Can you pool your letting income?
In the overwhelming majority of cases, it is not illegal for a management rights business to pool letting income. There are certain exemptions to this rule however these are very specific and usually don't concern most businesses.
If you wish to pool letting income you must have the permission of the owners (this can be all of the, a select group or an individual) in the letting pool. Once established via gaining the owner/s consent the letting pool is usually administered in the following manner:
The resident manager will ensure that the particulars of the letting arrangement are set out in the Form 20a and in the business product disclosure statement if relevant. They will then have a trust set up; and all rent received from the owners will be deposited into the manager’s letting pool. The manager will then be tasked with ensuring that all charges, expenses and commissions are taken care of for the letting pool. At the end of the schedule period (usually a month) the resident manager will then distribute the balance held in the trust to the owners in the letting pool.
It is up to the individual on whether they join a letting pool and take advantage of the commonality of the building, or whether they choose to manage their affairs in their own way.
If you require further information about letting pools regarding management rights business; contact us at Alert Property Group.