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BUILDING MANAGEMENT | ||||||||||
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| "....... independent and equitable recommendations | |||||||||||
| that are fair to both parties." | |||||||||||
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BUILDING MANAGEMENT | ||||||||||
| CONSULTANCY & SERVICES | |||||||||||
| "....... independent and equitable recommendations | |||||||||||
| that are fair to both parties." | |||||||||||
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 Building
Management Consultancy and Services is an independent consulting firm
that specialises in the Management Rights industry. With our consultants
who have had many years experience as Body Corporate Managers, Resident
Mangers and Owners, we are able to approach the issues from both sides
and provide reports and recommendations that are fair to both Owners and Managers/Caretakers. |
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| Specialist Independent Evaluation Services for Body Corporate Salaries | ||
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To prevent a Management or
Caretaking salary falling behind current industry standards, a salary
evaluation should be carried out prior to the setting of a Body Corporate
annual budget, the renewal of an Agreement, the taking up of a
Manager's/Caretaker's Agreement extension option or any change in a Manager's
or Caretaker's agreed duties and responsibilities.
Our review service provides a
full written and comprehensive evaluation of a Manager's or Caretaker's
day-to-day duties and responsibilities together with a recommendation of a
suitable level of remuneration to cover the conducting of those services. Our evaluation review services cover these essential points:
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| Calculation and Recommendations for Suitable Management fees | ||
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The question is asked as to
why a Manager's/Caretaker's salary needs to be reviewed when a contract
has been signed by both parties accepting the terms and conditions of the
contract for the given duration of the agreement. There are a number
of issues that can have a bearing on the remuneration during the life of
the contract.
The Management Rights industry is a contract based business with an annual remuneration paid to the contractor in return for services provided. This fee is reviewed each year and in most cases is readjusted in line with the Consumer Price Index (CPI). The CPI is the most widely accepted formula used for annual reviews of contracts, whether they be Management Agreements, Building Contracts, Rental Agreements or any other contracts with escalation clauses.
A resident Manager/Caretaker is a self-employed person running his own business and is bound by the same commercial requirements as any other business or company, such as business registrations, taxation compliance, public risk and professional indemnity insurance, etc. Increases in the cost of running a commercial operation are not necessarily tied to the CPI as we have seen in recent times with the massive increases in insurance premiums. It is not hard to see why the salary in a contract that has been in place for an extended period of time, and is based on CPI increases, can fall behind industry standards if regular reviews are not carried out, when CPI is a measure of "household expenditure". The addition of, or changes
to, facilities at a complex such as heating a pool to extend the swimming
season, adding a barbecue or the growth of hedges etc can add to a
manager's agreed duties. Remember that fifteen minutes a day of
extra duties can add up to $2,000.00 per year to a salary. The commencement salary at a complex is usually set the the developer but until the complex is operation, it is not always possible to assess the times and duties necessary to run and maintain the complex. This is why the changes to the legislation now allow for a review of the salary within the first three years of operation. I the salary is set too high, the owners are burdened with higher than necessary Body Corporate levies. If the salary is too low, the Manager/Caretaker is disadvantaged and often finds difficulty in maintaining the complex to the standard required. |
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| On-Site Building Inspections and Consultancy | ||
 To carry out a fair and
independent assessment of the remuneration necessary to operate and
maintain a complex, we carry out a thorough inspection of the complex to
view and evaluate the on-site duties and responsibilities as are detailed
in the Body Corporate's current Management Agreement. This involves
spending several hours at the complex during which time we photograph all
areas of responsibility, interview and discuss with the current
Manager/Caretaker the times necessary to carry out the stated duties on a
daily, weekly, monthly and six monthly basis and compare these times to
the averages of similar complexes. It is from this information that
we are able to calculate and recommend a suitable management fee for
carrying out the Body Corporate's required day-to-day complex management
and caretaking duties and responsibilities.
Remember that no two complexes are the same an no two management agreements are the same. It is for this reason that a salary cannot be based on the average of salaries paid at other similar complexes. Our on-site inspection is not to assess the performance of the current Manager/Caretaker but to assess the times and duties necessary to maintain the complex by any competent person who may be contracted either now or in the future to administer all of the day-to-day duties and responsibilities necessary to meet the expectations of the Body Corporate and its owners. The performance of the current Manager/Caretaker is an issue between the Body Corporate and the incumbent and is not part of our review. We are there to assess the job - not the Manager/Caretaker. |
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| Building Management Reports | ||
| Our review service provides a full written and comprehensive evaluation report of the Resident Manager's/Caretaker's day-to-day duties and responsibilities at the particular complex and includes the provision of a recommended suitable level of remuneration to cover the management and/or caretaking services as are being conducted at the establishment. At no stage does our review or recommendations include any duties or responsibilities pertaining to the letting agreement or any other business activities that may be conducted at the complex. | ||
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The Australian Bureau of
Statistics describes the CPI as "a fixed weighted price index that
relates to household expenditure on retail goods and services and other
items such as housing, government charges and consumer credit
charges". The CPI is based on 8 expenditure groups (food;
clothing; housing; household equipment and operation; transportation;
tobacco and alcoholic drinks; health and personal care; and recreation and
education). The scope of the CPI is capital city households where
the members of the households are employees who obtain at least 75% of
their income from wages and salaries. The top 10% of households,
based on income, are excluded.