Is the Management Rights Model Changing?

25 June 09

I had a really interesting meeting recently with the owner and key people from a large development company based in Sydney. This company primarily develops high rise strata buildings in excess of 150 units and incorporates management rights into these complexes. In the last couple of years, this company has elected to hold onto its management rights rather than sell them. I was keen to find out why they had changed their model.

They felt that moving forward, the ideal building manager for these complexes was not your “mum and dad” style operator but more someone who had the ability to be a real “facilities” manager. In other words, someone who had a reasonable degree of background and training in mechanical engineering or at least someone who understood the basics concepts of building machinery such as lifts, air-conditioning cooling towers, garbage chutes, fire equipment, etc.

Now don’t get me wrong, they were not expecting that this person would be able to attend to the physical repair and maintenance of mechanical equipment and machinery within a building. They simply felt that this person should be reasonably skilled in technical knowledge and functioning of the building mechanical and electrical equipment. They felt that if building managers had these skills, they would be better equipped to locate the source of any problems and be better equipped to liaise with the specialists contractors and help solve building problems quicker and more cost effectively.

They believe that a building manager with these skills will provide excellent value to an Owners Corporation and would substantially assist the Owners Corporation in understanding the issues and reducing cost. These managers would also need to have a fair understanding of the legal issues relating to occupational health and safety issues that crop up from time to time in the building and prepare OH&S procedures and reports for the benefit of the executive committee. They would generally assist the committee by guiding them through the maze of Federal, State and Local Government Regulations and By-Laws that govern the day to day life in these buildings.

So where do you find people with these skills?

Does it mean that the next generation of caretaker managers for these big city high rise buildings will no longer will be found from the traditional mum and dad ranks? Does it mean that the business brokers will have to go to the universities or technical colleges to find building managers with these skills and when they find them they still have to learn skills related to residential or short term letting?

I don’t have the answer but it’s certainly an interesting concept – a concept that I hadn’t really thought of before.


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