Management rights assignments
Management rights agreements are usually relatively long term engagements. It is very common for them to be regularly assigned from one resident manager to another. It is almost unheard of for a single resident manager to stay in place for the entire tenure of a management rights agreement.
The body corporate is always a party to these management rights agreements and it is a statutory requirement that the body corporate’s consent be obtained to any assignment of a resident manager’s interest in them.
A body corporate cannot unreasonably withhold consent to the assignment of a management rights agreement, but that does not necessarily mean it has to say ‘yes‘. A body corporate is well and truly entitled to understand the capabilities of the buyer and go through a formal assignment process.
We act for many bodies corporate in matters of this nature and because of our management rights expertise, we understand what needs to happen.
In any management rights assignment there is a ‘legal’ and a ‘commercial’ element. The legal element is always within our domain. We need to review all of the paperwork to make sure it is appropriate for the body corporate to enter into. We also need to advise the body corporate about its rights.
The commercial element is something that we can also be engaged with respect to. This extends to providing specifically tailored questions to be asked of the proposed resident manager along with confirmation that all of the criteria required by the buyer under the Body Corporate and Community Management Act 1997 and the management rights agreements have been met.
We have acted in hundreds of assignments and know exactly what should happen when.You can rely on us to give you the right advice.