Management Rights on tourism property are increasingly becoming established as an excellent business opportunity in New Zealand.The concept is well established overseas and is well known in Australia particularly in regions such as the Gold and Sunshine coasts where there is considerable development in the accommodation property sector. This development of managed property has in the main been in high rise apartments suited for tourism accommodation where each apartment is sold on separate title to investor owners.

Because of legal and regulatory requirements the form and structure of Management Rights in New Zealand vary from the model used overseas, and there will be some variation from property to property even within the industry here.

Generally there are three parties involved:

• The Owner - owns an individual unit / apartment on the site.
• The Body Corporate - collectively elected by the Owners to establish the overall rules and policy that apply for all Owners in respect to the maintenance and management of the property.
• The Manager - appointed by the Body Corporate and owner of the Management Rights.

Some units on site will be purchased by investors who wish to retain them for private use, however generally managed properties are in tourist areas and cities and have been purchased either as an investment property, or for limited private use.

The rights provide the Manager with responsibility for the successful promotion and sale of accommodation on site to the travelling public and tourists. Typically body corporate rules dictate that owners must utilise the management services of the appointed Manager if they wish to derive income from renting out their apartment. In these circumstances there will be legal agreements between all three parties that protects the interest of each, viz.

• An agreement between Owners and the Body Corporate.
• An agreement between Body Corporate and Manager.
• An agreement between Manager and individual Owners.

Terms and conditions will vary from property to property however in general Management Rights provide for an agreed split on revenues earned from accommodation sales, and the Manager will be entitled to recover some expenses from Owners for items such as housekeeping and maintenance. Actual property costs such as rates and refurbishing usually remain with the Owner and Managers may retain rights to insist on upgrades within Owners property.

The purchase of Management Rights will typically involve both the purchase of the Rights and one of the on-site freehold apartments to be used as managers accommodation, yet offer an excellent financial return on investment for hard working and efficient management.

With the increasing development of managed apartment properties, particularly in areas of high land value such as Queenstown, Wanaka, Tauranga / Mount Maunganui and the major cities, Management Rights will increasingly become a popular form of business opportunity in tourism.