IDEAS home Printed from https://ideas.repec.org/a/sae/envira/v48y2016i9p1829-1847.html
   My bibliography  Save this article

Principal–agent problems in multi-unit developments: The impact of developer actions on the on-going management of strata titled properties

Author

Listed:
  • Hazel Easthope
  • Bill Randolph

Abstract

This paper demonstrates the impact the actions of developers during the design and build phases of multi-unit residential developments can have on the quality and effectiveness of the on-going management of developments. The findings presented are drawn from a large research project that included interviews and surveys with property owners, executive committee (body corporate) members, strata (property) managers, and peak body representatives about the management of strata schemes in the state of New South Wales in Australia. A total of 1550 people were consulted. The actions of developers in the set-up of multi-unit developments (including build quality, design, allocation of unit entitlements, and levy setting) can have an important impact on the quality of buildings, the financial viability of schemes in the short-to-medium term, the balance of power between owners, the effectiveness of management and the nature and incidence of disputes. The paper concludes with a discussion of opportunities for integrating long-term management considerations into decision-making in the design and build phase to ensure management costs and costs to those using the property are minimized. The research will be of interest to those involved with property developments in international jurisdictions that have similar multi-unit ownership and management structures and in jurisdictions considering the introduction of similar forms of multi-unit ownership.

Suggested Citation

  • Hazel Easthope & Bill Randolph, 2016. "Principal–agent problems in multi-unit developments: The impact of developer actions on the on-going management of strata titled properties," Environment and Planning A, , vol. 48(9), pages 1829-1847, September.
    • Handle: RePEc:sae:envira:v:48:y:2016:i:9:p:1829-1847
    DOI: 10.1177/0308518X16650894
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0308518X16650894
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0308518X16650894?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Grossman, Sanford J & Hart, Oliver D, 1983. "An Analysis of the Principal-Agent Problem," Econometrica, Econometric Society, vol. 51(1), pages 7-45, January.
    2. Christopher Banks & Sheila O'Leary & Carol Rabenhorst, 1996. "Privatized Housing And The Development Of Condominiums In Central And Eastern Europe: The Cases Of Poland, Hungary, Slovakia, And Romania," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 8(2), pages 137-155, July.
    3. Bird, Stephen & Hernández, Diana, 2012. "Policy options for the split incentive: Increasing energy efficiency for low-income renters," Energy Policy, Elsevier, vol. 48(C), pages 506-514.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Roberts, M.B. & Bruce, A. & MacGill, I., 2019. "Opportunities and barriers for photovoltaics on multi-unit residential buildings: Reviewing the Australian experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 104(C), pages 95-110.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hugo Hopenhayn & Arantxa Jarque, 2006. "Moral Hazard and Persistence," 2006 Meeting Papers 670, Society for Economic Dynamics.
    2. Calcagno, R. & Renneboog, L.D.R., 2004. "Capital Structure and Managerial Compensation : The Effects of Renumeration Seniority," Discussion Paper 2004-120, Tilburg University, Center for Economic Research.
    3. Bruinshoofd Allard & Kool Clemens, 2002. "The Determinants of Corporate Liquidity in the Netherlands," Research Memorandum 014, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    4. Resende Filho, Moises de Andrade, 2007. "A Principal-Agent Model for Investigating Traceability Systems Incentives on Food Safety," 105th Seminar, March 8-10, 2007, Bologna, Italy 7897, European Association of Agricultural Economists.
    5. Yang, Jian & Qi, Xiangtong, 2009. "On the design of coordinating contracts," International Journal of Production Economics, Elsevier, vol. 122(2), pages 581-594, December.
    6. Hans Gersbach & Markus Müller, 2010. "Flexible pensions for politicians," Public Choice, Springer, vol. 145(1), pages 103-124, October.
    7. Goergen, Marc & Manjon, Miguel C. & Renneboog, Luc, 2008. "Recent developments in German corporate governance," International Review of Law and Economics, Elsevier, vol. 28(3), pages 175-193, September.
    8. Atasi Basu & Randal Elder & Mohamed Onsi, 2012. "Reported earnings, auditor's opinion, and compensation: theory and evidence," Accounting and Business Research, Taylor & Francis Journals, vol. 42(1), pages 29-48, March.
    9. Anil Aswani & Zuo-Jun Max Shen & Auyon Siddiq, 2019. "Data-Driven Incentive Design in the Medicare Shared Savings Program," Operations Research, INFORMS, vol. 67(4), pages 1002-1026, July.
    10. Inés Macho-Stadler & David Pérez-Castrillo, 2018. "Moral hazard: Base models and two extensions," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume I, chapter 16, pages 453-485, Edward Elgar Publishing.
    11. Xu, Xiaojing & Chen, Chien-fei, 2019. "Energy efficiency and energy justice for U.S. low-income households: An analysis of multifaceted challenges and potential," Energy Policy, Elsevier, vol. 128(C), pages 763-774.
    12. Sebastian Koehne & Nicola Pavoni & Arpad Abraham, 2011. "Optimal Income Taxation with Asset Accumulation," 2011 Meeting Papers 1161, Society for Economic Dynamics.
    13. Qiao Wang, 2023. "Does the Chinese labour force make sufficient efforts? Empirical evidence using non‐parametric analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 3262-3280, July.
    14. Nafziger, Julia, 2009. "Timing of information in agency problems with hidden actions," Journal of Mathematical Economics, Elsevier, vol. 45(11), pages 751-766, December.
    15. R. Glenn Hubbard & Darius Palia, 1995. "Benefits of Control, Managerial Ownership, and the Stock Returns of Acquiring Firms," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 782-793, Winter.
    16. Qi Zeng & Hae Won (Henny) Jung, 2014. "Optimal Contract, Ownership Structure and Asset Pricing," 2014 Meeting Papers 911, Society for Economic Dynamics.
    17. Ewerhart, Christian, 2016. "An envelope approach to tournament design," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 1-9.
    18. Anil Arya & Jonathan Glover & Pierre Jinghong Liang, 2004. "Intertemporal aggregation and incentives," European Accounting Review, Taylor & Francis Journals, vol. 13(4), pages 643-657.
    19. Lars Hornuf & Matthias Schmitt & Eliza Stenzhorn, 2020. "Does a Local Bias Exist in Equity Crowdfunding?," CESifo Working Paper Series 8154, CESifo.
    20. Cai, W. & Singham, D.I., 2018. "A principal–agent problem with heterogeneous demand distributions for a carbon capture and storage system," European Journal of Operational Research, Elsevier, vol. 264(1), pages 239-256.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:envira:v:48:y:2016:i:9:p:1829-1847. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.