Are the experts always right? An MR expert's opinion
Now all the restrictions are lifted for Covid what does this mean for the Management Rights industry?
All it means is we can do our jobs easier and with less restrictions. What a relief! In other news, banks are taking their time. I had a chat with a leading banker recently at an industry forum and his opinion was…
“Why don’t you guys have a 60-day finance clause (as does all other commercial transactions) and let it be from that date, as all the date restrictions you put in are irrelevant for us. All we want is a sign off from the lawyer and accountant valuers etc with enough time for us to do our thing (3 weeks).
This would eliminate all the extensions that seem to plague our industry.” It is, in my humble opinion, irrelevant what the industry specialist suggests, as the banks will tell them what they want. They have the gold, so they make the rules!
Another thing that has now snuck in is claw back on all MR Contracts. I have mixed views on this, but the golden rule in MR has always been you can only sell what you own. So, to this extent we should have claw back. What then happens if the vendor gains a rental? Should the buyer pay more? Historically this has not happened. The problem with this, is that the bank may then have to loan more than they originally thought they were going to.
(See the full article here: https://issuu.com/multimediaau/docs/rn309-may_2022)
On other matters, there are still certain lawyers charging outrageous costs for BC work for vendors. The vast majority of lawyers charge reasonable fees, but a small group are gouging vendors. Make sure you talk to your BC managers and ensure they get three quotes.
Next is the issue of no qualifications required for BC managers. Everyone else in MR must have some sort of qualification.
Why do they not have to? This means anyone can become a BC manager tomorrow. Then there is the BC committee. Again, no expertise required (not even the BCC course) and they control a BC budget that can run into the millions.
Last but not least, be it I am not a lawyer, accountant or valuer (I only have a business degree), but I don’t understand the requirement for two schemes. I have a huge problem with the unfairness of a 10-year scheme in so many ways. I am told by the experts that it is what it is!
There are plenty of buyers, not enough listings, multipliers are still high (some would say too high) so all the same. If you are a seller now is a great time as interest rates are going to go up so with that multipliers are bound to start coming down.
- Robert Collins, Director of MR Sales
RAAS Property Group