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Management Rights Understanding Language/Terms

When looking at Management Rights you will need to understand most of the commonly used terms by the Management Rights industry.

Here is a list of some common phrases you may encounter and a brief reference.

 

Salary or Remuneration

Body Corporate Salary/Remuneration

Income the manager receives for completing the duties described under the caretaking agreement with the body corporate (Caretaking Contact)

 

Net Profit                        Before tax business income adjusted for sale purpose, which has allowances for industry add backs.

 

Agreements Caretaking and Letting Agreements you engage with the BodyCorporate.

 

Caretakers Duties           Jobs you are required to do as part of your responsibility as the Caretaker, these are outlined in the Caretaking Agreement.

 

On Title                           If the office is On Title means you own the freehold to the office, as opposed to an exclusive Use area.

 

Letter of Offer / Offer & Acceptance Used to negotiate the sale price plus terms and conditions to appear in the sale contract.

 

Contracts Drafted by the Agent/Solicitor to industry standard, usually approved by the buyers and sellers solicitors prior to signing.

 

Verification (Sometimes called) Finance Due Diligence Financial Verification of the business figures, this is done only after we have a signed contract, done by the buyer’s specialist management rights accountant.

 

Due Diligence                 Legal Due Diligence of the Caretaking & Letting agreements and body corporate records is done by the buyer’s specialist management rights solicitor.

 

Body Corporate Consists of a group of owners from the complex but managed by a separate company known as the Body Corporate Managers

 

Committee Approval      

 

The last step of a buyer’s contract is when the incoming manager is approved by the committee at meeting. Also refers to committee voting on any issue raised by members including the manager, most commonly done at a meeting.

 

Unconditional Contract  

 

The stage during the contract period when the key conditions of Financial Verification, Legal Due Diligence and Finance Approval have been satisfied.