Renewing a Management Rights Agreement
A Management Rights Agreement (MRA) will be negotiated over a fixed period; for instance five to ten years. When nearing the end of the MRA, the agreement holders will usually renew the contract for a further fixed period. This is of course reliant on the manager completing to a satisfactory standard the contracted duties outlined in the agreement.
Essentially if you are not meeting the needs of the client (or on the rare occasion that the client will be looking to cost cut); you may find yourself losing the contract to another tender. To avoid this scenario it is recommended that Management Rights Businesses adhere to the following:
- Self-promotion – Ensure the owners are aware of you and what positive work you are doing within their premises.
- Relationships – Try to form positive relationships with owners and be open and ready to listen to their concerns.
- Communication – Advise owners what work you undertaking, what issues you have solved and your planned improvements. Ideally this can be done through correspondence such as a newsletter.
- Complaints – It is essential that you remedy complaints as soon as possible. You may find that more than one owner has had the same concern. Again ensure you communicate the solution in your correspondence.
- Keep a thorough diary of interaction with owners – especially decisions made. Write down the logic behind your decisions clearly.
- Every contract has different by-laws so ensure you are familiar with these; use an experienced Solicitor if you are in doubt.
If you follow the above mentioned list you will likely have a good reputation with the owners. When business is doing well then it is further recommended you approach the Body Corporate for an extension on the Management Rights contract. Ideally this could be done two to three years prior to the cessation of the contract. This way you can plan your business ahead and ensure further tenure.
Alert Property Group welcomes any questions surrounding Management Rights; don’t hesitate to contact us if you have a query.