{"id":4712,"date":"2025-03-06T22:49:10","date_gmt":"2025-03-06T12:49:10","guid":{"rendered":"https:\/\/theonsitemanager.com.au\/news\/?p=4712"},"modified":"2025-03-06T22:49:11","modified_gmt":"2025-03-06T12:49:11","slug":"whose-who-in-the-zoo-the-3-ws-of-management-rights","status":"publish","type":"post","link":"https:\/\/theonsitemanager.com.au\/news\/whose-who-in-the-zoo-the-3-ws-of-management-rights\/","title":{"rendered":"Whose Who in the Zoo \u2013 The 3 Ws of Management Rights"},"content":{"rendered":"\n<p>Unlike other conveyancing transactions, management rights matters have more parties than people realise and can often cause confusion about:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Who is who<\/strong><\/li>\n\n\n\n<li><strong>Who can talk to who<\/strong><\/li>\n\n\n\n<li><strong>Why certain people cannot talk to others<\/strong><\/li>\n<\/ol>\n\n\n\n<p>It is a pretty important paradigm to understand and one that is often misunderstood, even by experienced advisers.<\/p>\n\n\n\n<p>Let\u2019s take a look\u2026<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>1. Who is who?<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>(a) The Seller<\/strong><\/h3>\n\n\n\n<p>This can either be a <strong>developer<\/strong> (if buying off the plan) or the <strong>owner of a business<\/strong>.<\/p>\n\n\n\n<p>Where there is a unit associated with the business, depending on how the agreements are structured, there may be:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>One seller<\/strong> (the same entity owns both the unit and the business), or<\/li>\n\n\n\n<li><strong>Two sellers<\/strong> (one owns the business, the other owns the unit).<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>(b) Selling Agent\/Broker<\/strong><\/h3>\n\n\n\n<p>This is the <strong>licensed real estate agent<\/strong> appointed by the seller to sell their business.<\/p>\n\n\n\n<p>There are agents that specialise in selling management rights. It is important for a seller to use a management rights agent, as there are particular matters the agent must be aware of when selling these businesses.<\/p>\n\n\n\n<p>Just like a real estate agent selling a house, the selling agent works to achieve the best outcome for the seller.<\/p>\n\n\n\n<p>Previously, agents prepared sale contracts, but changes in legislation now require that <strong>only a seller\u2019s solicitor<\/strong> can write contract conditions.<\/p>\n\n\n\n<p>The <strong>agent\/broker&#8217;s role<\/strong> includes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sometimes holding the <strong>deposit<\/strong><\/li>\n\n\n\n<li>Following up on the <strong>balance deposit payment<\/strong><\/li>\n\n\n\n<li>Assisting in selling management rights businesses, especially in <strong>difficult transactions<\/strong><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>(c) Seller\u2019s Experts<\/strong><\/h3>\n\n\n\n<p>These include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Seller\u2019s Accountant<\/strong> \u2013 Prepares financial statements (P&amp;Ls), calculates sale price, and communicates with the buyer\u2019s accountant.<\/li>\n\n\n\n<li><strong>Seller\u2019s Financier<\/strong> \u2013 Holds security over the business and unit and releases these interests upon settlement. Also holds original agreements, which must be handed over at settlement.<\/li>\n\n\n\n<li><strong>Seller\u2019s Solicitor<\/strong> \u2013 Handles contract preparation, negotiations, legal obligations, and attends settlement.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>(d) Buyer<\/strong><\/h3>\n\n\n\n<p>This is the person or company purchasing the business (and unit, if applicable).<\/p>\n\n\n\n<p>Depending on the structure of the agreement, the buyer\u2019s entity may be the same for both the business and unit, or they may be separate.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>(e) Buyer\u2019s Representatives<\/strong><\/h3>\n\n\n\n<p>These include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Buyer\u2019s Accountant<\/strong> \u2013 Verifies income, reviews P&amp;Ls, and checks letting appointments. They are the only representative that physically inspects business records.<\/li>\n\n\n\n<li><strong>Buyer\u2019s Financier<\/strong> \u2013 Assists with funding. Choosing an experienced financier is critical for management rights acquisitions.<\/li>\n\n\n\n<li><strong>Buyer\u2019s Solicitor<\/strong> \u2013 Handles contract negotiations, legal due diligence, liaises with accountants and financiers, advises on legal obligations, and prepares for body corporate consent and settlement.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>(f) The Body Corporate<\/strong><\/h3>\n\n\n\n<p>Several parties are involved on the body corporate side:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Body Corporate Manager<\/strong> \u2013 The strata manager assisting with scheme administration. First point of contact for the seller&#8217;s formal request for assignment consent.<\/li>\n\n\n\n<li><strong>The Committee<\/strong> \u2013 Volunteers representing the body corporate. Generally responsible for granting assignment consent.<\/li>\n\n\n\n<li><strong>Body Corporate\u2019s Solicitor<\/strong> \u2013 In most cases, the body corporate hires its own solicitor to guide the committee through the consent process.<\/li>\n\n\n\n<li><strong>Independent Experts<\/strong> \u2013 Committees are becoming more aware of their responsibilities and may hire independent consultants to interview the buyer and provide recommendations.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>(g) Franchised and\/or Leased Businesses<\/strong><\/h3>\n\n\n\n<p>Additional complexity arises if the business is part of a <strong>franchise<\/strong> or operates from a <strong>leased property<\/strong>, adding another layer of advisers.<\/p>\n\n\n\n<p>For simplicity, this article focuses on the <strong>standard<\/strong> parties in a management rights sale.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>2. Who can talk to who?<\/strong><\/h2>\n\n\n\n<p>There is a misconception about who is entitled to information and who can contact different advisers. If a party refuses to speak with you, there is usually a valid reason.<\/p>\n\n\n\n<p>Ask yourself these questions:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Whose adviser\/party are you trying to speak with?<\/strong><\/li>\n\n\n\n<li><strong>Did you engage them?<\/strong><\/li>\n\n\n\n<li><strong>Are you paying them for their advice?<\/strong><\/li>\n<\/ul>\n\n\n\n<p>The answers will clarify whether you have the \u201cright\u201d to talk with them.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>3. Why certain parties cannot communicate with others<\/strong><\/h2>\n\n\n\n<p>Simply put: <strong>because they do not act for you!<\/strong><\/p>\n\n\n\n<p>Over the years, when acting for a buyer or seller, we have been contacted by <strong>committee members, the seller\/buyer directly, and the seller\u2019s agents<\/strong>, but we have had to refuse discussions.<\/p>\n\n\n\n<p>This is <strong>not<\/strong> because of any personal issues, but because:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A client may have specifically instructed us <strong>not<\/strong> to speak with a certain party.<\/li>\n\n\n\n<li>We are <strong>ethically bound<\/strong> not to communicate with them.<\/li>\n<\/ul>\n\n\n\n<p>Solicitors must follow strict ethical rules when representing a client. Failing to comply with these rules can lead to <strong>serious consequences<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>HOW CAN QUARTZ LEGAL QLD HELP?<\/strong><\/h2>\n\n\n\n<p>If you have any questions, please reach out to us at <strong><a>info@quartzlegal.com.au<\/a><\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlike other conveyancing transactions, management rights matters have more parties than people realise and can often cause confusion about: It is a pretty important paradigm to understand and one that is often misunderstood, even by experienced advisers. Let\u2019s take a look\u2026 1. Who is who? (a) The Seller This can either be a developer (if buying off the plan) or the owner of a business. Where there is a unit associated with the business, depending on how the agreements are structured, there may be: (b) Selling Agent\/Broker This is the licensed real estate agent appointed by the seller to sell their business. There are agents<a class=\"more-link\" href=\"https:\/\/theonsitemanager.com.au\/news\/whose-who-in-the-zoo-the-3-ws-of-management-rights\/\">Read More &rarr;<\/a><\/p>\n","protected":false},"author":1287,"featured_media":4713,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_mbp_gutenberg_autopost":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["entry","post","publish","author-janetheonsitemanager-com-au","post-4712","format-standard","has-post-thumbnail","category-legal"],"_links":{"self":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/4712","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/users\/1287"}],"replies":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/comments?post=4712"}],"version-history":[{"count":1,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/4712\/revisions"}],"predecessor-version":[{"id":4714,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/4712\/revisions\/4714"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media\/4713"}],"wp:attachment":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media?parent=4712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/categories?post=4712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/tags?post=4712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}