Many developers and owners have long realised that there are benefits in hiring an on-site manager. This manager’s duties include, among other tasks, running the operations of the complex and providing a renting service for absentee owners.
The developers offer the management rights to a company that handles properties for sale in Brisbane. This concept had evolved sometime back and has been formalised by the government regulation, as well. The legislation has helped to safeguard the corporate bodies involved, the unit owners, the managers and the tenants.
Conditions to set up a right to manage (RTM) company
Industry veteran resortbrokers.com.au explains that there are certain stipulations that have to be met before a property management company can be formed. Some of the important ones include:
A stipulated minimum number of leaseholders should be required to be willing to take part.
At least two-thirds of the flat owners should have long-term lease at the time of issue.
At least half the owners should be willing to go through the process.
More than 74 % of the floor area of the property should be residential, and not commercial.
How does it work?
The RTM company has to complete a long legal process before it actually applies to buy the right to manage. Once the company has been formed as per the existing regulations, then as a company, they can apply and acquire the right to manage.
It is only after this that the process of transferring the management functions starts. The following normally fall under their responsibilities.
Services and repairs
Improvements and maintenance
Insurance and property tax issues
Tenant management and rent collection
Advertising when the units are vacant
Running background checks on potential tenants
Following all the government regulations and laws dealing with fair rental practices
This company will be paid for the services rendered in the form of a regular income. Additionally, it has the right to earn a commission as stipulated in the contract.
Apart from the right to manage, the company purchases the manager’s unit within the complex, as well. This unit is used by the company and the property manager to run the business. Thus, it is in the company’s own interest to manage the property successfully, so that the unit is not devalued.