Spring Hill, trends in Brisbane property

Onsite managers not always so "super"

apartmentsAs apartment projects get bigger it’s become more common for a resident manager to be appointed and, for better or worse, this person becomes the human face of the building. There are a number of exceptionally good operators, some in larger buildings where they take a professional team approach, and often in smaller schemes where those with great people skills really shine. But across the board we hear a lot of comment from apartment owners that their resident managers are grumpy, cost a fortune and aren’t up to the job. So it mightn’t be any surprise developers are thinking twice and, in some cases, it seems new developments in Brisbane’s inner city will no longer have an onsite manager.

Usually sold their management rights by the developer, resident managers are paid an annual income to clean and maintain all of the common property, and are granted the exclusive right to operate a letting business from the lobby or other common area. (Many promote the myth that they’re the only agents able to manage rentals in the building, but unless the apartment is part of a lease-back or other managed investment this is simply not true.) Most pay a handsome sum for these rights and receive a 25 year term contract that makes them very hard to sack. Caretaking fees are usually around $1000 per apartment per year, so when the walkways are muddy and the pool’s not cleaned residents are quick to find fault. And we think rightly so.

Some resident managers seem to believe they’re de facto presidents of tiny sovereign states, plastering lobby noticeboards with random rules, obstructing tenants who rent through other agents and treating owners as second rate citizens. In a most extreme case a Spring Hill manager recently told an investor he’d leave her apartment vacant for two months if she appointed another agency. This same person, paid a salary by the body corporate of hundreds of thousands of dollars, abused another owner’s agent at the top of his voice in the building’s lobby, telling them if they came back he’d “rip your f..ing head off”.

Apartment owners pay onsite managers’ wages out of their own pockets and, regardless of how much that manager might have paid a developer, are entitled to expect excellent service. In the USA they’re known as the superintendent or ‘super’, and at the high end buildings across the world employ a concierge and even doormen. And of course it comes at a cost.

The Australian model seems sound while resident managers deliver the goods. But with body corporate fees under pressure from rising costs, owners of apartments (and especially buyers of new ones), will reconsider their options if there’s no assurance of good service.