A Quick Primer on Management Rights: Everything You Need to Know

Posted on by Max Altizer

A Quick Primer on Management RightsYou’ve probably heard the term “Management Rights Business.” It might have even popped up while you and your friends were talking about setting up, say, a hotel or motel. But, what exactly does “Management Rights” mean?

Management Rights businesses involve the operation and management of a property under the ownership of a body corporate by a contracted third party. Usually, this involves operating service and accommodation businesses, such as owning a freehold going concern motel or the lease of a motel or hotel.

Managing Rights vs Operating a Leased Motel

Management Rights, unlike operating a motel for lease, involves no payment of a rental fee. Instead, the manager receives regular compensation from the body corporate to run the property. Under this arrangement, the body corporate pays for all repairs, too.

In terms of letting, the manager and owner share all the rental income received, splitting it based on their internal agreement. The owner pays the rates and utilities and also takes care of cleaning expenses, marketing costs, and all other expenses that are accounted for.

Running a Management Rights Business

The terms and conditions of such an agreement, while following a standard procedure, may vary in their quirks and little specifications depending on the industry and the internal agreement between the owner and the third party. Management Rights available for sale are treated as an asset that can be bought and sold.

Business owners or employees of the owner who take a more hands-on approach to the business run the Management Rights business directly. Whoever acts as the manager performs caretaker duties for the property in accordance with the stipulations of the body corporate. Also, he must make himself available to assist the other members of the body corporate. This involves the payment of an agreed renumeration.

There are so many Management Rights for sale in Australia, especially Brisbane. Anyone seeking to venture into that line of work should start by checking out online ads and establishing connections.

About the Author

Max is a Senior Marketing Consultant at a marketing firm in Los Angeles. He authored several articles for some marketing journals.