The management rights industry in New South Wales has tended to be overshadowed by the Queensland model over the years but this is no longer the case. In fact, NSW offers some extremely inviting benefits over its northern rival as will be outlined in this feature.

Having stated this, however, it is more crucial to drive home the point that the management rights industry in New South Wales is very different and anyone venturing into an investment here needs to secure very specialist professional advice – the rules are different, the circumstances are different and the professionals are different. You don’t even have a body corporate – it is an owners’ corporation!

Without doubt there are some professionals – lawyers, accountants, brokers, bankers, financiers and the like – that are just as au fait with the particular peculiarities of both markets and, often, these are the better option as they fully understand the intricacies of NSW management rights compared with that of Queensland.

Licences and agreements are tricky, financing under NSW’s Strata Schemes Management Act is not as flexible as it could be for lenders - deeds of consent are usually needed between financiers and borrowers, even the multiplier value setting fixture in Queensland is not relevant here.

But there are real value opportunities in NSW. Just one seemingly insignificant item is that no stamp duty is payable on the management rights component – the goodwill. While Queensland’s multiplier makes valuations a little easier (perhaps), individual market price as practiced in NSW can be a far more accurate means of determining the worth of a management rights business.

However, management agreements in NSW can be tricky indeed. Amendments to the NSW law passed in 2002 that came into force on 10 February 2003, introduced special provisions relating to a caretaker. These have been sorely tested in law courts and, as recently as 31 July 2009, justice McCallum in the Supreme Court of NSW gave judgment in a long running dispute between the owners’ corporation for a complex and the MR owners, regarding a management agreement that seemed to contradict earlier court decisions.

This is not a negative but merely showing that the legal process in terms of the management rights industry in New South Wales is still growing and further emphasises the need to use professional advisors that really do know what they are dealing with.

Support groups in Queensland have evolved into a major influencing force over time but those in NSW –the Institute of Strata Title Managers, ARAMA NSW and the Real Estate Institute – are still trying to exert some muscle in the area of the management rights industry in New South Wales, but this will come. Already there are indications that legislators are taking notice of these influences.

But the real key factor in the management rights industry in New South Wales is the opportunities. Bargains are there to be acquired and very real money-making opportunities abound without the high ticket costs that traditionally surface in Queensland. But, while these opportunities are available now, the values of these businesses are being realised and capitalised on. Within a few years, the bargains of Coffs Harbour and the Tweed will be equal to those on the Sunshine Coast and TNQ.

It is a buyer’s market at this time but it will not stay that way for much longer.

To download the full Tips for Management Rights in NSW in a PDF version click here