Tips For Selling Your Management Rights

Here are some helpful tips when it comes time to sell your Management Rights. This “To Do” list ensures rational and structured planning prior to listing day. To print out a handy copy of this list click this link: Management Rights To Do List.

To Do

Notes

Done

Engage a Management Rights Specialist Accountant to conduct a Verification of your business income and expenses.
Consider getting independent advice from a Management Rights Valuer on the Managers Real Estate and/or the Business.
If needed get your Caretaking and Letting Agreements topped up.  If you’re under a Standard Module (10 year maximum terms) ensure they are at 10 years.
Review your PAMD Form 20a documents.

  • Check for all signatures from Landlords
  • Check for your signature as Agent
  • Check for the ticked assignment ability

Ensure all PAMD forms are of a recent version ie as long as it contains the assignment clause, currently Clause 4.4.

Ideally you will have all historical Vendor/Purchaser transfer documents.

  • At worst ensure that you have the one reflecting the transfer to yourself.

Provide any and all Deeds of Variation to your Caretaking and Letting Agreements.

Create your own Investment Report and Documents Package, containing all relevant documents, certificates of titles, Agreements, Community Management Statements, Verification Report, Survey Plans etc.  In conjunction with your Agent, make it neat, factual, with pictures of the complex and have copies on hand for yourself and your Agent.

  • This document should contain a story about your business, for example:  Green Hedge is now 6 years old, contains a total of 95 one, two and three bedroom apartments with 65 in the letting pool.  All pooled units are let on a permanent/holiday/corporate basis under General Tenancy Agreements.
  • You should include your Verification Report and summarise the numbers in your pre-amble.
  • When it comes right down to it, it is you who will sit and train the new Manager(s) at hand over, so your Investment Report serves as the basis of what you are selling AND handing over.
Ensure that your software records are up to date and that all active landlords and properties are exactly that, Active.
Ensure that you have all historical documents including past tenants and landlord papers ready to handover.
Create a daily, weekly, monthly (etc) duties list for the incoming manager.
Pass on your list of suppliers and contractors.
If you have WIP, Projects or any issues or whatever, reduce it to paper, so it can’t be said, “you didn’t tell me that”.
Sort out a planned/structured introduction of the new manager to the landlords, tenants and the Committee.
Create a printed list of unit types, in the building and within the letting pool.
Your software (eg Console) should be able to record the units that are managed by outside agents.
If yours is a holiday complex and you have wholesaler agreements in place, ensure those are to hand and form part of your Investment Report.
Provide an up to date Occupancy Report ready for the last 6, 12 and 24 months.
Provide an Average Length of Stay Report, if not included within the Occupancy Report.
Have staff employment agreements, job descriptions, current pay structures and their contact details ready.
Encourage the new Manager to continue your practice of monthly newsletters.
Providing copies of your Trust Account and Audit Reports shows the Potential Purchaser that you’ve been doing the right thing.

I hope this rather long list helps make the transaction smooth and as pain free as possible.

All the best in your sale.

Greg Jorgensen
Director

This article is Copyright @2012 Australian Valuers