Resort News - December, 2022

The legal stuff...

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Welcome to the last Resort News of 2022.

It’s been a year of extremes. I observed this as I looked back on my editor’s notes over the last 12 months. 2021 ended optimistically with talk of sector recovery, but 2022 fired off with a pessimistic bang and dire warnings about Omicron. In January, Queensland cases were doubling by the day, masks were reintroduced, and lock downs recommenced.

Then came the floods… We faced a huge clean up before green shoots of what was to become a remarkable recovery of tourism and the accommodation industry. From almost no face-toface meetups in 2020 and 2021 we embraced a series of industry events and massive celebrations.

For ARAMA, 2022 brought much to celebrate! In May its members partied in the Gold Coast, marking 30 years

Clarke, Editor editor@accomnews.com.au

of the association. The year was also filled with ARAMA social and industry gatherings, which culminated in another magnificent night in July at ARAMA’s 2022 TOP Awards.

Just as the sector celebrated success and room and occupancy rates soared, the industry was forced into battle mode. ARAMA took up arms to lead the fight against one of the biggest threats MLR has faced.

And with Queensland’s Unit Owners Association continuing to call for a reduction in the term of management rights agreements from 25 to three years, the fight goes on…

In September I reported on yet more problems faced by managers, caused by rising costs, limited supply chains, staff shortages and issues with clean linen providers. Despite these challenges, many followed a neon ‘light at the end of the tunnel’, provided by the inaugural Best of Tourism Awards 2022

This spectacular and fun night was organised by Marisa Millane with the help of Sam Steel and the team at Resly. For an industry that had faced so many hardships it was life affirming to see the amount raised on the night for charities, Move for Lexi, and The Tara Brown Foundation.

Moving on to November, where over 700 industry professionals

gathered to celebrate The PRET Awards 2022. Stay tuned, as full coverage of this magnificent event will be featured in a special January edition. What about this month? Grantlee poses the ‘what if’ question and examines the implications of switching from the resident manager MLR model. Paul Cooper reveals what makes an effective body corporate chairperson and ‘meet’ Richard and Leith Taylor to learn about their management rights journey in San Marino by the Sea.

Finally, I want to thank all of our Resort News readers and subscribers, many of you have been with us for over 25 years and we really appreciate your loyalty and support.

Wishing you all a Happy Christmas and Joyous New Year!

Cheers, Mandy.

Mandy

The high cost of switching from resident managers

By Grantlee Kieza, Industry Reporter

Resident managers can be cost-effective lifesavers - caretakers, caregivers and first responders all rolled into one, giving service that outsourcing could never provide.

An elderly lady resident at the Dorchester on The Beach complex on the Gold Coast recently lost her keys down the lift shaft. She was in a terrible state of confusion and panic, unsure of what to do.

But Michael Cross, who has run the complex with wife Karen for the last eight years, quickly came to the rescue in a way that no outsourced worker from facilities management ever could.

Mr Cross says he looks at his management agreement with the buildings’ owners as “just the starting point” for his role.

When all seemed lost for his distressed resident, Mr Cross immediately went to his safe, took out a spare key, walked the lady to her door and let her in.

“Our resident was looking at a bill for hundreds of dollars for a new set of keys if she’d gone through a locksmith,” Mr Cross said, “but I contacted our lift maintenance guy directly because I get on well with him and he retrieved the keys for a carton of beer.

“That’s just one of the many economic benefits a building receives under a resident manager. It’s like having a good neighbour permanently at the ready to solve any problem, and Karen and I are looking after the owners here in the way that any decent neighbour would.”

Mr Cross said he views his management agreement at the Dorchester “as the very least we have to do.”

“One of the major economic benefits to a building that has a good resident manager is that they are essentially

getting a free concierge service as well,” he said.

“Every resident manager who does well has a good rapport with their owners, and that concierge work which is not in our agreement shows owners that we are willing to go above and beyond our agreements.

“I might have an owner from Melbourne call and say, ‘Mike I’ve got a package coming and I won’t be up on the coast for another month. Would you mind just popping it into my apartment?’ And I’ll do that. If you had to pay someone to do that it would be quite expensive.”

According to ARAMA CEO Trevor Rawnsley, outsourcing all the tasks performed by a management rights operator to a facilities management company would be much more “than quite expensive”. Studies show that pool cleaning, and garden maintenance contractors will often charge 20 percent more than what caretakers would be paid in

their agreement because the contractor does not have the same guaranteed continuity in their role.

With constant agitation from various bodies such as the Unit Owners Association of Queensland and the Strata Community Association of Queensland to slash the length of management contracts from 25 years to as low as three, Mr Rawnsley said unit owners would quickly discover that management rights is the cheapest and most effective mode for looking after the interests of a building or complex.

He added that if facility management took over from onsite managers in the caretaking of a building, unit owners would quickly find out that while the grass might look greener on the other side, gardening contractors can charge “lawyer’s rates” and often they are in short supply, so they may find the grass takes longer and costs more to cut.

© Gil Ribeiro, unsplash.com

“There are time and motion experts who have produced figures showing that on 87 percent of occasions onsite caretakers are actually underpaid for the work that they provide compared to what an outside facility manager would charge,” Mr Rawnsley said.

“We put this down to the longterm nature of the resident managers’ contracts - the caretaking service agreement. Many managers are quite happy to trade off a remuneration increase for increases in term.

“But if you have a facilities management company running things, and let’s say they have a 12-month agreement, naturally they’re going to make sure they make a profit from day one. They want a return on investment immediately, whereas a caretaking service provider in a management rights context is not necessarily looking for a profit margin. Because they have a management rights business which includes the onsite letting, they tend to use the caretaking to control the standards of the building and enhance the profitability of the letting business. They want to make sure that everything is done properly in the building because it’s not only good for residents and owners, but it is also good for the apartment letting side of their business.

“A facility management company is a binary thing – where a task is completed, money is charged, and a profit is made. There is no trade off or leverage factored into it other than profit for activity. There’s nothing wrong with that, but it’s just a different way of working to a resident manager who has skin in the game at a property because he or she usually also owns a unit in that building.

“That’s why management rights is such a good business model.”

Mr Rawnsley said several large buildings had run management rights agreements down and decided to outsource the work, thinking it would be cheaper. But it doesn’t work out that way unless some of the owners are prepared to volunteer their time to do maintenance and cleaning,” he said.

“The work takes longer and costs more money if you take it away from a resident manager.”

Mr Rawnsley said facilities management companies generally treated a complex like a number and there was never the personal service that a resident manager would provide.

“The building may be one of 20, 30, even 100 that they work in,” he said.

“They do not have a vested interest in the scheme like management rights operators do; resident managers ensure there is a capital gain in the scheme. A facility management company only does what they are contracted to do and if they’re not paid enough, they simply don’t do it.

“Furthermore, there’s no immediacy. If something urgent needs to be done in the middle of the night, a facilities management company will take its time, but a resident manager will usually respond immediately. Responsiveness is a key ingredient to the success of management rights, and you will see managers climbing ladders in storms unblocking drains and gutters, trying to make sure the scheme doesn’t flood.

“Facility management companies won’t turn up on your doorstep in the middle of the night during a thunderstorm to help fix things.

“It’s the same with ad hoc requests. With a facilities management company requests must wait for approval, whereas a resident manager will do a task straight away. With outsourced companies if you have 201 tasks for them to do and you ask them to do 202 it’s not going to happen.

“Resident managers constantly look after things as they need

to be done, and generally do not charge call out fees. They even do the little things that might seem insignificant, from picking up papers, straightening pool furniture to checking whether the pool gate lock is rusty or not.

“If the facility manager has been assigned to clean the foyer that’s all they will do. They will not care if there is litter everywhere else, they will leave that to the volunteers - the unit owners.”

There is also the prospect of jobs taking longer, because when

there are more people involved there is a greater chance of misunderstandings, and a longer time to resolve issues. Finally, Mr Rawnsley pointed out that outsourcing work to a large company also created the possibility of a different person coming each week to perform the duties usually done by one resident manager. This situation may create security concerns for older residents due to more access keys being in circulation he said.

Damian Quinn

Lawyer John Mahoney, who has spent decades working in the management rights industry, said he has seen bodies corporate who choose outsourcing caretaking struggle.

He said: “You need pool cleaners, unit cleaners, you need gardeners, handymen and so on… There are so many people involved to do the work of one resident manager.

“I’m hearing that many bodies corporate struggle when trying to get everything organised. The resident manager is a one stop shop. If things need to be done immediately there’s usually no waiting time, it gets done straight away.”

One industry expert who spoke to Resort News on the condition of anonymity, said bodies corporate which decided to outsource caretaking work at their buildings often did so not with consideration for price but more so for “control”.

The expert compiles both types of management contracts for schemes on a regular basis and said the difficulty in managing a scheme using separately arranged individual contractors was that there was “a large percentage of administrative and supervisory work.

“That then becomes the responsibility of the committee or requires the engagement of a supervisory contractor to allow for those contracts to be fulfilled,” he said.

“Also, there is a significant impost on the renewing and reviewing of those contracts every three years as there is a legal requirement to redo the

contracts. There is an advertising requirement for contractors and then there is an interviewing process which is built into the exercise as well. So that affects the actual physical cost.”

The expert said an external contractor would often build in “a slightly higher hourly rate calculation” because they haven’t got guaranteed continuity of service and because their contract could be cancelled within whatever the specific terms are of that arrangement.

“So, they allow for a slightly higher service level cost than what would normally be provided to a caretaker,” he said.

“That average percentage varies from the individual contracts. Pool cleaning providers or gardeners will often charge 20 percent above the figure that would normally go to a caretaker. Cleaning contractors could be up to 10 percent higher.”

The expert said when committees chose a facilities management company over management rights it had more to do with control than cost.

He said since committees were voted on every year the people at a complex in charge of outsourced contractors were often not re-elected, meaning that the supervisory arrangement in a body corporate could change every 12 months.

“So often you don’t have continuity of supervision or information gathering as you would have under a normal circumstance with a resident caretaker looking after the property,” he said.

With Queensland’s largest concentration of bodies corporate in Surfers Paradise, the local State Member John-Paul Langbroek said management rights was a “thorny issue” for the area and was being examined during the wide-ranging, longterm review of strata living by the State Government.

Mr Langbroek said it was unlikely, though, that the Labor Government or his opposition would buy into the debate with an election looming in two years as it was not a “first order issue” such as health and the economy. He said one of the considerations over outsourcing work normally performed by a resident manager was that it could raise suspicions with older residents of being “ripped off ” if the caretaking work went to people connected with members of the body corporate.

Meanwhile ARAMA Life Member Barry Turner, from Building Management Consultancy and Services, who has done time and motion studies on more than 1200 buildings in the accommodation field, cites the case of Brisbane’s Cloudland Apartments as one that switched some years ago to management rights from an outsourcing model.

“The body corporate was running the caretaking and it came down to one or two people on the committee having to organise everything,” Mr Turner said.

“Many years ago, my company got called in there because the building had never had management rights and they were hoping to sell the rights. They wanted to paint the

whole complex, so I set up everything for them, they sold the management rights and the money went into the sinking fund to painting that big complex.

“That’s a long time ago and there’s been a couple of buildings like that going back through the years. Committees often have trouble running their own complexes so that’s why some created management rights and sold them to give the responsibilities to a caretaker.”

Mr Turner said outsourcing caretaking work could be much more expensive for a body corporate than management rights and cited a high rise building on the Gold Coast which pays a gardener $70,000 a year for 20 hours of work a week.

“I did another property at Kangaroo Point a few years ago where the manager was outsourcing all the gardening for $55 an hour, while the manager’s contract fees were something like $45 an hour. The individual contractors have much bigger overhead costs as well so it’s their hourly rate that pushes up the costs,” he said.

Mr Turner said supervisory contracts with the manager overseeing cleaners and gardeners were sometimes used in “massive sized buildings” but would only make up less than 5 percent of the more than 1200 buildings he has studied in Australia.

He said only rarely had he encountered buildings where the manager was being paid more for his work than a facilities management company would charge, and the overpaying was only because the contract had been set up with guaranteed increases during a time of high inflation.

“In more than 1200 buildings I’ve consulted on with time and motion studies overpaying would have only occurred about 10 times. So, it’s very rare,” he said.

“In all my time in the industry I’ve not seen a system that would provide better management for these buildings than management rights – so long as they are set up properly and the management caretakers are properly trained.”

Debra Tapiolas

ARAMA REPORT

Success stories are written by long-term agreements

Why? Because those resident managers make continual improvements to a scheme in a way that off-site managers could never achieve.

Owners are happy to give resident managers these top-ups as a reward for their performance.

There are great economic benefits to a scheme that has an onsite manager with a long-term agreement, and there are also benefits you cannot put a price on, the services that resident managers provide for occupants through the improved lived experience. They are priceless.

Resident managers provide the sort of service and care that is simply not possible from outside service contractors.

I know managers, for instance, whose older or infirm residents put them on their medical call list, and these managers are ready to respond to a medical emergency at all hours, day or night. That service is not included in their agreement; however they are only too happy to assist at any time because it is part of their promise to provide the best possible benefits to occupiers that they can.

You simply cannot get that kind of service if you have an off-site property manager who looks after 500 to 600 properties around a suburb.

Resident managers can respond within minutes if there is an emergency.

Community Title Schemes are

better maintained and have better occupants because resident managers scrutinise prospective tenants more carefully. The property is simply managed better by a resident manager with a longterm agreement. That manager is on the spot to have a quiet word in case a tenant is disturbing other residents, whether it be smoking, parking in the wrong spot, making noise, or any of the myriad problems that can arise in a community title scheme.

The resident manager can nip problems in the bud immediately rather than letting them drag out as someone off-site is likely to do.

Friendly and respectful conversations with people in a strata title community and reminders from a manager who is more often than not a neighbour, go a long way to improving social amenity and creating communities within a scheme that are far more neighbourly than if they were being managed remotely.

The presence of a resident manager ensures there are

much fewer neighbourhood disputes in a scheme and far less trips to court for tenancy disputes because those disputes are often solved early and the properties are well maintained.

Resident managers have skin in the game, having purchased the management rights and a lot in the scheme, and are therefore much more motivated than an outside contractor who does not have any investment in the property.

Time and motion studies performed by independent experts, show that on 87 percent of occasions the resident manager is being underpaid for the numerous and constant tasks they perform as caretakers, managers and problem solvers. However, aside from the obvious economic benefits to a scheme, let us consider how some resident managers have improved their properties and enhanced the life of residents and guests in a way only long-term managers could.

took over the Ivory Palms at Noosa eight years ago, lifted the star rating and boosted occupancy by 95 percent. That is a great win for everyone.

Geoff and Tam knew it was a family resort, so after six months they asked the owners to scrap a tennis court and put in a giant jumping pillow because they knew from all their travels that kids just loved them. It was an immediate hit with guests.

Then Geoff and Tam spent every spare cent developing a café at Ivory Palms. They craned in a large wood-fired pizza oven, put in a roof and lighting, and the place became a magnet for families. The lived experience for tenants, guests and unit owners was instantly enhanced.

You do not get that sort of commitment from off-site contractors and property management with no skin in the game. No wonder they won the ARAMA Resident Manager of the Year award that year.

At the Peninsula on Airlie Beach, Paul and Francine Tuddenham, while newcomers to management rights, knew right from the start that they had to focus on great customer service and the cleanliness of the property. They employed terrific cleaners who took pride in whatever they did.

Fran says the secret to success in management and letting rights is treating everyone as welcome guests.

They greet everyone with genuine

The greatest validation for long term agreements in the business of Management and Letting Rights (MLR) is that the vast majority of resident managers are granted top-ups, that is extensions on the term of their MLR agreements.

Geoff Hussin and his wife Tamara

Trevor Rawnsley, CEO, ARAMA

Gavin & Kylie Bartholomew

Karen Nelson (3rd from the left) accepting her ARAMA Resident Manager of the Year Award in 2021

Maree & Ian Smith

smiles and if they know it is a guest’s birthday or some other celebration, they make up a hamper and include a bottle of champagne and a little card.

They buy chocolates too, and their cleaners Kenny and Annie put them on the pillows when they clean the rooms. So many guests reckon the Peninsula is the best place they have stayed at, because of that commitment to service you only get with onsite management who are committed to the scheme for the long-term benefit of all unit owners.

Karen Nelson, at the Lanai Riverside Apartments in Mackay, knew the property would be in for a fair bit of turbulence when COVID arrived two years ago. She sat down with her body corporate and unit owners and worked on solving a looming problem collaboratively.

They needed to keep the doors open so she suggested transitioning a lot of the units from short-term letting into long-term letting with shorter leases. Karen made sure the owners tapped into any government assistance that they could. She contacted all the mainstream corporate clientele, particularly those who had contracts in place and found out what they needed to book safely.

Karen kept all the staff employed in other areas within the complex, knowing that when things returned to normality and borders reopened, she would need a team at the ready and that the property could not afford to lose their experience. No wonder she won Resident Manager of the Year that year.

You do not get that sort of care and service from outside contractors or outside property managers.

Kylie and Gavin Bartholomew, who run Coco Mooloolaba, are very customer service-oriented, and guest focused. They rarely ever say no to guest requests. They maintain resident managers should work hard and put their guests and unit owners first – they go that extra mile.

It is rewarding for them personally, and rewarding for guests, unit owners and the complex. They have really lifted their service levels by going above and beyond. If it is raining and people had a reservation for a restaurant down the street, they drive them down.

Off-site contractors and off-site property managers simply do not do that.

Michael Cross, who with his wife Karen, has run the Gold Coast complex Dorchester on The Beach for eight years, used the COVID downturn to oversee important improvements around the property, and they have been involved with repainting and repairing concrete cancer, upgrading the property’s windows and its fire safety and electrical systems, as well as re-landscaping the gardens.

They take a close interest in everything happening at the Dorchester because, unlike outside contractors and off-site property managers, they have skin in the game as long-term resident managers with a longterm agreement. They know that if they want that agreement extended, they have to work for it and act in the best interests of the scheme at all times.

No wonder they were named “Building Manager of the Year’ at this year’s TOP Awards.

During the recent Queensland floods, Rod Argyle, who has been the General Manager of the Riverside Hotel in Brisbane for five years, had all his team on the spot helping people affected by the rising flood water in a way that an outside contractor or outside property manager simply could not.

When it comes to the way resident managers can improve the community feeling with a strata scheme, just look at the neighbourly vibe promoted by Ian and Maree Smith, from Hidden Grove and Brays on Vista, north of Brisbane who were named as Resident Manager of the year, this year.

They oversee 150 units and have generated a real sense of community in their schemes since taking over in March 2020.

COVID hit them just two or three weeks after they moved in and everyone in the scheme went into hibernation. Even Ian and Maree did not exactly know who was living there. They could not meet any of the tenants and no one came to the office.

So, after the lockdowns in Brisbane ended, they decided to promote a real sense of togetherness. They started a “hidden duck” competition, hiding 250 yellow plastic ducks throughout the gardens and common areas and encouraging kids and adults, renters, and unit owners to run around trying to find them in return for a prize.

That allowed Ian and Maree

to meet many of the tenants in a relaxed atmosphere and listen to any concerns that they had. And the hidden duck competition continues to promote a great sense of camaraderie at those properties.

Ian and Maree are so diligent when it comes to promoting harmony and fun at the units they manage, that at Easter time Ian goes out at night dressed as the Easter Bunny and puts great big rabbit footprints around the place using a template and baby powder.

It is a nice touch from a resident manager who really cares.

You only get that sort of service and commitment from resident managers with a long-term interest in the scheme via long-term agreements.

Time and time again those long-term MLR agreements prove to be in the very best interest of a scheme.

And that is why long-term management rights agreements work so effectively and have proven to be such as succuss through good times and bad for over 50 years.

Paul & Francine Tuddenham

Karen & Michael Cross

Is ownership of a manager’s unit essential?

One of the biggest ‘selling points’ as to why it is beneficial for an Owners Corporation to enter into a 10-year Building Management Agreement with a caretaker/manager is that they are engaging a person who is going to be living onsite on a long-term basis and are therefore readily available to deal with all of the issues and emergencies that crop up from time to time, outside of normal working hours. This is particularly so in the larger complexes.

However, with the substantial rise in real estate values in recent years, we are seeing a consistent push by building managers to want to “unhook” the management unit from the Building Management Agreement. This is primarily driven by the fact that the net return on the total investment in management rights can be significantly reduced because of the high cost of buying the management unit.

Some management rights sale brokers have reported occasions recently where this reduced rate of return has led buyers to look for alternate types of businesses, whilst they chase a better rate of return.

For example, leasehold motels - with no Owners Corporation to deal with, no real estate to purchase, no real estate licence or trust account required, a residence still included onsite and long-term security of tenure.

How best to overcome the problem?

The answer will very much depend on how the

Col Myers, Small Myers Hughes

management rights have been structured in each complex.

If the reception/office area is part of the title to your residential unit (or is an exclusive use allocation att aching to your residential unit) then you have no flexibility, and the unit cannot be severed from the management rights.

In the Sydney area, however, there are many reception/offices established as separate freehold lots. Consequently, designated managers’ residential units are irrelevant to the ongoing operation of the management rights. There are also other complexes where there are no reception/office areas required for the running of the business.

It is these types of complexes where there are some real options available.

Options

Your options are twofold:

• if your Owners Corporation will allow it, sever the management unit completely from the management rights so that the management rights are att ached only to the office lot; or • sever the existing management unit from the management rights but provide that the manager must still reside in the complex.

By doing this, the manager has the flexibility of either buying a cheaper (say) one bedroom unit in the complex or renting a two- or three-bedroom unit.

So, what is the better option?

I remain a firm believer that building managers should reside in the complex they manage. It is difficult to argue that Owners Corporations should engage building managers on long-term agreements if there is not some stand out, positive reason for doing so. That stand out reason is having a building manager living onsite and eff ectively on call 24/7, in the case of an afterhours emergency. This is the ultimate (and unarguable) diff erence between an Owners Corporation engaging a Building Manager versus employing ad hoc tradespersons to handle repairs and maintenance of common property as required.

Severance process

As long as the building manager resides in an onsite unit, ownership of a unit should be irrelevant to the Owners Corporation.

So, what is the process to achieve this?

First, the Building Management Agreement will need to be varied to delete reference to the nominated manager’s residential lot – and substitution of a reference to “any lot

occupied by the manager from time to time”. This variation will require an ordinary (majority) resolution at a general meeting of the Owners Corporation.

Second, a change may also be required to the by-laws - to delete reference to a particular nominated manager’s residential lot and to substitute a reference to “any lot occupied by the manager from time to time”. This change of by-laws will require a special resolution (which can only be passed if no more than 25 percent of the votes, based on unit entitlement, are cast against the motion).

Conclusion

Building managers should consider their options as far as severing expensive residential management units from the management rights documentation and thereby provide flexibility, moving forward.

This flexibility will make a future sale of the management rights more att ractive in the marketplace.

Liability limited by a scheme approved under Professional Standards Legislation

Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.

I remain a firm believer that building managers should reside in the complex they manage

Ratchet straps, culture and safety

The Queensland Government is currently undertaking three reviews into a suite of issues and laws which effect the strata sector. There is the Community Titles Legislation Working Group, which I have previously written about extensively, the review into the Queensland Home Warranty Scheme and now, the Review into the Role of the Property Developer in the Queensland Economy.

Recently, SCA (Qld) weighed in on an incident where all three of these arms of our regulatory framework were likely to come into question. A high-rise building in Broadbeach on the Gold Coast had a large, rusty steel frame held together by ratchet straps, the kind you might use to fix a load of wood to a ute. To describe this as shocking and dangerous is an understatement. The exposure of this horrific incident is a place where two of these three reviews (Developer and Home Warranty) perhaps intersect. The building in question is young and marketed

as luxurious, yet at some point in either its construction or throughout the early maintenance of the building, a tradesman, developer or builder has decided that the use of these straps is appropriate, flying in the face of common sense and virtually every construction law I can think of.

Cost cutting, building defects and the lack of recourse for owners are not new issues in the building sector unfortunately. Hopefully, this incident in being brought to light in the media, coupled with these ongoing reviews may yield action on what is, by my observation, an entrenched cultural and structural problem that has been allowed to fester for too long.

SCA (Qld) will be (and has already been) very active in participating in these reviews. Positive change should be the product of both reviews and as a representative

of consumers in the high-rise construction space we will fight hard to ensure this happens.

What is clear, is that the status quo cannot continue. The push to high density living is an inevitable and ongoing transition, and the more we push this, the bigger an issue building defects and legacy impacts of developers on bodies corporate will become.

Let’s be clear at the outset of this discussion SCA (Qld) always has, and always will be an advocate for high density development and quality developers. But shaping our communities and our cities needs to be about a fair deal for end users, not just extracting the maximum amount of cash out of the public before moving on, with no care or responsibility.

Just like we no longer allow mining without remediation, so we should no longer allow sub-standard developers to deliver a sub-standard legacy from their economic activity.

Developers have a role to construct, project manage and ultimately sell property for a profit. They do not have a right to sell people property that is not fit for purpose, or that doesn’t give them appropriate property rights.

The so called `Cowboy’ era needs to end.

SCA (Qld) will be vocal in our support for quality development and quality developers and support the sector to weed out those that put the sector and consumers at risk.

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Laura Bos, General Manager,

The minimum housing standards

The Housing Legislation Amendment Act 2021 which came into effect on October 20, 2021, has introduced changes to the Residential Tenancies and Rooming Accommodation Act 2008. The changes are being introduced in stages to facilitate a smooth transition and give the sector sufficient time to prepare.

This article focuses on changes in relation to minimum housing standards (MHS) and their impact on those who live, work, and invest in community titles schemes in Queensland. The MHS is set to commence on September 1, 2023, for any new tenancy agreements. For all existing tenancy agreements, the changes will commence on September 1, 2024.

The MHS has been implemented to ensure that all Queensland rental properties meet basic

safety, security, and functionality standards. Although the body corporate legislation has not been amended, we anticipate that these reforms will still impact bodies corporate.

Although the MHS reforms will not commence for some time, we recommend that property managers and owners begin taking steps as soon as possible towards fulfilling their obligations. Prompt action is even more important if an owner is depending on the body corporate to do the maintenance required to meet the MHS for their rental property. For instance, if the cost of the work is more than

Changes in relation to minimum housing standards

(MHS) and their impact

the committee’s spending limit, the owner may need to submit a motion to an annual general meeting (AGM) of their body corporate for a decision. If an owner misses the deadline for submitting their motions to the AGM, more time and effort may be involved in trying to get an extraordinary general meeting called to vote on the motions.

Overlapping responsibilities

From the outset, it should be stressed that body corporate maintenance obligations have not changed. However, bodies corporate may expect an increase in the number of maintenance requests they receive, as several of the obligations placed on owners of rental properties under the new MHS overlap with existing body corporate obligations.

We will highlight a few of the key overlapping responsibilities, with a focus on schemes registered under a building format plan of subdivision (BFP). The amendments are likely to have minimal impact on schemes registered under a standard format plan of subdivision (SFP), as bodies corporate have substantially less responsibility for maintenance under this plan type.

Weatherproof and structurally sound

Owners are required to ensure their rental property is “weatherproof” under the MHS. This means that the roofing and windows should prevent water from entering when it rains. In BFP schemes, the body corporate is normally responsible for maintaining the roofing membrane, as well as windows and doors, and their fittings if they are in a boundary wall separating the lot from common property.

The rental property must also be “structurally sound” under the MHS. Under a BFP, the body corporate is already required to maintain the essential structural elements of the building in a structurally sound condition.

Locks on windows and doors

Under the MHS, the rental property must have functioning locks on all external windows and doors that are accessible from the outside (without using a ladder), to secure the property against unauthorised entry.

As previously mentioned, under a BFP, the body corporate

is normally responsible for maintaining windows, doors, and their “associated fittings”, if they are in a boundary wall between the lot and common property. This means, in specified situations, an owner may approach the body corporate about existing locks or latches on windows or doors that have not been maintained. However, if the locks or latches are owner improvements (for instance, an upgrade or a change made by an owner) it is usually the owner’s responsibility to maintain their own improvements.

Damp and mould

The owner must, under the MHS, ensure that the rental property is free of damp and mould, unless the tenant has caused the damp or mould.

While an owner is normally responsible for maintenance inside the property under a BFP, if there is damp and mould on internal walls and ceiling that has been caused by the body corporate not maintaining the common property in good condition, responsibility for the damp and mould may rest with the body corporate.

Reasonable functionality

Under the MHS, the property must have adequate plumbing and drainage for the relevant number of occupiers and be connected to a water supply service or other infrastructure that supplies suitable drinking water (both hot and cold). The toilet must also be connected to a sewer, septic system, or other waste disposal system.

These requirements may overlap with the body corporate’s obligation to maintain certain utility infrastructure such as pipes or drains. Utility infrastructure that is not within the boundaries of an owner’s lot is generally maintained by the body corporate (unless the utility infrastructure falls within certain exceptions). This means the body corporate may be responsible for maintaining existing connections located outside the boundaries of the rental property, provided they are not owner improvements that the owner is responsible for.

You can read more about utility infrastructure maintenance

for community titles schemes on our website.

Information for owners of rental properties

There is a further obligation on owners under the MHS to ensure that there are privacy coverings for windows in all rooms where there is a reasonable expectation of privacy. Examples of “privacy coverings” include blinds, curtains, tinting and glass frosting.

Changes to the appearance of a lot are normally regulated by the scheme’s by-laws. As by-laws change from body corporate to body corporate, we advise owners to check their body corporate’s by-laws before making any alterations to their rental property, as they may need to seek approval or comply with other requirements about appearance.

Information for bodies corporate

As we have highlighted already, the body corporate does not have any extra obligations with

regards to MHS. Nonetheless, it is advisable that bodies corporate carry out their maintenance responsibilities in a timely manner where practicable. Being proactive is likely to reduce the potential for the body corporate being inundated with requests from owners. Bodies corporate should give themselves enough time to carry out necessary work and to raise funds if the expenses have not been budgeted for.

In addition to maintenance obligations, the legislation also requires the body corporate to act reasonably in anything it does.

Owners and bodies corporate should be working together to comply with the MHS and existing maintenance obligations under the relevant body corporate legislation, thereby avoiding unnecessary disputes. The bottom line for owners and bodies corporate is that the faster you act, the more time there is to negotiate any speedbumps that may pop up unexpectedly along the way.

Q&A

An effective body corporate chairperson puts the building first

By Mandy Clarke, Editor

Well known and wellregarded management rights authority Paul Cooper has worn many hats in this industry.

He is a Founding Director of ABMA and an Independent Review Panel Member.

This month Resort News talked to Paul about his role as the Body Corporate Chairperson of Evolution Apartments in Brisbane, where he has lived since 2010 and where he owns three lots.

What attracted you to the management rights industry?

I have no vested interest, but I saw a need for an independent voice of reason.

Lynda Kypriadakis and I formed ABMA to be exactly that, and it was built to be the “argument stopper”.

ABMA provides an objective standard for a divided industry?

Yes. It brings all sides together from lawyers to bodies corporate to building managers and the ‘forgotten’ lot owners.

Why did you become a body corporate chairperson?

Whatever my role I have always asked myself, what is best for the building? And on that basis, it made sense to bring my experience and skills to the building where I am a lot owner. I have witnessed so much division in this industry over the years, between management rights professionals, lot owners, building managers, associations, bodies corporate, and so on...

And once again, as a lot owner in this building, I saw division between the committee and building managers resulting in too many people arguing. Since stepping into the role of body corporate chairperson it has

been my goal to resolve conflict and create a harmonious working relationship because that is what is best for the building.

Tell me about Evolution Apartments.

It is a well-located management rights apartment building on the river in Brisbane City. There are 170 lots over 36 storeys with a mix of owner/ occupiers and investors.

What is your relationship with the onsite manager?

It is very solid. We have great formal and informal communication, and we share a goal - to do what is best for our building.

How much time do you spend actively carrying out the role of body corporate chairperson?

I meet formally with our building manager fortnightly but spend approximately one hour per day on building related issues.

What changes have you seen over the years?

We now have more owner/ occupiers, and more multiple lot owners. We have virtually no conflict, and a healthy sinking fund.

In this role what have been your biggest challenges?

Making sure everyone is focused on what is best for

the building, and not just in their own self-interest.

What are your biggest achievements in this role?

It has been finding the right balance. That happens when everyone respects each other, taking time to listen to all opinions before acting.

How do you manage conflict within the body corporate?

By aiming to resolve issues before they become conflict! We do this through clear communication and healthy debate, respectful discussion, and we focus on what is best for the building.

Should the position of body corporate chairperson be a paid position, considering responsibility and time commitment factors?

No. Everyone should be prepared to give something back to their community, whether that is a sporting group, a charity, or the building you live in.

Should bodies corporate be able to appoint their own building manager/caretaker on fixed-term contracts?

Anything can be achieved by mutual agreement once the scheme has been established.

What are the benefits of having an onsite manager?

They can respond 24/7 which means they are more likely to control the behaviour of tenants and guests. Also, because they live in the building, they tend to be more selective of tenants and guests.

Importantly, onsite managers are more cost-effective than using outside facility management. They are cheaper, or they get more things done for the same cost.

Have you identified problems with onsite management?

Yes. I’ve found that complacency causes poor onsite management.

Paul Cooper

Adopt a collaborative approach with good faith negotiations and mutual respect

Other common problems are caused by confusion around the ‘schedule of duties’ or stem from an onsite managers being unable or unwilling to do a very basic task, like emptying a pool filter or trimming a hedge.

What sort of support and training do onsite managers need?

Every good onsite manager should be a member of industry body, ARAMA and attend the regular face-to-face and webinar training provided. Of course, they should always complete ARAMA’s Management Rights Induction Training Program.

I would also recommend a subscription to ABMA, following its guidelines outlined in the ABMA Code book. In addition, there are some excellent training programs offered by ABMA trainers and other independent professionals.

And of course, subscribe to Resort News!

Do body corporate managers need training?

Yes. They should be trained to understand the business of Management and Letting Rights (MLR) so they can better support the scheme they manage.

What about body corporate committee members?

Yes, the online training provided by the BCCM Commissioners office should be a minimum requirement for any lot owner who volunteers their time to be on the committee.

Who should provide the training?

ARAMA is ideally positioned to deliver MLR training otherwise you are at risk of receiving a biased view.

What can a body corporate chairperson do about an underperforming building manager?

The first step is to have a meaningful discussion with the building manager about their poor performance and together work out how it can be addressed.

Treat their caretaking service agreement as the job description and hold them accountable if their performance is not in line with their agreement. Importantly you may need to

vary the agreement to ensure that it suits the scheme and contains sufficient specificity.

Take the resident manager with you if you wish to vary the agreement and bargain in good faith. Ultimately it is key to work cooperatively with the building manager to achieve the desired outcome.

Do you have advice for creating good working relationships in a building?

The first step is to have regular, formal meetings between the chairman and building manager to ensure everyone is on the ‘same page’ to achieve what is best for the building. And to adopt a collaborative approach with good faith negotiations and mutual respect.

ARAMA talks about the ‘triangle of management’ between a good resident manager, a good body corporate manager, and a good committee that treats each other with respect and works together to achieve outcomes that are in the best interest of the scheme.

What are your thoughts on the length of MLR contracts?

Long-term agreements equal long-term thinking.

Someone must think and act in the best long-term interests of the building, which should be well maintained for the long life of the building.

The building will never be able to clean or maintain itself so I can’t see any benefit in a short-term agreement.

Will any problems get solved by reducing MLR terms?

No. On the contrary, I think problems will escalate and costs will soar if a scheme only focuses on the next few years and does not take a long-term approach.

What problems can you foresee if terms are reduced?

Cheap building managers with no loyalty to the scheme will just dump and run if things do not suit them. Remember an onsite manager has a significant investment in the long-term capital value of the scheme, therefore is bound to the scheme, and faces a considerable loss if they move on when things get tough.

A main bone of contention seems to be non-performing managers, do you have any thoughts on how to deal with them?

Often, the reasons why a person is underperforming is due to a lack of understanding of their duties, or because they are demotivated by poor treatment by the committee or individual lot owners. If a manager is treated with respect and provided with a motivating workplace you will get the best out of them. What are the most common complaints from owners or residents in a building?

Laundry bins, visitor parking, pets, and not enough understanding of what levies are for.

What are your thoughts on short stays and Airbnb in residential buildings?

It’s all about the impact on others.

Personally, I don’t like it, but I also understand that in a building you have to expect a mix of owner/occupiers, renters, and short-term stays. Most importantly there must be a respectful code of conduct for ALL. And if anyone breaches the law it should become a police matter, not a building issue.

What about smoking and pets?

It is all about the impact on others. I am not a smoker and don’t have a pet, but I do what is best for the building. Our building does have smokers and pets, but we have established rules that we all agree on and enforce.

What are your viewpoints on facility management for the building?

In my opinion, a resident manager specialising in a particular scheme will always outshine a big multinational facility management company. Many of these companies are also overstretched and based interstate or overseas.

What are your thoughts on MLR groups owning multiple management rights and residing off-site?

A resident or onsite manager is a person who manages a residential scheme and responds in a timely fashion to the needs of the scheme. If the resident manager is responsive 24/7, I do not feel it should make a difference whether they live on or off-site.

Following the COVID pandemic many people have continued to work from home, have you experienced this issue in your building and what are your thoughts?

I think it will be the future. I have seen a positive outcome with more people around our building, enjoying the facilities and even working around the pool area.

Multi-dwelling living is a growing trend in Australia, do you have any thoughts on the future of the industry?

It is only going to grow, and we all need to learn how to communicate better - to stop emailing and start talking to each other again!

Do you have anything else you would like to tell our readers?

Living in a community title scheme can be a great thing if everyone respects each other and focus on what is best for you, your neighbour, your building manager, and most importantly the building.

Evolution Apartments in Brisbane

LEGAL EASE The hills not to die on in management rights

In the day-to-day operation of a management rights business there are dozens of potential spot fires that can break out at any given time. That’s not to say they will all happen, most won’t. But if you get just a few sparking at once it is very easy to get frazzled and over-react.

The same problem can occur in any business, including law. Something I keep in mind when the sparks start flying: While I usually cannot control the circumstances, I find myself in, I am always in control of my reaction.

If you are going to choose to die on a management rights or body corporate hill, make sure it is a hill worth dying on. Unfortunately, most clients have chosen to take a stand before they speak to us, which is what brings them to us down the track to try to resolve the resulting mess.

This is a grab-bag of the most common causes of disputes that we see… Interestingly, the cause of a dispute isn’t necessarily the dispute that we get engaged on. What might start as a small issue often gets blown up into something far bigger, perhaps related, but perhaps not.

Now don’t get me wrong. Some of these issues might be worth arguing about collectively, but it would be rarely worth having a dispute over a single one of these.

Expenses

This is really #1 with a bullet. Most management rights agreements include a provision for the manager to pledge the credit of the body corporate or to have a spending limit of some description. This allows the manager to purchase

the little things that keep the scheme running.

That’s fine when it works, but sometimes (particularly under new committees) the committee wants to rein in the spending to understand where the money is going.

As lawyers, we then get engaged to argue the clause of the agreement, and our advice (almost without exception) is not to bother.

Why?

Because there is almost always a deeper issue of control and/ or trust behind the request. Either way, it’s one you need to roll with, and either manage the control issue or re-earn the trust.

At the end of the day, it’s the body corporate’s money you are spending. They are entitled to decide what happens with it, and if you want to argue the point it’s more than likely going to lead to bigger issues.

Corporate governance on the committee

Strata is the land of the committee volunteer. They may well have a professional body corporate manager engaged, but committees don’t have to listen to their body corporate manager or do what they recommend.

So, some definitely go offscript when it comes to proper governance.

An easy example is jobs for mates without declaring conflicts, or even declaring

conflicts knowing that the mate will still get the job.

Is that proper corporate governance? No.

Is it something that affects the value or management of your management rights business? Probably not.

If that’s the case, then let it go.

Because if you don’t let it ride you are going to make a potential enemy of the promoter of the idea on the committee, and you are effectively putting your head above the parapet in relation to everything you do.

Are your business practices squeaky clean and above reproach? They may be, and if so that’s great. But in any business, mistakes happen.

So, if you’re going to pull the trigger on accusations about poor corporate governance at a committee level, expect that same spotlight to be shone your way at some stage.

That’s not my job

I get it. There is a lot going on at any given time, and usually the request to do something that might not be in your contract can be delivered in a less than conciliatory manner, which is particularly the case if it is delivered in writing.

If it’s a small thing that might take five minutes or less, then my usual take would be to look at it as an investment. Will those five minutes be an investment in furthering my relationship with the committee

or the body corporate manager? The answer is usually, yes.

However, these things can be the thin edge of the wedge. If the requests come repeatedly, it might be time to start to rein them in. If they’re because others are disorganised, it might be time to help them get organised.

It is usually better to work within a collaborative framework than respond with, ‘That’s not my job.’

Simply put, that never, ever, goes down well.

The 24-hour rule

There is rarely any request that cannot wait 24 hours for a response. Each of the above situations would not demand an immediate answer, so in each instance perhaps draft what you would like to say but sit on it for 24 hours.

The response you give a day later will likely be very different to the one you write at the time when your blood is boiling.

Context is everything

This article is written in midNovember 2022, which I think is important in context. We are all at the tail-end of a few rough COVID years, and both interest rates and inflation are higher than they have been for the business memory of many. The opportunities for stress in running a business remain for all of us, and also the people we are dealing with.

You always need to bear that in mind.

Frank Higginson, Partner, Hynes Legal

While I usually cannot control the circumstances, I find myself in, I am always in control of my reaction

The annual motel market wrap up of 2022

Well, how quickly 2022 has come and gone!

As always at times everything was hustle and bustle and other times it was quiet and everything in between.

Each year we do a short but direct examination of how the motel and accommodation industry in general performed throughout the past 12 months from a sales market point of view. We ask the question, “how did our predictions play out and did we get it right, or completely wrong this year?”.

Overall, in summary we would have to say that activity in the motel sector has been strong and growing over the course of the year. Occupancy rates have been high, which (to our excitement) has flowed on to increased room tariffs and in many cases a number of tariff increases throughout the year. The increasing of room rates has littered our articles, discussions and reports for decades and to witness regular increases within the industry puts a smile on our faces. As always, some regions performed better than others for differing reasons within the economy. Now let’s breakdown the year. With 2021 finishing quite strong, once the new year rolled over things picked up where they left off. Strong enquiries from genuine funded buyers saw a number of early freehold going concern sales completed,

however overall the first quarter of the year was just a warm up for what was to come. Enquiry levels were solid with genuine buyers looking for opportunities.

A number of motels, resorts and caravan parks were marked ‘Under Contract’. Strangely, a few of these contracts did not reach settlement for reasons generally to do with the buyers. Inspection numbers were increasing and those contracts that did not proceed were reinstated with alternative buyers, who had not reacted quickly enough when originally considering the propositions. The majority of businesses that gained buyer interest were freehold in tenure, with limited numbers of leasehold sales completed. Enquiry volumes were substantially higher for freehold going concerns. A trend that had followed on from 2021.

Moving on from the first quarter of 2022 there was much increased activity throughout the second quarter of the year.

There were a strong number of settlements completed across the board including freehold going concerns and some leasehold tenures.

Inspection numbers continued to be solid and there were increased enquiries for leasehold motels. Where many were having issues gaining finance with non-commercial lending requirements as their impediment, a number of investors were completing contracts by financing the transactions themselves.

Third quarter activity continued to grow but did not result in as many settlements being concluded as the previous hectic quarter. Contrary to the previous year with border closures still an issue at that time, this year those wanting to move to Queensland from the southern states to invest their money into a motel, resort or caravan park were pushing ahead. A wide range of smaller through to large sized accommodation businesses were sought after and although the volume of sales was not as high, there were quite a few larger property transactions completed.

This was a very positive result for the industry and market and gave confidence to those procrastinating that were looking like the kid outside the lolly shop.

The final quarter of 2022 saw a slowing of enquiries, which could be attributed to the lower level of businesses available on the

market. With the strong sales concluded throughout the year and many businesses remaining tightly held due to strong trading performances, this does lead to lower enquiry levels. Having said that, a number of larger sales were concluded, and the end of the year finished off strong. Similar to the end of 2021 last year, a number of these sale transactions saw more than one investor vying for the same business. This results in unsatisfied demand, of which those investors are continuing to look for other accommodation opportunities.

What will be the state of play in 2023? We think things look pretty positive in the industry for the year ahead. With demand for accommodation businesses looking solid and trading data throughout the industry growing, all points to good things happening. Those already involved in the industry are expected to continue to add to the stable. New entrants and first-time owners and operators are eager to get involved on the back of those they know or see, who are already in the accommodation industry enjoying all the benefits it has to offer.

All of us at Queensland Tourism and Hospitality Brokers (QTHB) wish you a happy, safe and prosperous 2023 throughout the accommodation industry.

Well, that was the past, so what comes next?

Andrew Morgan, Queensland Tourism and Hospitality Brokers

BUILDING RELATIONSHIPS

Statutory trust accounts:

Common issues explained

Banking cash

Cash funds must be banked within 24 hours of receipt, and we understand the Office of Fair Trading has selected this as a focus area and will be levying penalties for non-compliance.

For many operators cash receipts are few and far between, which in some cases can make this requirement even more inconvenient. With many bank branches closing their doors, the time to comply with the daily banking requirement is becoming increasingly difficult, particularly where the cash to be banked is minimal.

Whilst it might seem to be a sensible solution to the issue, you absolutely cannot transfer the cash amounts from your business general account to the trust account to ensure the owners’ ledger reflects the cash received within the 24-hour timeframe. If

Lel Parnis, Principal, Holmans

you were to do this, whilst it might seem logical – you’d be in danger of breaching the legislation on two counts, not meeting daily banking requirements AND depositing non-trust monies.

What can you do to ensure you are compliant with minimal interruption to your day?

Encouraging electronic payment is the easiest option, no cash receipts will eliminate the issue altogether.

TIP: Check if your local Australia Post branch offers ‘Bank@Post’ services for your financial institution.

Non-trust monies

The only funds which should be deposited into the trust account should be the income generated from letting units on behalf of the owners. Any income which is not directly generated and held on behalf of owners is deemed ‘non-trust monies’.

There are some non-trust monies which have a direct link to the income held on behalf of owners, such as hire fees charged to guests whereby the income is directly attributable to management and not in any part due to the owner. These non-trust monies can be deposited into the trust account BUT they must not be held in the trust account more than 14 days from date of deposit. This

means that technically operators must complete mid-month draws to ensure no breaches nor potential penalties result.

Any income not directly related to letting units should not be paid into the trust bank account at all, for example fees charged to tenants for gardening services should be paid directly into the business general account.

TIP: Consider having a low fee point of sale terminal linked to your general account to receipt payments for non-trust monies to mitigate risk of penalties and save on administrative time and costs.

NOTE: If making mid-month disbursements, you must ensure you only disburse monies you are entitled to up to that particular date. Further, if you are distributing commission/ trust monies you must also make a mid-month payment to owners for the balance of their rental income.

Feelings are not a weakness they are your superpower

First and foremost, I would like to thank the team at Resort News for allowing me to put pen to paper or fi ngertips to keyboard for yet another year.

From a young woman who failed most subjects at school including English it was a surprise to be given the opportunity to write for this magazine. So to say it has been and continues to be an honour would be very much an understatement - thank you!

It is hard to believe this is the

Kelley Rigby, Managing Director, Letts Rebuild

last article for 2022, so in true Kelley style I thought I would write something a litt le left field.

Growing up I was always told that showing emotions equalled weakness, so throughout my 20’s I rarely let any see me cry or get upset, whether due to personal or professional reasons. Moving forward to my 35th year of life and I am no longer conditioned under this belief, to the contrary my emotions are my superpower. Showing the people around you that a situation makes you upset or has impacted your emotions, displays your empathy, passion, and your willingness to be vulnerable, this in my opinion is a far greater strength to embrace.

Times are changing in the business world, and I am not shy to say I am all for it. Compassion and empathy are two key factors that this once hard and unsympathetic world has accepted.

I hear you ask, what does this have to do with management rights? To be honest - a great deal.

You are working with many diff erent personalities on a daily basis within your business and sometimes encounters are unfortunately not pleasant. Consider these occasions to be the perfect time to step into your superpower and show

Adjustments

You should use caution and seek appropriate advice before using an ‘adjustment’ to balance the accounts when completing end of month reconciliations. At all times, the ledger, cashbook, and bank account should reconcile, and you should be able to clearly explain any adjustment amounts, what they relate to and ensure they are resolved without delay.

Adjustments should not be used as a substitute for investigating and resolving issues that have caused a reconciliation to fail.

Charges to owners

Letting agents are only entitled to charge owners for services as authorised by the signed letting agreements for each unit. Operators should be regularly reviewing, self-auditing if you like, to ensure the charges being applied are in line with those per valid letting appointments.

This is another area we understand the OFT are directing resources to review and we expect penalties to be applied where charges are being applied without authorisation.

Minor errors on your agreements can have significant consequences for an agent.

TIP: Have a ‘spring clean’ and take the opportunity to check everything is set up correctly in your trust account software and that all your letting agreements are correctly completed, signed and the charges line up with those being applied each month.

Items to look out for when reviewing completeness and accuracy of your letting appointments include:

• License details: Where the trust account is held in a company name this should be the corporate licensee details and the registered trading name if applicable.

• Is it a continuing appointment?

• Ensure the agreements are signed!

TIP: If your advertising levies are detailed in Part 8, I’d recommend you liaise with your industry accountant to ensure you are clear on any consequences for you, your owners and potential impact on the net profit from a business valuation perspective.

Receipts

Another easy housekeeping task to add to your Spring Clean to-do list. Check your trust account software is setup to ensure

your ‘trust account receipts’ are correctly displaying the requisite details. Contact your trust account software provider to assist if you’re uncertain how to update.

TIP: If the trust account licensee is a company, the trust account receipts should show the corporate licensee details, not the individual person in charge.

Printing v electronic storage of records

You are required to keep trust account records, including duplicate copies of each receipt issued, for at least five years. The records can be kept in any format provided is complete and legible, in an orderly and accessible way.

Using a cloud-based storage system (separate to your trust account software system) can save you printing and storage costs.

TIP: Ensure you have consistent naming conventions for your files to ensure they are easily accessible for any investigation or audit at any given time.

Like most compliance tasks, the audit of your trust account reporting might not feel like the most important thing on your to-do list when there are owner/ tenant/guest matters to deal with. But putting in place good housekeeping and administrative processes can save in time, cost and headaches which result from non-compliance.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

some big, beautiful emotions. If there is a chairperson or owner that is giving you that sinking feeling in your stomach (we have all been there) why not try approaching them with, empathy and emotion instead of anger and frustration.

I know this sounds hard, and I understand that it may be, but what have you got to lose?

Example time

Mr Smith from unit 10 has been emailing you aggressively for the last few weeks. You see him out in the complex and instead of gett ing hot under the collar, you approach him and ask if he is okay (empathy) then you express your feelings of unease regarding the emails he has been sending.

You might say: “Mr Smith, I understand there are things you need to talk to me about but receiving your emails have made me feel very uneasy and upset. I am working tirelessly to ensure

our community is run well and when I get those emails it really knocked my confidence.”

Then enquire how you can create a better way to

communicate, so he feels he is gett ing his point across and being listened to, and you do not feel att acked. I know (but I hate to believe) that some

people simply enjoy seeing others upset, but I also like to think that nine times out of 10 people tend to apologise and try harder to work with you on a plan moving forward.

All people are diff erent, men and women are diff erent and so unless you are willing to step into your power and be vulnerable the people around you won’t know what makes you feel the way you do.

Finally, after such a busy year for everyone in the industry, if I could give you all a big hug and a personal Merry Christmas wish I would, but writing it here will have to do.

Merry Christmas to you all (my second family). I hope you all have a wonderful time with your family and friends.

2023 is going to be a big year for us all, I can feel it.

Much love and support, Kelley and the Rigby Tribe.

What can you do to ensure you are compliant with minimal interruption to your day?

I have good news…

I’m the first to admit I don’t ‘get’ crypto currency or the trading that seems to underpin the price.

What I do get is that a company called Berkshire Hathaway and a bloke on its board called Warren Buffet have been making mostly sound investment calls for a while now. Mr Buffet has variously called bitcoin “rat poison squared” and stated that he wouldn’t buy all the bitcoin in the world for $25.

So far as I can tell crypto/bitcoin/ whatever is underpinned by a singular value proposition. It’s a proposition as old as time itself… Speculate and hope there’s a bigger mug punter out there

somewhere. It’s kinda like Ponzi but in plain sight. Anyway, last week a crypto exchange (whatever that is) called FTX collapsed. Apparently, it’s one of the largest in the world.

Here’s what the man appointed

to administer the train wreck had to say: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.

“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” John J Ray.

Wow! To paraphrase Winston, never in the field of human investment was so much lost by so many.

The losses will indeed be huge ($8B USD and counting) but there is good news on two fronts.

First, I live in hope that investors of all sorts will learn from this and take a long hard look at opportunities that don’t really do anything or add any value. The digital age will continue to throw up places to put money that will be super high risk and potentially super high return. It’s just another version of a gold rush in which there will be more losers than winners.

Secondly, the whole debacle has given us, without doubt, the best possible name for the architect of this mess. Ladies and gentlemen, I give you Sam Bankman-Fried, now former FTX CEO. To put it bluntly, Sam was the bank man and things are most certainly fried!

Anyway, enough about worthless asset classes. Time for some reflection…

What a funny old year this has been, as we emerge from the pandemic and show the first signs of rekindling our romance with the very people who, to their misfortune, were probably the source of the cursed virus and continue to suffer as a result. In my experience every relationship has its rocky moments, but it’s hard to think that attempting to cover up the introduction of a transmittable bug to a close partner could be easily forgiven. I guess the average Aussie politician must be a lot more understanding than some of my old girlfriends! Mind you, my old girlfriends had

Mike Phipps, Director, Mike Phipps Finance

little to lose by walking away.

In any event it’s comforting to see two world leaders acting like grownups and actually having a conversation, man to man, so to speak. To me it makes no sense to be at odds with a close and very powerful neighbour, so it looks like Albo and Penny are on the right track with this one. Yes, I’m as shocked as you dear readers.

That’s good news item #1. We move on…

I’ve watched events as they unfold in Ukraine with a combination of interest and horror. Such a dreadful conflict initiated by a former KGB agent with designs on reinstating the former USSR can surely be bad news for all mankind. Maybe not. If strategies to punish countries who rely on Russian energy exports result in a rethink of energy security and reliability among EU countries than the suffering of the Ukrainians will not have been in vain. That and the unearthing of a real leader in the true sense of the word. When President Volodymyr Zelenskyy told the yanks he needed ammunition, not a ride, I knew we had the quote of the year. So, a terrible story but maybe, just maybe, with a silver lining.

Which leads me to the mother of all silver linings. Having completely overreacted to COVID our various governments, in total panic and hysteria mode, managed to pump so much money into the system that the outcome was inevitable. From 0.1 percent in November 2020 the RBA Cash Rate today sits at 2.85 percent.

For many, loan repayments have doubled, and household budgets are under pressure as inflation takes its toll. Here’s the thing. It’s easy to be a bit frivolous and woke when money is cheap, and prices aren’t going up. The true beliefs of a large portion of our population will be revealed when it’s a choice between paying the mortgage and keeping the lights on or supporting myriad social and environmental causes. I expect a back-to-basics mindset in the community and political strategies that better reflect real world outcomes. I think having it too good for too long can create a level of hubris that can be dangerous. Those days are over for now and that is, to misquote Paul Keating, the news we

had to have. We can return to vanity projects, waste of public money and virtue signalling sometime down the track.

That’s the positive spin on world events, what’s happening at a local level?

Let me start with domestic business travel, which, let’s face it, got smashed by COVID. Turns out our captains of industry are sick to death of Zoom meetings (can’t blame them) and corporates are travelling and conferencing again. Business travel spending in August hit 92 percent of pre COVID levels with trade fairs, seminars and team building retreats high on the agenda.

Team building. Hmm… When I worked for a certain bank that was code for a bit of alcohol fuelled fun and games. How times have changed.

Comments from business leaders hint at the need to reconnect staff and get back to team orientated organisational structures. I suspect the death of the CBD office is over exaggerated, as is the work from home movement. Just ask the world’s richest man, who I note has ordered the three remaining staff at Twitter back into the office for some, as he puts it, hardcore work.

It gets better. According to figures released by the federal government’s Tourism Research Australia agency domestic tourism spending is up $1.9B on pre-pandemic levels. The increase is most profound in Queensland, up 64 percent with South Australia still doing well off the serial killer market at 51 percent. Of course, the little Aussie battler (dollar) is copping a belting at present so the average punter will no doubt continue to holiday at home while inbound international travel must surely bounce back.

Now here’s the really good news…

© stock.adobe.com

Accommodation assets including management rights and motels are incredibly well placed to weather the storm. Even with higher interest rates money is still relatively cheap and price to earnings ratios in the sector suggest little concern for finance or inflation driven failure. We are seeing virtually no loan impairments (bank speak for arrears) across a very large loan portfolio. Yes, the power bills will be higher, and cleaners won’t be $25 an hour anymore but relative to other industries I predict the accommodation sector to go from strength to strength. Businesses are travelling again, the dollar is inviting for international visitors and leisure travel is safe, relatively predictable and conducted in a safe political environment. Australia is certainly the lucky country and I think our luck will continue. Of course, as my dad might say, the harder you work, the luckier you get.

Finally, what of next year?

Here’s a selection of the likely, the improbable and just plain odd according to Mike:

• Donald Trump will withdraw his presidential nomination and endorse Ron DeSantis. Better the king maker than the has been. Joe Biden, on the other hand, will forget to nominate at all.

• Elon Musk will use Space X to send his cryonically frozen body to Mars where he will continue to use Twitter to abuse and direct his subjects. Net worth will rise exponentially.

• Interest rates will plateau in the second quarter of 2023. Will not hit the predicted

3.25 percent cash rate. No, I am not taking bets!

• Labor’s IR legislation will not make it through in its current form, signalling the early decline of Team Albo. Tony Burke and Chris Bowen will jostle for position in an evil of two lessers contest with Penny Wong emerging unscathed… again.

• Jacinta Arden will not be re-elected as NZ PM, effectively ending the era of the woke yet empty vessel. The election is due by the January 13, 2024, but I’ll bet my house she goes early. The result may well be a bellwether event that will embolden the coalition to get its mojo back. I’m not holding my breath, but miracles do happen.

• The other Jacinta, that is Ms Nampijinpa Price will continue to be a beacon of hope and common sense and if we must have a president, it’s her. Of course, with bandana man and his missus championing the republic course there’s no hope.

• The managing director will continue to tolerate me despite my many failings, pathetic excuses and reckless spending. Is it true that 2023 is the Chinese Year of the Ferrari? If so, I suspect it will also be the year of the homeless finance broker so no chance there.

In closing, thanks to our wonderful team and equally sensational clients and supporters we had a truly cracking year. We settled deals for an aggregate value of over $370M with great support from all our lenders.

Paul Grant, my long-suffering lieutenant ticked over nine years with us and hit $1B dollars in total settlements. Cameron Wicking, off a late call up in 2018, hit $300M in total settlements. I’m unsure what rank to assign to Cam. Maybe Shao wei.

To Simone, Josh, Tayla, Cam and Paul. Well done gang. You are a winning team and a good news story.

Maintaining the fire protection system

Are you keeping the right records?

If you can only get one thing right in your role as caretaker/ building manager, make sure it’s the maintenance of the fire protection system within your complex.

Failure to properly maintain the fire protection system and all associated fire safety installations can bring about a world of hurt for both the caretaking services provider as well as the body corporate. The caretaker has a duty to “coordinate and arrange specialist contractors” for the maintenance of common property, and the body corporate has the responsibility to ensure the functionality of the essential services within the complex, for the full life of the complex.

The fire protection system within your building is part of the essential safety provisions

required under the Building Code of Australia, along with your electrical, plumbing, drainage, lighting and ventilation systems, to name a few. A building approval will not be granted unless the relevant essential services have been included in the design of the building, and once constructed, the occupancy permit issued for your building relies on the ongoing functionality and effectiveness of these originally

approved systems. If they fail, or are turned off/removed, you may not be able to continue to inhabit the building, so ensuring the continuing functionality of the essential services within the building is the number one role of the building manager and committee for the body corporate.

Key word: Maintenance

Maintenance of essential services is mandatory (and well documented within the ABMA Building Management Code©) if you need further explanation/ details). Evidence of having the maintenance done is via records, and failure to produce records of maintenance may have significant repercussions for the body corporate, such as:

• Disciplinary action and infringement penalties issued by the regulator; and

• voided insurance claims

Focussing on the maintenance of the fire protection system is complicated. Most building managers and committees rely heavily on the fire services contractor to keep the building 100 percent compliant, but this is not always the best strategy.

Having routine servicing done on the fire extinguishers, hose reels, alarms, hydrants, and sprinklers is usually taken care of adequately by our fire services contractors, but what about the less obvious and largely misunderstood “other” requirements of the codes and standards that are typically neglected?

I’m talking about:

• Five yearly servicing on the alarm, hydrant and sprinkler systems;

• annual inspections of the passive fire protection and penetration seals;

Why do guests choose to book direct?

It’s no secret that direct bookings are sought after by hotels. They benefit properties by both reducing their cost of acquisition and handing control of the guest experience to the property from the outset.

We’ve looked many times at how a property can increase their opportunity to gain direct bookings, but let’s focus today on why a guest might choose to book direct. Understanding your guests’ reasoning when booking direct affords you the opportunity to win them over with more than just the cheapest rate. Armed with this knowledge, you can do all you

Johnston, Senior Executive, HiRUM Software Solutions

can to make booking direct a more attractive proposition.

You may have heard the adage “People buy from people”. This is somewhat paradoxical in the online world, where we market to reach a wider audience but sometimes lose the opportunity to create a personal relationship.

However, guests may choose to move from the very impersonal booking structure of the OTA’s to booking directly with the property, to afford the opportunity to develop a personal relationship with their hosts right from the outset.

‘The Billboard Effect’ often sees a potential guest discover a property through an OTA, and then search the property’s website to make their booking.

more about the guest’s needs and preferences, assist with local knowledge and suggestions, and offer a tailored experience to suit the guest. In turn your guest gains the best customer experience from their stay.

To develop a personal relationship for a better overall experience

Whether by email, phone calls or in person, the property can personalise their correspondence with the guest. They can learn

Guests now clearly prefer simple booking processes, no fee cancellations, and the ability to make changes to bookings without penalty.

Dealing through OTA’s to vary bookings or make special requests can be challenging. The simplicity of dealing in person with a decision maker when a guest needs to make changes to a booking or make a special

Sylvia

Lynda Kypriadakis, Diverse FMX

So why is it a guest may choose to book direct?

To simplify the cancellation process, and make booking alterations easier

• servicing of the fire system water storage tank(s);

• interface testing; and

• yearly ‘Condition Reports’.

If you understand about all these things and are confident they are all taken care of in your building then go to the top of the class!

If you are not sure what these things mean, then I highly recommend you contact your fire services contractor today and start your education journey so as to make sure your building is covered.

Hints and tips for Class 1a townhouse villa complexes

So, you may be thinking that there is no fire protection system required in a townhouse villa complex (other than domestic smoke alarms and maybe a fire extinguisher at the poolside barbeque area), but the number one fire safety issue in these types of schemes is the party wall fire separation barrier between adjoining units.

Increasingly, building inspectors undertaking pre-purchase property inspection reports on behalf of potential (unit) purchasers are detecting defects

in the party wall separating adjoining lots. Defects in party walls are a serious breach of the fire rating standards for the property and a structural defect for the body corporate to address.

Annual inspections of all passive fire systems (including party walls) are required under AS1851.

Hints and tips for Class 2-9 apartment and office complexes

I don’t think I’ve ever seen a body corporate compliant in terms of inspecting the passive fire systems and penetration seals (ie., fire collars) in these classes of buildings, so there is a high likelihood that your building is currently non-compliant. Passive fire defects are definitely one of the major issues captured in building defect inspections of brand-new buildings (that are still under the builders’ warranty), so if your mature building has never had its penetration seals inspected, now would be a good time to get a quote for the body corporate to approve.

The next favourite noncompliance is interface testing records. If your building has multiple fire safety installations that interface in fire mode, then you need

records of interface testing.

For more details on your sitespecific requirements ask your fire services provider.

Take control through knowledge

If you are the onsite caretaker or building manager and you’re not 100 percent sure on what to do about fire compliance, the best way to ensure the maintenance of your fire protection system is fully up to date is to obtain an education on these facts. If you can answer all these questions about your building (and provided you take the appropriate actions) then you can consider yourself a high performing building manager and someone that your body corporate can trust to ensure compliance:

• What fire safety installations do I have in my building? Make a list.

• What is the mandatory regime of routine servicing required per each installation? Set up a calendar with dates.

• What are the mandatory records I am required to produce as evidence of the maintenance? Do an audit.

• Where are we at with our five yearly’s, 10-yearly’s and so on? Add forecast dates to the calendar.

• What installations do we have onsite that interface in fire mode?

• When were our penetration seals last inspected?

• Under the Building Fire Safety Regulation (QLD) 2008, how long do we have to fix a defect in the fire protection system?

• Are we allowed to have loose mats (trip hazards) in our emergency evacuation escape pathway, including outside apartment doors?

Setting up an asset register and maintenance calendar for all essential services is a fundamental part of the ‘Facilities Management Plan’ for the building and should be one of the first tasks the building manager does when they take over a new building. The second task is to undertake a regulatory compliance audit to ascertain where everything is in terms of maintenance records and compliance.

request, will increase their certainty around booking direct. Likewise, if the prospective guest has the freedom to cancel or change their booking without penalty, they are more likely to choose this option.

If your property still has outdated terms and conditions that penalise guests for cancellations it is important that you look at these and bring them in line with current guest expectations.

To take advantage of a non-monetary offer

Today’s guests look for a great experience as well as a great price. Don’t underestimate the power of providing enticing benefits to those that book direct.

A guest’s perception of a non-monetary add on can often be much higher than the actual cost to the property. For example, supplying a food and beverage voucher for a free bottle of wine with dinner, or

free dessert, will encourage restaurant use and drive further revenue to your business.

Likewise, offering late checkout or early check in can be considered high value by the guest yet be provided at very little expense.

To take advantage of loyalty offers

Loyalty programs for return guests who book direct can offer special rates and value adds via targeted marketing campaigns.

Your loyalty program can offer specific benefits such as free wifi, late check out, or a free happy hour drink each evening. You can also arrange discounted

tours and activities if guests book direct for an additional stay. Return guests will seek out these offers to take advantage of their loyalty benefits.

Overall, to get the best value

Price of course plays a part here. At the property level, your cost of acquisition for the booking is lower, and it makes sense that some of this money saved on commission is passed on to the guest to make booking direct more attractive.

Rate parity precludes reducing the rates on your own website across the board. However, you can offer reduced rates by

marketing to specific audiences, such as return guests in your database, or your social media audiences, with a link taking them to an exclusive offer.

Narrow rate parity clauses applicable in Australia also allow you to offer lower rates providing these rates are not advertised online. In this case, if a guest phones the resort or books in person, they can be offered a lower rate.

In addition, the ‘best value’ also factors in not just the rate, but also all the potential value adds that make booking direct advantageous to the guest.

Understanding the factors that may sway a guest toward a direct booking over booking via an online agent, arms you with the information you need to attract more direct bookings to your property. To increase your profitability and reduce your cost of acquisition it is important that you take these factors into consideration.

Today’s guests look for a great experience as well as a great price

TOURISM

Staffing speed bumps on Queensland’s recovery highway

By Grantlee Kieza, Industry Reporter

Michael and Karen Cross have never been busier at their Gold Coast property Dorchester on the Beach.

And they’ve never attracted such high nightly rates.

It’s a pattern repeated across Queensland as the pent-up demand from two years of COVID has sparked a tourism boom in the Sunshine State. But while tourism numbers have been positive, Michael and Karen are just two of the many operators struggling with staffing issues.

Queensland Tourism Industry Council CEO Brett Fraser said that tourism operators across the state had experienced a bumper year for visitor numbers.

“We’re seeing domestic tourism come to the fore as Queenslanders and interstate visitors take to the roads and sky to explore more of our state,” Mr Fraser said.

“After the challenges of the past few years, the significant rise in visitor numbers and spending has been a welcome relief for our industry.

“But while the big spending and visitor numbers are

a huge positive for our industry, we still face a bumpy road moving forward.

“As we work hard to revitalise our tourism sector, significant workforce shortage is hampering our growth. Operators face the difficulty of managing strict staffing rosters while meeting growing consumer demand.

“Thanks to all the Australians who have visited our great state this past year. We know that our tourism sector is on the road to recovery. But we still have a way to go.”

Michael Cross said staff shortages were a significant bump on the recovery highway at

the Dorchester. “It would appear from the outside that we are absolutely plain sailing with clear air and bolting ahead of the pack, but we are like the proverbial duck – all things appear smooth on the outside, but we are paddling like crazy underneath because of the lack of staff.

“The rental crisis in Queensland means that there is nowhere for potential staff to live and employees can take their pick of work. There’s a finite number of people on the Gold Coast and an infinite number of jobs.

“If someone gives staff a few dollars an hour more they’re gone, and there are an increasingly large number of workers doing that and leaving properties short.

“Our cleaning costs have quickly gone from $95 for a 3-bedroom, 2-bathroom end-of-stay clean to $145, that’s more than a 50 percent increase! It’s obscene what we’re being charged but hopefully the high occupancy rates will continue, and the worker shortage will ease.”

Monthly snapshots from the Australian Trade and Investment Commission show improved domestic travel across the country after a COVIDimpacted 2020 and 2021.

Overnight spend is up on prepandemic levels 38 percent. The increase in spend when compared to July 2019 saw an increased length of overnight trips up 5 percent, increased travel for holiday purposes and increased spending across all major expenditure items, with the largest increases on accommodation, food and drink, petrol and airfares.

In July 2022, Australians made 9.4 million overnight trips and spent 37 million nights away. This was up 2 percent on July 2019. Their spend was up 38 percent ($2.7 billion) to $9.9 billion.

There were strong spend results in almost all states and territories. The highest increases in spend were in Queensland up 65 percent or $1.2 billion and New South Wales up 40 percent or $801 million.

Michael Woodham, from Noosa Tropicana, can vouch for the stirring visitor numbers.

“Business is booming,” Mr Woodham said. “My wife Darrel and I have been here just over a year. Since everything’s been opened and people have been able to travel from overseas, we’re seeing occupancy percentages in the 80’s and 90’s which is great.

Noosa Tropicana

Dorchester on the Beach

“This time last year it may have been running at 50 or 60 percent if lucky.

“Everyone seems busy in the Noosa accommodation sector and it’s not just school holidays. Everyone was full at school holidays, but we were full before the holidays, and we are after them as well.

“Bookings for the next six months are absolutely solid.

“I think everyone will be in a similar vein. Every owner and every on-site manager would be pretty happy at the moment.”

Paulette Bennett and her husband Geoff took over Whitsunday Reflections at Airlie Beach three weeks before COVID, but once the lockdowns ended it’s been “full on” there ever since.

“Our occupancy levels have been very high for the last six months,” Ms Bennett said. “Just before Christmas last year the rush of guests started, and it hasn’t stopped since.”

It’s been the same for Jo Matthews, at the Toscana at Airlie Beach.

“Business is very good,” Ms Matthews said, “the occupancy rates are extremely high and we’re very happy.”

The Australian Trade and Investment Commission says that visitor numbers across the country have almost returned to pre-pandemic levels (down only 3 percent).

Travellers are spending more money on average and taking longer trips. The average spend per trip in July 2022 was up $313 (42 percent) from July 2019 to $1,049.

July 2022 also saw strong results for interstate travel continue.

Overnight trips were down slightly but nights spent away and overnight spend were up on pre-pandemic levels.

Results also significantly improved from July 2021, which was heavily impacted by lockdowns and border restrictions.

In July 2022, Australians took 3.2 million interstate overnight trips. This was up 271 percent on the 862,000 trips recorded in a COVID impacted July 2021

The strongest growth in interstate spend compared to 2019 was in Queensland – up 82 percent or $740 million.

In July 2022, Australians took 6.2 million overnight trips to regional areas and spent $5.7 billion. This was a 66 percent increase in overnight trips compared with July 2021 and a 96 percent increase in spend.

ARAMA CEO Trevor Rawnsley said the Management and Letting Rights industry had survived the pandemic in great shape while so many other businesses in the tourism and accommodation sector, such as restaurants, cafes and travel agents, had floundered.

“This resilient and extraordinary industry has come through the worst economic conditions in Australia’s history,” Mr Rawnsley said.

“Occupancy rates are through the roof and the MLR businesses have never been worth more.”

Toscana at Airlie Beach

Whitsunday Reflections

Dinki-di menu just Bonza

By Grantlee Kieza, Industry Reporter

Low-cost airline Bonza has been waiting to take off for more than a year but at least passengers will be well fed when it takes to the skies.

Bonza announced its launch plans with great flourish in October last year, promising a huge boost for tourism in regional areas and especially around its Sunshine Coast base.

But while it had hoped to start flying early in 2022, Australia’s first new airline in 15 years is still waiting for the green light on its 27 domestic routes.

Still optimism is sky high and Bonza has just released a menu of fair dinkum Aussie treats that will be served on its 737 MAX aircraft given the decidedly dinki-di Aussie nicknames of Shazza, Bazza and Sheila.

The inflight menu with a completely Australian flavour will be provided by 40 producers with a strong showing from Sunshine Coast providores.

Bonza Chief Commercial Officer, Carly Povey, said there would be no more food trolleys but instead food and beverage on demand through the Fly Bonza app.

The new airline, headed by former

Virgin Blue executive Tim Jordan, is set to operate 37 flights into the Sunshine Coast each week on 12 routes that directly connect the region with destinations in Queensland, Victoria and NSW.

“We are working very hard for wheels up,” Bonza’s Chief Commercial Officer Carly Povey told the Channel 9 program A Current Affair.

“The demand has probably never been higher. So now’s the time for Bonza.”

Bonza’s inaugural route is set to be from the Sunshine Coast to the Whitsundays for $59 one way, but the airline is still waiting for the crucial Air Operators Certificate – the approval from the regulatory body, the Civil Aviation Safety Authority (CASA) to take off.

“It’s a lengthy process. It’s a rigorous process and quite rightly,” Ms Povey said.

“When they tell us they’re happy and we’re ready, we’re ready.”

Bonza is hoping to expand its fleet to eight planes within its first 12 months of operation.

The New Daily reports that Bonza is owned by Miami-based private investment firm 777 Partners, which has $US3 billion ($4.6 billion) in assets and owns stakes in 45 companies across aviation, sport, commercial, finance and other sectors.

Back in 2021, the parent company bought a fleet of the new 737 MAX cheaply, giving Bonza costeffective access to the aircraft.

The business model for this sparkling aircraft in their stunning purple livery is to offer routes that Virgin and Qantas are currently not servicing well.

Bonza will focus its business on what it says are under-utilised leisure market routes, offering ultra-low airfares, without features such as frequent flyer programs or lounge access.

Chief executive Tim Jordan said he expects customers to pay $50 for a short route such as Sunshine Coast to Coffs Harbour and between $75 to $100 for longer runs such as Melbourne to the Sunshine Coast.

Sunshine Coast Airport chief executive officer Andrew Brodie told Noosa Today that the partnership with Bonza would benefit the region and the rest of Queensland “by connecting more people to more places, bringing them closer to the moments that matter most.”

“Bonza will directly connect our wider region to 13 destinations, 10 of which have never previously been serviced before, giving residents of Southeast Queensland an opportunity to travel through Sunshine Coast Airport to the rest of Australia.

“We estimate that Bonza will

generate around $86million in visitor expenditure in the region in the first 12 months of flights being operational and bring an additional 772,000 seats to the Sunshine Coast.

“We are experiencing significant demand and are committed to working in partnership with the industry to position Sunshine Coast Airport as the airport of choice by connecting this region with the rest of Australia and at the right time internationally.”

Mr Brodie said 2022 had seen record-breaking passenger numbers – 119 per cent of pre-COVID levels.

He said that with Bonza’s arrival, Sunshine Coast Airport was spearheading the region’s recovery, connecting it with 17 destinations, up from three pre-Covid.

With the 2032 Olympic and Paralympic Games on the horizon, he said the Sunshine Coast Airport had plans to invest up to $1billion in infrastructure to boost the regional economy and jobs growth, creating a legacy for generations to come.

Employment at the airport is expected to mushroom to 1200 jobs from 530. The airport will also support up to 5500 jobs and inject up to $396 million annually to Queensland in the tourism and supply chain industries when development is completed.

Image courtesy of Bonza

Crocodile Hotel adds an extra bite to experiences

By Mandy Clarke, Editor

The accolade recognises not only the hotel’s unique design, but the unique role it plays in Kakadu’s economic and cultural landscape.

because Ginga, the giant crocodile, is a spirit ancestor of the Gagudju people.

The only crocodile-shaped hotel in the world, the hotel’s circular parking areas represent crocodile eggs; the hotel entrance is its gaping jaws with menacing teeth; ventilation units are housed within the crocodile’s slatted yellow eyes, which glow red at night, and the crocodile’s ‘head’ incorporates reception, an expansive marble foyer (a cool green oasis) the Escarpment Restaurant and Bar, function rooms, and the renowned Ochre Aboriginal art gallery.

commercial and tourism hub, with The Croc playing an integral role in Kakadu’s future development.

The hotel is part of the Kakadu Tourism group and is managed by Australia’s largest hotel operator, Accor.

Kakadu Tourism Chair, Rick Allert, praised Group General Manager Chris Chaffe, Mercure Kakadu General Manager Jacinta Koch, and all the Mercure team for the Brolga Award, saying it was a fitting reward for all the work they had done during a highly disrupted period.

the addition of Indigenousdesigned features in bedrooms.

“A major solar installation is planned for the rooftop of the hotel, which will be important for sustainability, while the hotel’s interior gardens have been totally redesigned to focus on sustainable, Indigenous plants.

“Being Indigenous owned, the hotel plays an integral role in employing and supporting Indigenous businesses. We will be expanding the operations of the hotel’s Ochre Art Gallery, with an artist-in-residence program, which also enables guests to have firsthand interaction with local artists.

“We have increased our local Indigenous food and beverage procurement, supporting innovative enterprises such as Kakadu Kitchen and Yibekka Kakadu Tours to give visitors a real taste of Kakadu’s unique Indigenous culture.

Fully Indigenous owned, the Crocodile Hotel was developed by the local Gagudju Association in the 1980s and was pivotal in opening up Kakadu to world tourism, following the spotlight shone on Kakadu National Park by the highly successful Crocodile Dundee film.

The Mercure Kakadu is built as a 250-metre long, 30-metrewide giant crocodile The hotel’s unique design was selected

The Mercure is pivotal to Kakadu’s tourism industry, being the largest hotel in the National Park, capable of hosting large groups, conferences and incentives, families, and business travellers.

Originally, the hotel and the Jabiru township were meant to be bulldozed, with the area returned to its original state following the end of uranium mining in 2021. However, under a new agreement, Jabiru will be fully revitalised as Kakadu’s

“The past two years have been challenging for the whole tourism and hospitality industry, but particularly onerous for outback destinations such as Kakadu,” said Mr Allert.

“Border closures restricted access to both guests and staff, but the team showed great resilience and initiative despite the trying circumstances.

“The hotel has continued to upgrade its product and services, with refurbishment of bathrooms beginning and

“While it is taking longer than hoped for Australia’s international tourism to rebound, research by Tourism Research Australia prior to the pandemic showed that interest in Indigenous tourism experiences has been growing strongly, with a 42 percent increase in overseas and Australian visitors taking part in an Indigenous tourism experience between 2013 and 2019.

“Kakadu is an exceptional destination for visitors who want to experience the world’s oldest continuous living civilisation, and the Mercure looks forward to sharing this remarkable cultural landscape with visitors from around the world.”

The Mercure Kakadu Crocodile Hotel (aka “The Croc”) has taken out the award for “Unique Accommodation” in this year’s Northern Territory Brolga Awards.

The Mercure Kakadu Crocodile Hotel (aka “The Croc”)

Franciele Siscoutto (left) and Jacinta Koch (right) receive Brolga Award for Mercure Kakadu

Kelley Rigby returns to ARAMA

ARAMA is thrilled to announce Kelley Rigby’s appointment as Manager of Membership Services.

Kelley understands every aspect of management and letting rights, customer service, and marketing.

Kelley previously worked at ARAMA before founding Letts

Rebuild in 2020, a management and letting rights consultancy focused on supporting resident managers to build, grow and defend their letting pool.

Kelley’s passion, warmth, and genuine desire to help others succeed makes her a natural at building relationships with members and key stakeholders.

We’re so happy to welcome you back, Kelley!

What about Women In Management?

A few words from Marisa Millane:

“I look back on 2022 with a huge smile, it has been wonderful to witness our industry come back stronger than ever. There are so many highlights from the year, the one that stands out was the Best of Tourism Awards held at the Star Casino, it was humbling to see everyone enjoying themselves and a great opportunity for us all to come together as one and really let their hair down.

“It was also a privilege for us all to fundraise to two amazing charities, The Tara Brown Foundation and Alexa.

“The luncheons have been fun, fabulous, and informative, a huge thank you to our sponsors this year that make this all possible: Resly, Altogether Group, Nuvho, Onsite Manager, Accom Valuers, Hynes Legal, OPAT

and Freedom Internet. These luncheons are for women in the management rights industry, it is a space where women come together enjoy themselves, network, support and learn from each other with a champagne or two in hand.”

What’s in store for 2023?

“There will be nine luncheons in total for 2023 so don’t miss out,

three in each city, Gold Coast, Brisbane, and the Sunshine Coast. The last luncheons of the year are all held on a Friday in November and partners are welcome, dates below.

“Women In will be collaborating with Resly again, we will be holding another Best of Tourism Awards, we have so many great ideas and look forward to another amazing

evening, we are also looking at starting a podcast for the industry covering all things management rights and resorts from interviews to insights, there are so many people we want on this. The banter and laughs are going to be phenomenal.

“I would like to extend a huge Thank you to everyone who has supported Women In, I am incredibly grateful and love this space we have all created.

“Have a wonderful Christmas, enjoy, and laugh a lot, it’s the moments that makes this time of the year so special.”

Luncheons 2023

Brisbane: Fri, Feb 10

Brisbane: Fri, May 12

Brisbane: Fri, Nov 10

Gold Coast: Wed, Mar 8

Gold Coast: Wed, Jun 7

Gold Coast: Fri, Nov 17

Sunshine Coast: Thu, Mar 16

Sunshine Coast: Thu, Jun 15

Sunshine Coast: Fri, Nov 3.

Kelley Rigby

ResortBrokers Movers and Shakers lunch event

Coast Beach Bar & Kitchen, Surfer’s Paradise was a fantastic venue for a delicious lunch hosted by ResortBrokers for over 50 of the most influential people (or Movers and Shakers) in the management rights industry.

The sponsors of the event were all invited to share some valuable insights and give a short update on various topics…

Sharon Flood, Flood Legal Discussed the assignment process and all the fun we are currently having!

Tony Rossiter, Holmans Spoke about advertising income.

Matt Wallbridge, Hospitality & Strata

Talked about wages for verification reports and sales figures.

Trent Pevy, Pevy Lawyers

On ensuring your agreements are up to date and in great order.

Nick Smith, Red10 Finance

Talked about interest rates and where they might be heading.

Mike Phipps, Mike Phipps Finance

Spoke about the lending market trends and financial market overview.

Todd Warner, ResortBrokers Opened with a market update across the Gold Coast

management rights space, he discussed the positive post COVID signs, regarding domestic tourism growth, interstate migration doubling, lowest ever vacancy rates for long stay rentals as well as the development boom that the Gold Coast is experiencing.

He spoke about how all of these factors are fuelling a buoyant market full of optimism and potential for what lies ahead during uncertain times.

He alluded to ResortBrokers coming off a record FY year in 2021/22 with over $375M in total sales being a record for the 35 years that ResortBrokers have been around, since Ian Crooks started his company way back when.

He added that 2023 was already shaping up to be a terrific year of transactions both nationally and especially here on the GC.

Some facts from ResortBrokers:

At ResortBrokers since July 1, we have settled 48 properties in Q1 of 2022 / 2023 to a value of under $100 million dollars in value, agreed 50 deals to value of $85 million and listed and listed 153 properties for the quarter.

At ResortBrokers on the Gold Coast since July 1, we have sold and settled seven properties worth $7.1M on the Gold Coast and has a further 19 properties worth an additional $27.5M under offer/contract. In total this puts our deals on the Gold Coast at 26, worth a total of $34.6M this financial year.

Mike Phipps Finance Christmas function

On Friday 25th November management rights industry professionals and operators caught up at the Mike Phipps Finance annual Gold Coast Xmas function.

The Northcliffe Surf Club hosted the event and as always, the venue and staff were sensational. Rumour has it that a number of participants have decided to take their alcohol-free New Year pledges early after a very big and fun night!

Frank Matus, Paul Grant, Nathan Eades, Nathan Benjamin & Vasa Theodoulou

Stephanie Ashley & Ekaterina Ivandikova

Cameron Wicking, Stephanie Ashley, Mike Phipps, Maree Smith, Simone Kennedy & Josh Haylen

Terri Dillon, Wes Wall & Glenn Howlett

Vasa Theodoulou, Frank Matus, Paul Grant, Nathan Eades & Marissa Von Stieglitz

MANAGEMENT RIGHTS

Gold Coast

Spectrum Apartments Rob & Alicia Ghent Surfers Paradise MRS

Villas on Central CPM CC P/L & Lars Lofgren Labrador RB

Discovery Apartments Emma Nejad Helensvale RB

The Mill 135 Lars & Lisa Lofgren Southport RB Brisbane

Moreton Island Real Estate Sco Ga ney Cowan Cowan RB

Powerhouse Apartments & Terraces Apex Management Services P/L New Farm RB

Distinctive Property Management Ma hew Dubbbelde East Brisbane RB Arbor Park Avalon East P/L Wynnum West RB

Petrie Courts Fly to Property Management P/L Petrie RB

Magnolia Premium Townhouses Fly to Property Management P/L Petrie RB

Sunshine Coast / Wide Bay / Fraser Coast

Sandcastles 1770 Sandcastles 1770 Resort P/L Agnes Water      RMS Northcli e Bre and Suzanne Perkins Maroochydore RMS

Noosa Place                        Daniel and Kirsty Cooke Noosaville RMS

Mirra Chana                       Hotel Rescue P/L Mooloolaba    RMS

The Village                          He Group P/L Sippy Downs      RMS

Central Queensland

Uni-Lodge Rockhampton T Shan Rockhampton CRE Far North Queensland

The Beaches Luxury Apartments Stuart & Leanne Glasco Smithfield CBMR

MOTELS & OTHER

Queensland

Tropical Queenslander Austrana Development P/L Cairns TB

Golden West Motor Inn G&N Management Services P/L Miles TB

Dalby Manor Motor Inn D&D McCarthy Dalby TB

Inglewood Motel H. Nguyen Inglewood TB

Country Roads Motor Inn S & V Hospitality Gayndah TB

Pinnacle Village Holiday Park Mile Tenni Wonga Beach CRE

Gunna Go Caravan Park Verwoerdt Myrtlevale CRE

Comfort Inn Warwick Yusuf and Shainaz Ali Warwick RB

Bramston Beach Motel Phalin P/L Bramston Beach RB

Browns Plains Motor Inn Stuart Hesketh Realty P/L Hillcrest RB

New South Wales

Darling Junction Motor Inn C&I Hazeldene Wentworth TB

Copacabana Shores Guru Dev Resorts P/L Copacabana TB

Halfway Motel

Note: Agent/Broker involved in the sale is listed last.

Agent - KEY: RMS - Resort Management Sales; CBMR - Calvin Bailey Management Rights; CRE - CRE Brokers; MRS - MR Sales; QTHB - Queensland Tourism & Hospitality Brokers; RB - ResortBrokers; RS - Resort Sales; TOTom Offermann; TB - Tourism Brokers; TMR - Think Management Rights; SC - Stratacorp; WCH - Ward Commercial Hotels. * In conjunction

Damian Quinn

Agnes Water

Steeped in tourism and popularity

On the 23rd of May, 1770 a converted British coal carrier renamed the Endeavour landed near the mouth of a large lagoon along the eastern coast of a land the crew called New Holland.

Joseph Banks, a rich young London playboy with big shoulders and a ponytail, wrote in his journal that the tropical vegetation was “a sure mark that we were upon the point of leaving the Southern temperate Zone”.

Banks, described by newspapers of the time as a bed-breaking ladies man, had financed the greatest scientific expedition of the time, and waded through mangroves where big green ants waited in ambush.

He later wrote with wounded hands that when annoyed these ants “revenged themselves ... very sufficiently upon their disturbers, biting sharper than any I have felt in Europe”.

In the mud under the mangrove trees were innumerable oysters, including those that created pearls. Pelicans flocked to the shoals and sand dunes, and Banks carefully studied a bustard, a bird with a long, slightly curved white neck and a black-capped head; the span of its orangebrown wings was impressive. The crewmen shot one weighing eight kilograms, which was cooked for dinner, and Banks declared he had eaten no bird to equal its taste since leaving England more than two years earlier for a voyage of discovery around the world.

The ship’s skipper, a towering Yorkshireman named Lieutenant James Cook – soon to be a captain – named the place Bustard Bay. The town that grew nearby is

called Seventeen Seventy, after the year of the Endeavour’s visit, and next to it is the beautiful and historic settlement of Agnes Water.

The arrival of the Endeavour marked the first time on record that Europeans stepped ashore on the soil of what is now Queensland, although the Meerooni people had lived there for thousands of years.

International border closures saw tourism boom at the town of 1770 and Agnes Water – along what is now called Queensland’s Discovery Coast – and the area is often referred to as the “Byron Bay of the North” because of its spectacular scenery and popularity with visitors. The surrounds are as stunning as they were when Banks

and Cook first laid eyes upon them. The twin towns are also located between two major regional centres, an hour and a half from both Bundaberg and Gladstone.

The Edge on Beaches Resort is situated in a prime location between Agnes Water and 1770 and the Management and Letting Rights are on sale for $2,434,000.

Craig Cornish, from Ray White, says the property is a hidden gem that won’t stay hidden for long. Well-heeled tourists from Brisbane, Gold Coast and the Sunshine Coast flock by car to this idyllic, beachside paradise and given demand along the sublime coastline, prices are expected to boom in the region.

Seventeen Seventy is the closest access point from the mainland to stunning Lady Musgrave Island and the resort benefits strongly from tourism to the island.

Edge on Beaches is 19 years young. It has 57 units with 30 of them – all air conditioned – in the letting pool, and it is just 250 metres to a stunning beach with a private pathway direct from the resort straight to the surf.

The property is returning $446,000 per annum in net operating profit, with a $112,000 per annum salary with CPI annual increases.

There are 23 years left on caretaker and letting agreements, and the current onsite manger has run the resort for the last 9.5 years. There are four swimming pools (two of them heated), and three BBQs. The huge manager’s unit is one of the best in the complex and has three bedrooms and three bathrooms. There is also tropical low maintenance landscaping with a sprinkler system. Local amenities and infrastructure continue to develop. There is an established Foodworks in the local neighbourhood shopping centre, with a new IGA supermarket development underway and a new high school/ Christian college to be completed soon.

Edge on Beaches presents as an ideal opportunity for a husband and wife operation or young family to take over the business. Alternatively a new investor could keep the current onsite manager in place.

“It’s a stunning location,” Mr Cornish said, “the coastline is magnificent, and the property offers a very good business opportunity.”

For more information visit https://listing.accomproperties.com.au/03te3 or contact the agent Craig Cornish on 0414 897 256

The Edge on Beaches Resort

Running couple make hard yards pay off

By Grantlee Kieza, Industry Reporter

Richard and Leith Taylor met at a running club in Singapore, and they’ve now been running fabulous San Marino by the Sea apartments at Marcoola on the Sunshine Coast for five years. They’re finally on a smooth track but had to negotiate plenty of hurdles in the early days of their first foray into management rights.

Richard and Leith have built a strong relationship with their body corporate committee and strata, but it took a lot of hard work, and initially, they felt like they were running in quicksand.

Richard, who comes from Bedford, about 100km north-east of London, has a background as an engineer specialising in farm machinery. Leith, from Brisbane, has a degree in hospitality and has worked in management at five-star resorts. She was one of the people working around

the clock for the opening of the Hyatt Coolum in 1988.

Neither had been involved in management rights before taking over San Marino, and their new venture had plenty of shocks.

“The previous managers had multiple issues with the body corporate and vice versa,” Richard told Resort News. “It was

a bunfight, but Leith and I worked hard at fixing the problems and after a while, it settled down. It’s so important for anyone coming into management rights to make the relationship with the body corporate and the strata managers as strong as possible.

“We took over three days before Christmas in 2017. There

was a lot of trouble between the previous managers and the body corporate.

“We were supposed to have a week’s handover time but instead we got just 15 minutes and then we were on our own.

“The previous strata manager had resigned about six months earlier but we were lucky that

San Marino by the Sea Apartments, Marcoola

Cooper Boes (grounds and maintenance assistant), Richard and Leith Taylor (onsite managers), with Rohan Burke (committee chairperson) and Maree Burke

Les Cole from Sunstate Strata came on board and he has been great to work with. He’s very good at mediating.

“It took about 18 months to straighten everything out with the body corporate but we now have a very good relationship with the chairperson, and we meet once a fortnight for a cup of coffee and go through the budget and what needs to be done.

“We have diversity within the committee, and everything is talked about and discussed fairly.”

San Marino by the Sea provides fully self-contained, spacious and comfortable apartments with stunning ocean or garden views, in a family-friendly location overlooking the azure waters of Marcoola Beach, and just a five-minute drive from the Sunshine Coast airport.

Guests can drift off to sleep to the sound of waves as cool ocean breezes waft over them.

But Richard and Leith, who had a boy and a girl at high school when they took over San Marino, had plenty of

sleepless nights in the early stages of their new business.

“It was very stressful for a long time,” Leith said, “and it was a matter of making everyone realise that to manage the property well, we had to work together. On the committee we were lucky enough to have a mixture of investors and owneroccupiers so there was a balance between making the property look pristine and making a profit.

“It’s important for anyone coming into management rights to have a full real estate licence. The full licence is an important

tool to have, in order to sell any apartments on behalf of the owners and to hopefully help to keep your letting pool safe.

“We’ve had a couple of owners who have asked us to sell their units and we’ve found investors for them.

“Being a member of ARAMA has also been great as they provide advice and direction in regard to suppliers and support businesses that are specific to management rights.”

Richard’s engineering work for the company Massey Ferguson took him to Singapore where

he met Leith at the Hash House Harriers running club.

“We got together and lived in the UK for 11 years then came over to Queensland about 16 years ago,” Richard said.

“One of the last jobs I had with Massey Ferguson was to fix problems in different countries when the local teams couldn’t solve them. By the time I reached that customer, they weren’t the happiest person in the world!

“So, customer service was a big part of my job and I learned to deal with all sorts of people in different situations.”

The couple moved to the Sunshine Coast because Leith had family nearby and thought it a great place to raise their two children.

“We came over to Australia during the GFC,” Richard explained, “it was a tough time and as you get older jobs are harder to get. But I managed to find work in Coolum at two or three management rights places. I cut my teeth with maintenance, gardening, night management, odd jobs, all sorts of things…

“Leith had all her knowledge and skills in accommodation and when this property became available, we thought we’d go for it. We knew there

were problems, but we didn’t know the extent of them.

“We had a great housekeeper, but her hours had been cut and she was limited in what she could do. So, one of our first things was to make cleaning in the building a top priority.

“We divided all the running of the building into modules and worked to get the body corporate onside. Eventually, over time, it dropped into place.

“We spent a lot of money on getting the building right and now we’re getting the market right.”

Leith said they were attracted to the property because of

its great access to the beach and proximity to the Sunshine Coast airport. San Marino had the size and opportunity to encourage their investment and was within their budget.

There are 35 units of two- and three-bedroom configuration, with 20 in the letting pool.

There is a tennis court and saltwater swimming pool, and the fifth floor has a private sun deck. Public transport is at the door.

“We knew this place only had one way to go and that there was a lot of improvement we could make,” Leith said.

“Being so close to the airport is a great asset, particularly during

COVID when people weren’t going overseas. We provide a free shuttle, and the airport is literally only five minutes around the corner. Even with the airport so close, San Marino is still a lovely, quiet place and people who come here love the fact that we’re right on the beach they only have to cross the road at a properly lighted crossing to go to the shops.

“Many people stock up on groceries and don’t leave the apartments for two or three days so that they can really relax and wind down.”

Richard said he and Leith had received great support from ARAMA Life Member

Eric Van Meurs, who runs the neighbouring property, Atlantis.

Eric organised weekly meetings with local resident managers where they could swap ideas and news on their properties or tradespeople they could recommend. Richard and Leith continue that trend.

“Our start in management rights was quite daunting but we got a lot of help from other ARAMA members who had so much experience,” Richard said.

“Now we are repeating the cycle five years later with new people coming into the industry and

it’s nice to be able to pass on our advice at what we call our “Book Club” every Thursday.

“When we started here, Eric told us that the first three months of management rights are the hardest, after six months you get the hang of it, and after a year you start to feel a lot more comfortable.

“We love living here. Our daughter is studying at university for the Air Force now, but she’s coming home soon. Beach cricket is certainly on the menu and it’s a beautiful place to play it.”