBRATES 30 YEARS

“Onsite management rights models operating in strata and community title properties are understood to offer owners numerous advantages, including higher rental yields and lower caretaking and facility management costs,” Mr Rawnsley said.

“For over 30 years ARAMA and its predecessor QRAMA have been at the forefront of advocacy for our industry. Our lobbying work in Queensland back in the 1980s and early 1990s is the reason management rights in Queensland is such a lucrative business model today. And we’re celebrating that in May 2022.”

A RAAS PROPERTY GROUP EDITORIAL

From Little Things Big Things Grow

A story of change, challenge & opportunity in Management Rights We know that every successful industry can, over time, become set in its ways! The management rights industry used to fit this picture. For 30 years, the MR business model barely changed --- a “mum and dad” team ran the business; the rental pool was stable, and all was well with the world! Then about 20 years ago, three things happened that changed the landscape forever.

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Outside agents began to attack managers’ rental pools causing grief and financial loss Big corporate entities began to pay big dollars for the larger “mum and dad” complexes The embryo of Resorts Accommodation & Sales (RAAS Property Group) was launched from a home office at Alexandra Headland!

The first of these was bad news for managers; the second proved problematical for some and the third has grown to be one of the great “paradigm-shifting” success stories in our industry.

Twenty years ago, Geoff Glanville realised that a change in the law governing the sale and management of properties in Queensland, enabled Resident Managers to hold a Real Estate Sales registration alongside their Restricted Letting Agents Licence, provided they were employed and supervised in their sales activities by a fully licenced agent.

From this, the RAAS concept germinated and began to take shape in Geoff’s office on the Sunshine Coast. He established an agency of onsite managers with sales

registration, collating the information and support they needed inside a dynamic website.

RAAS Real Estate was born on 1 September 2002, but not before tens of thousands of dollars had been spent on the website that would form the backbone of this dynamic new business. After prodigious door-knocking to explain the new concept, eventually some 25 Resident Unit Managers came on board to be the first “RAASers”.

The second phase of the business started when Mike Butler (an old real estate colleague) and Rusty Lush accepted Geoff’s offer to take on the licence to use the RAAS concept in Brisbane and Gold Coast.

This move provided the growth path that allowed a clever initial idea to develop into the successful business that exists today. Between them, Geoff, Mike and Rusty had nearly 80 years of real estate experience, with skills that complimented the other two. Before long, RAASers numbered in the hundreds!

Both Mike and Rusty owned MR businesses and had been involved in selling MR businesses for some time, so it did not take long to see the potential for RAAS to move into management rights brokerage. Because of the unique relationship RAAS had with its onsite manager/members, this extension was a natural evolution.

RAAS Rights was born just one year after RAAS Real Estate, and soon became a leader in the marketing of MR business.

FAST FORWARD 20 YEARS, RAAS REMAINS A LEADER IN THE SALE OF MANAGEMENT RIGHTS Some of the cast has changed, but the basic, successful concept of RAAS remains the same. Geoff retired some years ago and is now a published novelist. In turn, Mike and Rusty sold a majority stake in RAAS to well-known Queensland property identity, Christopher Jones.

Chris recognised that some onsite managers were not comfortable as salespeople, so introduced an “on the ground” sales team to assist, while the important bond between vendor/owner and the onsite manager remains.

One thing that has not changed over these 20 years, is RAAS’s support for ARAMA. May we take this opportunity to congratulate the team at ARAMA on their important anniversary and look forward to a long and continuing relationship.

raasrights.com.au

ARAMA: Get with the strength for representation This month ARAMA celebrates its 30th birthday and honours the way it built, strengthened, and continues to protect the Management and Letting Rights (MLR) industry.

These days 80 percent of Trevor Rawnsley’s focus as ARAMA CEO is advocacy on behalf of the industry. For everyone who benefits from MLR success, it’s important to remember who dug the well and who still watches over it.

MLR contributes $55.5 billion to the Australian economy annually, and ARAMA is working to ensure the safety and wellbeing of the industry 24 hours a day, seven days a week.

Much of the reason for the strength of the industry is that ARAMA was there putting in the work on behalf of its members to prevent changes in law in the late 1980s and early 1990s – changes that would have wiped out the industry at a time when it was starting to establish itself. ARAMA continues this work today.

Without ARAMA, MLR businesses would look vastly different to the way they look now. They would be worth less and they would not have the same kind of protections they currently enjoy.

ARAMA’S message to the industry, even to rights holders who are not ARAMA members, is that the association has been servicing their needs for over 30 years by protecting them, advocating for them, and representing them by lobbying the MLR business model to

The PROPERTY BRIDGE team are proud to extend our ongoing support to ARAMA as the Management Rights industry’s peak body.

We acknowledge the valuable advocacy work ARAMA undertakes on behalf of our industry.

governments on behalf of the industry. As a trusted industry body, ARAMA is listened to by the legislators and can open doors that a solitary business would never be able to. ARAMA members can have a say with direct input into the laws that affect their business.

insurance for those businesses, not just through discounted conventional policies covering fire and accident, public liability and legal fees, but more importantly, through advocacy.

ARAMA is a collective of the combined efforts of its members and is like an insurance policy, making sure that the MLR industry stays strong and profitable. That is its role. The more people who join the association and retain their membership, the stronger the MLR industry will become, and the better it will be for everyone involved in this wonderful business.

ARAMA also safeguards its members through innovative assistance.

The average worth of each MLR business in Australia is $1.5 million, and ARAMA provides

Legal and emotional aid

Under a new exclusive, membership service called A-LEGAL, ARAMA provides free legal cover of up to $250,000 if members become involved in litigation over such matters as protecting their contract from unfair termination, workplace health and safety, unfair dismissal, tax audits, defamation, discrimination or in other disputes associated with caretaking service agreements.

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In 2020 ARAMA also launched A-MAP, ARAMA’S Member Assistance Program, which provides a crisis counselling hotline. Members can pick up a phone and in 20 minutes they can be talking to a qualified psychologist or crisis counsellor, who will give them the tools and advice to deal with whatever problems they face in stressful times.

A-MAP and A-LEGAL are free for ARAMA members. No one else provides these services to management rights holders.

“And we are always ready to advocate on their behalf. A few years ago, an ARAMA member in Cairns received a visit from a tax auditor who asked why they were not charging GST on their holiday rentals like hotels and motels did.

ARAMA also provides a priceless array of free operational advice, and members can benefit from the fact that the association is available to give advice and assistance 24/7, 365 days a year.

The importance of advocacy

“The tax auditor produced a tax bill of more than $380,000 for failing to pay GST backdated to the preceding three years. The tax man made an order that the resident manager should start charging GST immediately and if necessary, re-coup the unpaid tax from the individual lot owners AFTER the tax bill was paid.

ARAMA CEO Trevor Rawnsley said membership of the association could mean the difference between a roaring financial success and failure in a MLR business. “ARAMA is at the coalface of any disputes affecting its members,” he said.

“That tax bill would have ruined that resident manager and closed the business if he had not been an ARAMA member. Instead, ARAMA put together a team of specialised taxation and legal experts and got to work with a successful appeal against the tax ruling.

“Without ARAMA advocating on behalf of the entire industry every other building manager who faced a similar challenge would have had to fight the Tax Office on their own. It could have meant financial ruin for many operators and Armageddon for the MLR industry as a whole” he said.

“Then, about three years ago the NSW Government was about to introduce some major reforms to licensing laws.

One proposed law (if passed) would have required anyone who bought a management rights business to obtain three years’ work experience as a real estate agent before they could operate an MLR business and operate a trust account.

“ARAMA told the government that it was a policy change that would ruin the entire industry and end a great resurgence in NSW tourism by costing thousands of bed nights.

“ARAMA successfully argued for a re-think of that policy as it would have decreased the value of a typical MLR Business in NSW from (for example) $2.5m to $750,000 at best. If ARAMA hadn’t acted swiftly and achieved that outcome, it could have wrecked the MLR industry in NSW. “ARAMA’s advocacy work also saw the break-up of PAMDA which brought about the birth of the Property Occupations Act in Queensland.”

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ARAMA CELEBRATES 30 YEARS

Mr Rawnsley continued: “It was something that simply would not have happened the way it did without the association’s involvement. Extensive lobbying for resident letting agents’ licensees included the removal of the requirement to live onsite, a more efficient and user-friendly assignment process, the removal of caps on commissions and the capacity to have a license for multiple buildings wherever they might be located.

“ARAMA also helped to ensure that the transfer fee was based on the period as resident manager, capped at one or two percent for the first two years and zero percent, thereafter, saving tens of thousands of dollars on the sale transaction.

“ARAMA has also become a pre- approved association authorised to deliver certain components of the continuing professional development requirement for licensees in NSW. “Other key achievements in recent years included providing financial support for the Victorian Court of Appeal action against a manager over the use of a Class 2 building for short-term letting.”

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Education and interaction ARAMA also facilitates various events throughout the year to provide an environment for collaboration and information exchange. These include regional meetings, trade shows and social events for interaction between members and affiliates on various topics. The association also offers a dedicated membership services manager, an interactive website, resource hub and help line, as well as comprehensive education and training courses.

But it is the advocacy role that is the great protection of the MLR industry and ARAMA is involved in it every single day, successfully navigating numerous challenges over the years.

Whether it’s the threat of competition from outside agents or facility management companies, emerging digital disruptors such as Airbnb and Stayz, the exorbitant commissions and bullying tactics of Online Travel Agents, or local zoning laws proposing bans on short stay letting, new governments, ministers and

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ARAMA Roadshow, Images supplied

bureaucrats will always be provoked by interest groups with self-serving agendas to curtail the business of management rights.

Mr Rawnsley said his association was grateful to be consulted by various government legislators and policy writers on proposed legislative changes before they were made public.

“This is a huge benefit for members because their voice can be heard and listened to,” he said. “However, having influence at the top level is a numbers game, governments respond to numbers and the more members we have, the more representative power we have.”

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MR Sales would like to congratulate ARAMA on 30 years.

We support and appreciate their contribution to the Management Rights industry.

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Our expertise offers comprehensive support services to assist Resident Managers For more information please contact: kelley@lettsrebuild.com, call 0402 158 136 or visit lettsrebuild.com ARAMA CELEBRATES 30 YEARS

Resort News - May 2022

15

Why ARAMA is such a hit

By Grantlee Kieza, Industry Reporter

One of Australia’s most experienced and successful management rights specialists, Alex Cook, first came to Australia as a disc jockey and music promoter, but he has recorded even more hits in property.

Now a director of ResortBrokers, Brisbane-based Mr Cook has sold more than $250m in management rights with some of the biggest sales in Australia and has been appointed to the ARAMA board.

“Becoming an Associate Director of ARAMA is a great honour after my first decade in the industry,” Mr Cook said.

“I've always been a big proponent of ARAMA, and if you are active in the management rights industry, I really see it as your duty to be an ARAMA member.

“Management rights is built on legislation, and legislation can be changed. It’s critical to have a professional body protecting and defending the industry against those who would benefit from its demise. A lot of people out there don't like management rights, they don’t get it or they're jealous of it and they try to make changes to it and that can devalue the industry.

ARAMA does a wonderful job in representing the industry and getting our position across. Even experienced managers need to consider ARAMA as an insurance policy for all the money they have invested in the industry.”

John Mahoney, from Mahoneys lawyers, who has been ARAMA’s Service Provider of the Year since 2019, said: “Quite simply, our industry owes much of its success and standing in the community to the efforts of ARAMA. I encourage all resident managers to become members of ARAMA so that they can benefit from the services it offers and

help but think about how fortunate the industry is to have had such great advocates.

“Regrettably, many resident managers are unaware of the ‘behind the scenes’ work that ARAMA has done over many years, and continues to do, for their industry.

John Mahoney

so that ARAMA can continue the exceptional work it does behind the scenes to protect and improve our industry.

“As I once said in an article, I wrote for Resort News in 2010, it is difficult to imagine where the management rights industry would be today had it not been for the involvement of ARAMA and its precursor, QRAMA. “In looking back at some of the issues they have had to battle over the years, I cannot

“Although not appreciated by many, the most critical, and most successful role that ARAMA plays, and historically the reason why ARAMA exists, is to represent the management rights industry in dealings with the government in statutory review and enforcement and, where appropriate, in the courts. The other critical reason for its existence is to educate and inform participants in the industry.”

Jo Matthews, who runs the fabulous Toscana Village Resort at Airlie Beach, says ARAMA should be the first port of call for anyone wanting to enter the management rights industry.

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receive industry updates, the association delivers a regular schedule of education material, seminars and training events and a great deal of work behind the scenes as was evidenced in the clean-up after the recent floods in Queensland and NSW.

Jo Matthews and David Cummings

“I would advise anyone looking to get into the business to get involved with ARAMA because it’s the group that does so much for us,” Ms Matthews said.

“ARAMA has like-minded people who are always ready to share advice. You need that help when you’re starting out.”

Paul and Francine Tuddenham took over the plush Peninsula at Airlie Beach last year.

“Joining ARAMA is very important and by attending their functions and seminars they will guide you and help you as much as they can,” Paul said.

Former golf pro David Ekberg is hitting a winner

Former golf pro David Ekberg

at Mermaid Beach with his Beaches on Wave complex.

He says taking advice from ARAMA is essential for anyone in the business.

“People are spending $1m and sometimes a lot more to get into management rights, which is a huge amount of money,” David said.

Mike is a board member on ARAMA and has a big complex called Riverside in Brisbane.

“Mike gave us advice right from the beginning, even making sure we got the right complex. I looked at a few properties that I thought would be good, but he said ‘no’ to them for various reasons.

“I did an ARAMA course and went to one of their training days.

“When we bought into Beaches on Wave, he helped us sort out a lot of things early on to help it run smoothly.”

“I asked the CEO of ARAMA, Trevor Rawnsley about getting help in the business and he recommended Mike O’Farrell.

While many in the management rights industry might see ARAMA membership as the opportunity to network with peers or

Michael Philpott, from MR Sales, said: “ARAMA provides a forum to protect, grow and educate the industry and provide access to like-minded professionals and organisations that have considerable experience and want to add value to the industry.

Additionally, as a collective group we have a voice with government that is heard and without ARAMA that voice is insignificant in the context of politics. ARAMA is very much an insurance policy for our industry.

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17

“It has been the voice that has kept the industry alive and continued to thrive, lifting the level of professionalism along the way. ARAMA also protects the industry from discussions over building classifications that have the ability to close a number of management rights. It is essential to the long-term protection and survival of the industry and is very much a cheap insurance policy for every member’s investment in the management rights sector.”

Lawyer Frank Higginson, from Hynes Legal, said the management rights industry needed “a single voice of reason to protect it.”

“We all see what happens to fragmented industries, they can get run over by any number of things, not the last of which is regulatory change,” Mr Higginson said.

“If ARAMA is not at the table, then the management rights industry has no protection from those who would seek to change it.

“With membership numbers comes bargaining position and influence. But the thing that gets me the most about people that own management rights not being members is that they more than likely have their life savings tied up in these businesses and the membership fee for ARAMA is a very small price to pay as a form of insurance to make sure that their investment is protected.”

Mr Higginson said the “protection from undue or untoward legislative change” had been one of the biggest achievements of ARAMA. John Punch, formerly SPG Lawyers, said he always encouraged all of its clients (both newcomers to the industry and existing operators) to be ARAMA members, because of the need for strength of numbers and financial support to the many aspects of the industry.

“I helped with presentations at many meetings of ARAMA and government actions and providing background support on all membership benefits,” Mr Punch said.

Landmark Resort and Spa in Mooloolaba

Membership fee for ARAMA is a very small price to pay as a form of insurance to make sure that their investment is protected

He said one of the biggest achievements of ARAMA has been its “active involvement in the establishment of laws to give a solid foundation for those operating management rights or investing in their ownership.”

“ARAMA has many roles to carry out for the management rights operators in Australia and particularly Queensland,” Mr Punch said.

Frank Higginson

John Punch

“One area is monitoring and providing input over the various government activities

Toscana Village Resort at Airlie Beach

18

Resort News - May 2022

in regulating all areas of development and conduct of management rights.

“This is particularly important in view of the various state governments having separate legislation.

“Another important role is promoting good and responsible activity by management rights operators so that standards are maintained to keep the industry protected and held in high regard, politically and commercially.”

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ARAMA leads the way in overcoming challenges

By Grantlee Kieza, Industry Reporter

outside agency because they say they can do a better job, when in fact they can't. Real estate agents don't like us because we perform better. We deliver better returns and give better service.

COVID-19 has created havoc around the world, but it is just one of the many challenges the Management and Letting Rights (MLR) industry has had to battle in recent years.

“Lots of facility management companies such as cleaning companies don't like us, either, when they can't get into a scheme because the resident manager has the caretaking and cleaning roles locked away.”

Closed borders and positive tests wreaked havoc on Australian tourism, and then Queensland and NSW were hit by unprecedented flooding as resident managers came to the fore to safeguard their clients and lead the clean up after the carnage.

© stock.adobe.com

ARAMA director Alex Cook, from ResortBrokers, says from a commercial point of view the MLR outlook remains very positive.

The MLR industry proved exceptionally resilient through both these crises.

But the world of MLR faces many other attacks.

Whether it’s from committee members who don’t understand the amount of work involved, or the commercially jealous looking to move in on their territory or grab a few bucks from creating disputes, resident managers are often under siege.

Their antagonists can include outside real estate agents who get outperformed and deliberately muddy the reputation of the on-site letting agent, especially if they own a lot in the scheme. Sometimes if those outside agents get on a committee, they will start marketing their own services over those of the resident manager, who has already heavily invested in the property.

Everyone in MLR, and in particular every operator, should be reminded that they must deliver outstanding customer service every day in every way.

They must keep reminding their customers, the lot owners in the body corporate, how their essential role as an onsite service provider delivers such value and benefits that their customers (lot owners) never want them to go.

20

Resort News - May 2022

As a Deloitte Report commissioned by ARAMA showed, a resident manager can do the job better than anyone else. It is therefore up to the resident manager to demonstrate this every day to keep the disruptors out of their properties while ARAMA keeps watch on behalf of the industry.

In a different arena, poor service and lack of customer focus provided a clear pathway for Uber to muscle in on the taxi business.

The MLR industry has its own disruptors and ARAMA remains vigilant in protecting it from all challenges, including changes to legislation that would impact MLR owners.

As ARAMA celebrates its 30th birthday this year, it’s timely to remember the way the association protects resident managers, many of whom complain of being verbally abused, harassed, demeaned, or even bullied as they try to do their work.

MLR operators are experts in their schemes. There are multiple

lots in a scheme and the resident manager knows everything there is to know about each and every one of those lots. They're on the spot for preventative maintenance and they're looking after the cleaning and general garden upkeep, whereas if an owner is letting through Airbnb or an outside agent for instance, they don't know anything about the property apart from: “I've got an apartment and I want some money. I don't care if there’s any problems anywhere else that need to be sorted because I'm not going to be there.”

An onsite manager makes sure that the inventory is checked, and that people are escorted to their apartment if they need to be. They make sure guests know where they can and can't park and what the scheme’s other by-laws are, and if something is not right, the resident manager can deal with it (the leaky tap or whatever) instantly.

“Yet,” says ARAMA CEO Trevor Rawnsley, “some real estate agents are constantly trying to pick off a resident manager’s letting pool and take it to an

ARAMA CELEBRATES 30 YEARS

“During COVID, management rights still proved to be very viable businesses,” Mr Cook said.

“Where I have concerns is around legislation and the power of the bodies corporate, which can potentially cause managers a lot of problems. I feel bodies corporate are getting a bit more empowered and I would like to see them become more professionalised and regulated.”

ARAMA is also pushing for a bigger female representation on its board.

“Fifty-two per cent of the Australian population are women and the majority of MLR businesses are run by women,” Mr Rawnsley said.

“Karen Nelson and Jo Matthews have already has been on the ARAMA board, and we are doing everything we can to encourage more women to take leadership roles within the industry.

Karen Nelson

“We don’t have enough diversity on the board. Most of the women involved as operators are short on time, but on many of our branch committees the presidents are women, and we want more on the board.”

The Gold Coast’s Kelley Rigby, a working mum with young children, has been identified as a future leader at ARAMA. Her company Letts Rebuild is a management letting rights consultancy focused on supporting resident managers, while another of her businesses, Friendly Agent, helps match agents to those managers who don't want to, or can't be involved in sales.

Kelley Rigby

with the property, and how much rent an investor can expect.

Ms Rigby said it was imperative for onsite mangers to sell their talents or work closely with an agent who would.

Ms Rigby, who has spent almost 20 years in real estate, tells onsite managers they must sell themselves as they fight to protect their investments from outside forces in a highstakes real estate battle.

She advises managers that they are in the box seat when it comes to sales in their own buildings, as they are already collecting rent for owners every month, know exactly what's involved

“If the manager is not involved in the sales process,” she said, “it creates the opportunity for outside real estate agents to come in and the likelihood of that property going to another investor is sometimes slim.

Sometimes buyers can also be misinformed about the manager’s role if an outside

agent is involved, so that the new owner thinks the manager is some kind of fulltime concierge. That can obviously create problems for the manager later, problems that can be sorted if the manager is there at the sales process.”

and key stakeholders in the

Resident managers are required to have a broad and thorough knowledge of everything from legislation and compliance requirements to administration and property management, customer service and communication skills.

ARAMA identifies as critically

They have wide-ranging responsibilities and obligations to owners, residents and other stakeholders and their role involves more than 230 federal and state acts and regulations.

members’ commitment, but in a

While it can be difficult keeping abreast of legislative reforms and changes to local council property law, other challenging trends continue to emerge such as the increasing power of Online Travel Agents (OTAs) and the rise of digital disruptors such as Airbnb and Stayz.

ARAMA continues to work with all levels of government

accommodation and tourism sectors to ensure the long-term protection and success of the management rights industry.

Education and personal development are also areas important for MLR businesses to thrive into the future.

Mr Rawnsley said: “With many of our members ‘mum-and-dad’ or independent operators, we have long fostered a ‘members helping sophisticated industry faced with tremendous growth and such a high profile, there is a genuine need for a focus on education and personal development.

“We continue to do all that we can to lift the skills, abilities, and qualifications of participants in the industry, and our programs adapt with industry requirements. That is why we have so much information on tap as well as frequent seminars and training days.”

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Resort News - May 2022

21

Onsite letting agents build support

By Grantlee Kieza, Industry Reporter

to a high standard. It's a good working relationship.”

Paul Cooper is a body corporate chairman at a landmark Brisbane property and a great supporter of Management and Letting Rights (MLR).

Mr Cooper said a harmonious relationship between the MLR holders and a building’s body corporate was essential for increasing the value of the rights.

For the last seven years Mr Cooper has been chairman at the Evolution building over the Brisbane River on the corner of North Quay and Tank Street.

It’s a 36-floor skyscraper with 170 lots and a hard-working management rights team.

“I think we are very fortunate in our building to have management rights,” Mr Cooper said.

“What I like about our management rights team is that with our body corporate, we

“As the quality of the building increases, so does the value of the rights,” Mr Cooper said.

Paul Cooper

are both working to implement what is best for our building.

“Both the management rights holders and the committee are putting money and time into protecting the assets of the building. If we need something done, then we work on it together to benefit both parties.

“We're very fortunate at Evolution that we have a good building manager so that the common property is always maintained

“If we, as a committee, invest money upgrading our gym or our swimming pool area it has a knock-on effect for the management rights holder because they are able to charge higher rates per night’s stay.”

Mr Cooper is a strong supporter of ARAMA because “resident managers need to have a voice.”

“ARAMA is a voice of reason when it comes to keeping managers up to date with current legislations and trends,”

He adds it’s also important for a building to have only onsite managers involved in the sales and rentals of a scheme’s lots.

“My preference is that we keep Airbnb and external agencies out of the building, and that all the selling is done by those who have invested money into the building through management rights,” he said.

“That would certainly be my preference. Management rights holders have effectively bought a short-term letting pool and it’s only fair that they receive the revenue from that short-term letting pool.

“A body corporate should assist those rights holders by encouraging owners not to use outside agents but to use the on-site management.

“I think that’s very important.”

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Resort News - May 2022

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Inspiring award winners TOP of their game

By Grantlee Kieza, Industry Reporter

Mr Mahoney has been involved in management rights for 30 years.

Karen Nelson had key roles in two of Australia’s great tourist attractions, and at ARAMA’s last TOP awards she took out the Resident Manager of the Year Award (mixed letting) for her work at the magnificent Lanai Riverside Apartments in Mackay.

“I got involved about 15 years after the business of management rights kicked off in the mid1970s,” he said, adding that he has always believed in the strength of the MLR model as a sound investment.

The award was presented at a gala function at the Victoria Park events centre, Brisbane. Karen has had an amazing journey from her first home in the outback, at Tibooburra, New South Wales, near the state borders of Queensland and South Australia.

Her father was a boundary rider on the border fence, making repairs so the dingoes didn't cross over, and he paid £1 for her first pair of R.M. Williams riding boots.

“Dad decided to go to Longreach for a change and I went too, and I ended up working at the Stockman’s Hall of Fame there, and I was CEO of the Qantas Founders Museum,” Karen told Resort News.

“There are not too many businesses that you can buy with big returns without any qualifications and where you have a 25-year contract with the body corporate.

Karen Nelson accepts ARAMA Resident Manager of the Year Award (mixed letting)

“It gives me a great sense of achievement to know I’ve come from very humble beginnings in the outback to running such a beautiful complex as Lanai.

My husband Ross and I bought the management rights to take us through to retirement and it's a great lifestyle.”

Karen said she was “stunned” to receive the Resident Manager of the Year Award for mixed letting.

“We do a combination of both short term and permanent letting within our complex. We’re an independent business, not part of a multi-national, and we just have a small team. But we were encouraged to put a nomination in for the ARAMA awards and wouldn’t you know it, we won.”

Guy Elliott, Nathan Eades & Stewart Shimmin

24

Resort News - May 2022

In deciding the winner, the ARAMA judges said: “Karen overcame challenges that required intelligence, skill, and an ability to work with others.

She successfully managed the complexities of the tourism industry, guests, unit owners and the residential facility management exceptionally well and all during a global pandemic.

Thrown in the mix were localised issues in Mackay not limited to the downturn in mining and an oversupply of local inventory.”

At the same TOP awards, John Mahoney, a founding partner in the law firm Mahoneys, was voted ARAMA’s top service provider for the second time running, though he said the award belonged to his whole team.

“People investing in management rights though, need to understand that a body corporate is not going to pay you a $150,000 salary to do nothing.

“You have to work at it and keep everybody on side.”

After a year of restrictions, the Brisbane function room last year was filled with the best of the best in management rights for the TOP awards.

Sponsored by Accom Properties, EBM Insurance, RJ Electrical Services and Hirum/HiSITE, the awards recognised the variety of stakeholders instrumental to the strength and success of the management rights industry which generates $55 billion in economic benefit for the Australian economy annually.

Michael and Karen Cross accept ARAMA Resident Manager of the Year Award (in the short stay accommodation)

ARAMA CELEBRATES 30 YEARS

The calibre of finalists was first class, ensuring the judging panel had their work cut out for them.

President for almost 10 years.

Eric was instrumental in leading the transition of ARAMA from its old management committee structure to a company structure with a Board of Directors who are elected by all members. Eric was welcomed to a very exclusive club by the ARAMA Life Members in attendance on the night.

The Resident Manager of the Year Award (in the short stay accommodation category) went to Michael and Karen Cross from Dorchester on The Beach, Gold Coast.

The judges said: “Whilst all of the applicants for the awards have shown great work and positive results, this year Michael and Karen Cross stand out as excellent recipients of the award. All the unit owners in their scheme back them, so there is a synergy created from their activities, interaction with body corporate management and committee, as well as with all types of unit owners.

It is a hard task to juggle all three and come out on top.”

ARAMA Life Membership awarded to Eric Van Meurs, from Atlantis Marcoola

including extending these outside of her workplace such as being a JP and member of Rotary. This is a sign of a loyal, communityminded person who is prepared to serve others. Georgina is running a very successful business.

She pays attention to details and comes across as a wellstructured and organised person.”

The Resident Manager of the Year Award in the long stay accommodation category went to Georgina Bishop from Newstead Terraces, Brisbane.

“Georgina is very proactive within and outside of the industry,” judges said.

The Sales Broker of The Year Award went to the young, driven and determined Nathan Eades from ResortBrokers, a

“Her qualifications are varied

team that has made a massive contribution to ARAMA and the MLR industry over some really difficult trading conditions.

It was the second time that a Sales Broker from ResortBrokers had won the TOP Award, following Alex Cook in 2019.

As a very special end to a very special event, Life Membership was awarded to Eric Van Meurs, from Atlantis Marcoola who has been a member with ARAMA since 2004 and its National

Georgina Bishop accepts The Resident Manager of the Year Award (long stay)

ARAMA CEO Trevor Rawnsley said the awards were “a spectacular display of our industry’s enthusiasm to celebrate their success and those of their industry peers in what has undoubtedly been a turbulent and unscripted 18 months.

“I think I can speak on behalf of the industry when I say we should all be proud of our achievements and the support that has been shown to one MLR delivers great value to a community title scheme and its lot owners, and the winners of this year’s awards displayed an exemplary level of professionalism and tenacity in an ever-changing landscape.

“We have no doubt this will inspire others.”

ARAMA TOP Award winners 2021

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25

World-leading business model fuels MLR

By Grantlee Kieza, Industry Reporter

from letting out the lots on that property for the owners.

Gold coast financier Nick Smith has spent 30 years in banking in England, Ireland, and Australia, and says there is no other businesslike Management and Letting Rights (MLR) in the world.

And he says the business model in Queensland, with state legislation framed in consultation with ARAMA from 30 years ago “is the reason why all these years later some owners can achieve multiples of six to seven times their annual profit when they sell their business, a figure very few other endeavours can get near.”

Peter Brewer

Around 38,000 people stay in resident managed accommodation in Australia daily, and there is a thriving industry underpinning everything from the upkeep of properties to guest satisfaction.

Nick Smith

The director of Red10 Finance, Mr Smith told Resort News that “from a banking point of view management rights is a resilient industry, where not too many things can go wrong. The business model itself is fantastic and probably not repeated in any other industry globally.

Without a doubt it would also be the lowest risk business to any financier.”

In Queensland over $150m is collectively remitted each year in the form of state government stamp duty taxes alone.

Nationally the industry employees more than 11,000 people.

Accountant Peter Brewer, of PBB Consult, also said the MLR concept, which is at least 50 years old, carried few risks “considering you are not carrying stock or debtors, and there is a body corporate salary coming in every month.”

That body corporate salary has been the lifeblood for many managers during COVID when for a time it was illegal to have a holiday in Australia.

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Resort News - May 2022

Alex Cook

Alex Cook, a Director of Resort Brokers, who focuses on larger MR transactions nationwide, said even with COVID lockdowns, permanent letting properties had remained “very stable businesses” throughout the pandemic.

Management rights is a business that gives the right to the owner of a lot, contained within a community title complex, to fulfil the role of an on-site caretaker and to operate an onsite letting business (of units

“Our company was doing big management rights deals when Australia was in a national lockdown, just after COVID broke out,” Mr Cook said.

“COVID hasn’t damaged their performance at all and if anything, it's probably pushed multipliers up in the permanent sector.

“The six times multiplier was always a bit of a benchmark in Brisbane, but you only got to that with the really big management rights. That’s changed over the last three or four years. We sold a portfolio of three smaller management rights (three completely different businesses) netting about $450,00 and we sold that at 6.3 times, whereas four years ago you would need to be netting $800-900,000 to get that figure.

“Certainly, at the bigger end of the market now, there’s very little stock of anything netting over $300,000 profit and that's pushing up multipliers.”

Trevor Rawnsley, the ARAMA CEO, said the MLR business model was extremely attractive to many investors because of the double income streams it offered, a body corporate salary to manage the property, and the rental commission

ARAMA CELEBRATES 30 YEARS

Brett Thompson

within the complex) on behalf of non-resident owners.

Brett Thompson, the general manager of the Landmark Resort and Spa in Mooloolaba, has spent 30 years in the accommodation business and tells prospective managers that “we are all commission salespeople, so it’s all about ‘bums in beds’, converting interest and enquiries into sales.

You must know the business back to front, too. I sometimes still work in reception, and I still make sure the phone is answered within five rings. I tell our staff to treat the customer how you want to be treated.”

Trevor Rawnsley said the MLR business model is what first attracted him to the industry.

“With management rights I didn’t have to carry a lot of stock, I didn’t

have to carry a lot of staff, and basically you could make money while you were sleeping,” he said.

“I'd go to bed at night knowing the place was 100 percent full and I would sleep very soundly that night. Because it’s about accommodation an MLR operator is not dealing with anything that's perishable like food, or anything that's likely to include unsociable behaviour like a pub or club. Furthermore, many management rights are very attractive as a family business because they are of a scale that can be run by one person, or a husband-and-wife team.

“It's a very good business model which returns 20-25 percent net, depending on your borrowing.

And there are investment syndicates that promote 14 percent return on investment.

“It's very unusual for any property to return less than 14 percent, and if they do it may only be down to something like a COVID interruption, a natural disaster or over-geared banking. Very few businesses can return 14 percent.

If your money is in the bank, you are lucky to get two percent on it.”

Mr Rawnsley said MLR businesses were driven by the basic human need of shelter. “As we've seen at the moment the demand for residential accommodation is through the roof.”

The MLR model is most suited to community title schemes (CTS), which currently house 40 percent of Australians, a number expected to rise to 65 percent by 2050.

Many of these complexes are managed by a resident manager, who plays an important role in serving the interests of various stakeholders including unit owners, bodies corporate, tenants, and guests. Not only are they providing caretaking services for the body corporate, but they also have a commercial responsibility, managing investments on behalf of lot owners.

While undertaking all their tasks at a property, resident managers must also meet the requirements of the Workplace Health and Safety Act and the relevant state equivalent to the Body Corporate and Community Management Act. Mr Rawnsley said while the resident manager’s role was often described as ‘resident

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unit manager’, ‘caretaker’ or ‘building manager’, those terms failed to embrace the work and responsibilities involved, and the benefits that the resident manager brought to the scheme and its stakeholders.

Commonly, the resident manager also monitors, enforces, and reports on possible by-law breaches on behalf of the committee. They are also licensed to act as an on-site letting agent for investor owners.

Resident managers are responsible for far more than caretaking and attending to building matters, they are also accountable to strict legislative requirements and report regularly to their clients. Each unit owner, including the resident manager, has made an investment in the scheme and success for both, depends on the marketing ability and their commitment to drive repeat business and wordof-mouth recommendations.

A few years ago, ARAMA commissioned a report from Deloitte which showed that a resident manager gives more bang for a property’s buck then alternate business models. The report also showed that a resident manager, acting as an onsite letting agent, delivers a better and higher return than an offsite letting agent might otherwise do.

With ‘skin in the game’, the resident manager has an obvious interest in the building’s presentation and overall street appeal, as it influences the ability to market the property, and the value of the manager’s investment. Being a resident manager is a 24-hour, seven-day per week commitment.

The caretaking function may be a “do it all” contract or it may involve supervising employees or contractors appointed by the body corporate.

Research undertaken by Griffith University into satisfaction levels with various management models found that unit owners favoured complexes with a resident manager. More than 85 percent of survey respondents strongly agreed that onsite caretakers are proactive in ensuring high amenity levels of the complex, as their income is dependent on return customers.

They also said resident managers can immediately attend to issues, even on weekends or late at night.

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ARAMA CELEBRATES 30 YEARS

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INDUSTRY PARTNERS

ARAMA recognises the very practical assistance that our industry partners provide for our industry, our association and our members. We ask that you fully support our industry partners and supporters in a show of appreciation for their support to us. ARAMA is also grateful for the ongoing support and encouragement of our valuable members, all of whom are helping to protect their business by investing in the continued success of the management rights industry. The future looks bright for ARAMA and we are really looking forward to the future for the management rights industry.

Membership enquiries phone: 1300 ARAMA Q Email: national@arama.com.au Website: www.arama.com.au