Like any kind of industry, management rights will also change and evolve over time. The most recent and biggest modifications are probably regarding the sales procedure of management rights itself. In the past, they usually settled and prepared contracts basing on financial verification that takes 14 days and legal due diligence lasting for 21 days. They also base it on finance with a 28-day duration, body corporate approval before settlement and settlement taking around 45 days.
Sellers back then could already purchase flights and hotels for their holiday getaway during the signing of contracts or the next day after the settlement of dues. However, it is virtually impossible for sellers to finish any transaction within 45 days with the recently modified rules. Queensland, for one, reveals two huge changes that affected their sales.
The Modified Rules of the Committee
Solicitors say that Body Corporate Committees do not have to do rubber stamp assignments anymore. This means that they have the right to refuse anybody brought by the seller. They can be more cautious now by diving deeper into the finances, character and work history of buyers.
The past transactions never really did ask for any business plans and police reports, which is the reason for the change. Committees now have the freedom to prepare prearranged inquiries about what the buyer can offer leading to lengthy and thorough interviews.
The Decision of the Gallery Vie
Another recent alteration that caused a huge effect on the industry is the Gallery Vie decision. This involves the management rights financiers discovering that their default “step-in” rights were not as strong as they believed. At the same time, banks became more restrained in assisting the management rights industry with the lending process.
Nevertheless, every bank has different perceptions with the said decision. Some just require simple changes in the wording of the documents, while others need extra paperwork. If you want to thrive in this new venture, you have to keep yourself posted on the continually changing and ever evolving management rights industry.