ARAMA Press Release October 2022

Truth, Transparency and Disclosure – our best weapons against fake news

An attack on term is an attack on the entire Management & Letting Rights Industry!

The management and letting rights industry is locked in a war in which we are being attacked by the deadly weapons of exaggeration, misinformation, lack of disclosure, hidden agendas, corporate greed a need to exert power over other people and fake news.

A tiny vocal minority is making a lot of noise trying to persuade the Queensland Government to cut the term of a Management & Letting Rights agreement from 25 years to 3, or 5 or 10 depending on who you listen to and at the same time they are also trying to ban short-term letting in Class 2 apartment buildings.

With these constant attacks on the MLR industry, it has never been more important for resident managers to not only do a great job, but to market themselves within their complex – to let everyone know of the great work they are doing.

The long-term value of management and letting rights faces a concerted attack from the opponents of long-term agreements.

If successful, the knockers will wreck the businesses of thousands of mum and dad investors, and destroy Queensland’s tourism industry and they do not seem to care. The attack on term will see the death of a true mum and dad business and place thousands of small business operators at huge financial peril.

Long term MLR agreements are in the best Interests of the scheme because they save lot owners money for the general upkeep of the common area and deliver a better residential amenity via a more careful selection of tenants more responsive service delivery and better management of guest’s behaviour.

ARAMA knows this because we deal in facts and not fantasy. On almost every occasion when the remuneration paid for a long term caretaking service agreement by an onsite manager focussed just on that single scheme is independently tested against an outside service provider they find the on site manager is grossly under paid. And despite the misinformation being peddled by the knockers, most Resident Managers will trade off all or part of their deserved remuneration Increase against an increase in term or a change in duties which more closely matches the needs of the scheme.  

And we can prove that – the facts do not lie.

Long term agreements equal long-term thinking.

Someone needs to take a long-term view and act In the best Interests of the scheme and not simply gouge their way to profit over 1 – 3 years.

Conversely short-term agreements equal short term thinking and will result in increased costs for lot owners which the knockers seem to conveniently overlook.

It’s no surprise that the knockers cannot produce any Independently tested evidence to prove that reducing the term of a caretaking service agreement magically reduces the costs to lot owners ….. because It Is simply not true.

ARAMA also knows that the vast majority of lot owners approve of long-term agreements because on the majority of occasions (85%) they keep getting topped up – yes, willingly, and via secret ballot too.

The knockers who really do wish to put their power over other people will argue and try to mislead you into thinking that lot owners are being bullied and controlled into voting yes for a top up or an extension.

Voting for a top up or extension or other major variation is not compulsory and is done in secret. No surprise that the knockers cannot produce any evidence to support these claims of bullying or voter harassment because It Is simply not true.

The management rights industry has been under attack for 30 years, and that’s why ARAMA was initially formed. We are a not for profit membership service organisation and advocacy group who banded together in the early `90s to help Government create better property laws that were In the best Interests of the scheme and its lot owners.

Every 5 to 10 years Government reviews its laws to make sure that they are fit for purpose. The MLR Industry has seen law reviews take place in 1992, 1997, 2002, 2008, 2014, 2020 and again now.

But this time it is different. There is a concerted and co-ordinated attack on the MLR industry by groups and individuals who have a hidden agenda, are opposed to long term agreements and therefore the MLR industry and who stand to make a huge commercial windfall from the demise of the MLR industry if they succeed.

A study conducted by Resort Brokers recently estimated the total value of Australian MLR businesses at $4.8billion, spread across 3679 schemes, with 250,652 lots. The MLR industry employs 33,000 people looking after $120billion in assets under management. All of this Is now at risk.

We know that there are large interstate based commercial facility management companies waiting in the wings who for years have been very keen to demolish the MLR Industry In Queensland so that they can make a huge commercial gain… but, they know they just cant compete with modern on site management with long term agreements.  So, they have found a few stooges who will disguise themselves as organisations acting in the best interests of lot owners to do their bidding.

If term is reduced they will very quickly jack up the costs just like they have In Sydney and Melbourne. Lot owners will pay higher levies and have no independent cost comparison (like there is now) to measure the true value of the caretaking service.

MLR Is now threatened by this tiny vocal minority who are proclaiming that long-term agreements are not in the best interests of a scheme, when clearly they are. And they have no facts to support their argument – just more arguments !

We have reams of statistics and data to prove that long-term agreements work much better than short-term arrangements. They reduce costs, they increase value, and they create a better community and better rental returns for lot owners.

Leading the fight against the MLR Industry are a couple of small but noisy mobs – and they are mobs who exaggerate their own importance and claim to be speaking on behalf of their members – which they do not.

We know that every MLR Operator In this fascinating Industry Is behind ARAMA and supportive of our stance regarding long term agreements.

You have to ask why the knockers are pushing to wreck long-term agreements. I see two main reasons.

One is that some people and some corporations stand to make a commercial gain from the reduction of term by picking up the facility management in that scheme.

The second reason is that it gives some of the unit owners who sometimes push their way onto a committee and hijack it’s agenda (a very small but noisy number) a chance to push their power agenda and feed their appetite for control over others.

Some of these people want to exert their power and influence over a scheme and they don’t care who they run over In the process. When you have a resident manager with a long-term agreement in the way they feel that their power is threatened and they will willingly spend other peoples money to advance their negative and destructive agenda.

These people are often enabled by a small but crafty group of lawyers.

Those who oppose long-term agreements can provide no factual evidence that a reduction in term would benefit a scheme. In fact it’s been proved again and again that the opposite is true.

No one has produced any real facts to support their argument that reducing term is in the best interests of the scheme. So now Its time to put up or shut up. Show us the evidence or let us all live (and work) In a peaceful and harmonious scheme.

The UOAQ currently have an e-petition before the Queensland Government which in our opinion Is somewhat misleading. They are busy conducting surveys and creating whatever opinion pieces they can to support their argument to reduce term but they cannot show any facts that would support it – because there are no facts to support their claims.

ARAMA has the facts to support our assertion that a reduction in term will result in an increase In levies.

Is that what the majority of unit owners in Queensland want? No, we don’t think so but this is what will happen if the UOAQ gets its own way.

The UOAQ is also trying to outlaw short-term letting in Class 2 buildings which is where the majority of MLR businesses operate. They cite unproven claims about compromised fire safety and grab hold of any old argument that might strengthen their point.

Banning short-term letting In Class 2 buildings would decimate the tourist accommodation industry in Queensland now and in the leadup to the 2032 Olympics. It would also put an end to the very popular pastime of a unit owner being able to obtain a good rental return on investment on a lot owners holiday unit when they are not staying in it themselves.

Is that what the majority of unit owners in Queensland want? No, we don’t think so but this is what will happen if the UOAQ gets its own way.

Unit owners need to understand that those who are promoting these attacks on the MLR Industry are really self-harming because it is supposed to represent unit owner-investors as well as unit owner-occupiers.

And what about Airbnb? If Airbnb is a problem in your scheme then MLR is the solution. Just ask the unit owners in Sydney, Melbourne and elsewhere who are overrun by Airbnb and other outside agencies. 

The knockers of short-term letting in class 2 buildings are trying to convince the Queensland Government to force people with investment units to move into them full-time, rent them out full time or leave them locked up. That would be a horrible outcome for the people of Queensland which Is after all a state which thrives on and generates a huge economic benefit from tourism.

These ideas have already been tested in different courts around the country and failed.

But the knockers of MLR use very emotive, even hysterical, language to continually try to sway public opinion and the Government. They are now saying that using Class 2 buildings as short-term accommodation is unsafe and that there will be another Grenfell disaster, that another building will just erupt in fire like it did in London. That’s a horrible, horrible analogy and so misleading.

Thankfully, the vast majority of unit owners in Queensland do not agree with their views.

The truth is that the vast majority of unit owners like long-term agreements. It’s obvious. Top-ups and extensions – which are part of the management rights model – have been agreed to on 85 per cent of occasions. That’s clear evidence that unit owners acknowledge that Resident Managers are doing a good job and want to extend the length of their term.

We continue to ask ARAMA members to do the very best job they can and to market their business and show everyone that the business model of management and letting rights is in the best interests of their scheme.

We encourage all resident managers and unit owners who want to deal in facts to undertake a time and motion study completed by an independent expert to prove conclusively that the work the onsite manager does would cost far more if outsourced to separate companies.

In the last several years there have been hundreds of these reviews completed and 87 per cent of them showed that the on-site manager was in fact being underpaid, sometimes by as much as 40 per cent.

If the knockers get their way a Resident Manager won’t be able to extend the agreement for good performance and for saving a scheme hundreds of thousands of dollars.

That’s a shocking outcome.

In order to counter the attack on term, we need more people to join ARAMA as soon as possible. We are fighting for our industry’s future and we need the safety and strength of numbers. We also need all our existing members to promote ARAMA to those resident managers yet to join our association.

ARAMA is now calling upon every person or corporation directly involved as an operator, or service provider to the MLR industry to join ARAMA and encourage others to do so. This is your call to action so that ARAMA can be properly resourced to expand its research and continue to fight for the industry that you have committed your time, money and energy in.

This article was contributed by ARAMA.

You can find more information at: https://www.arama.com.au/