28 May 2020
Words
Nathan Eades
The body corporate consent process - why our deals don't fall over
One of the hottest topics in the management rights sector at the moment is assignment to consent of your agreements. Now that's the body corporate giving you permission to sell your caretaking and letting agreements and selling them to somebody else. We've noticed in the last, maybe 18 months, that body corporates and some body corporate solicitors have become a lot more stringent in allowing, particularly, first time and foreign buyers into the marketplace.
This isn't necessarily a bad thing because it does ensure that the quality of managers that are within our industry is increasing, therefore lifting the whole level of the industry.
However, if you're selling your property and you've already been through due diligence, you've had your verification, had finance approved, and you get to the consent stage and our buyer is rejected by the body corporate, then obviously everyone's wasted a lot of time and a lot of money.
So, some of the good brokers around the place, in Brisbane especially, saw the writing on the wall probably around 18 months ago and consent doesn't need to be high risk. Basically, by addressing the fundamentals, particularly around qualifications and the ability of those managers early in the process, then we feel that it really de-risked that proposition.
So, if you’re going to sell your management rights, the first question you should be asking your broker is, "What steps are they taking to ensure that the buyers they present to you are ready for consent and will be approved by your body corporate?".
If they don't have a fairly rigorous answer and address those fundamentals, then they're probably not the right broker in the current marketplace.
By way of explanation, when we work on the buyer’s side of the deal we’re also getting on the front foot early to make sure they’re going to sail through the body corporate consent stage.
The reason for this? Right from day one when a buyer speaks with us and begins the process of starting a new business, we guide them through the whole process and what they need to do to impress a body corporate. We make sure that by the time they approach the body corporate, they have no choice but to give approval and welcome them aboard.
I'd love the opportunity to come and see you and discuss what we're doing. The Brisbane team at ResortBrokers have only had one consent rejected in the last 18 months. And it wasn't to a first time buyer or a foreign buyer. It was completely unrelated to these things.
We'd love the opportunity to come and talk to you about body corporate consent. It shouldn't be a risky process. If your broker is doing the right things upfront, then you should have no problems at all. And we look forward to seeing you settle your property and either move to retirement or move on to your next one.
Nathan Eades
0448 339 920
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