Association wants housing ministry to oversee property managers

http://thestar.com.my/metro/story.asp?file=/2012/12/4/central/12406690&sec=central

Tuesday December 4, 2012
Association wants housing ministry to oversee property managers
By TAN KARR WEI
karrwei@thestar.com.my

Big bucks: It is estimated that property management fees per year can come up to RM1.5bil from 4,000 highrise properties in Malaysia. Big bucks: It is estimated that property management fees per year can come up to RM1.5bil from 4,000 highrise properties in Malaysia.

THE Building Management Association of Malaysia (BMAM) wants a board of property managers that is independent of the Board of Valuers, Appraisers and Estate Agents (BVAEA).

“We are not against the regulation of property managers.

“We feel that there should be a separate board that is placed under the Housing and Local Government Ministry to regulate and license all who are qualified and experienced in managing property,” said BMAM president Datuk Teo Chiang Kok.

Under the new Strata Manage-ment Bill that was recently tabled in Parliament, only property managers who are registered valuers are allowed to manage stratified properties in the country.

The association has been lobbying for the term “registered property managers” to be removed from the Bill because they felt that it will create a monopoly of property management by the handful of registered valuers and render all existing property managers unqualified.

BMAM founding members include the Institution of Engineers, Malaysian Institute of architects (PAM), Real Estate and Housing Developers’ Association Malaysia (Rehda), Malaysian Association for Shopping and High-rise Complex Management (PPKM), the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), who together with Joint Manage-ment Bodies (JMB), Management Corporations (MC), facilities managers and managing agents represent over 200,000 members who are also property owners.

BMAM deputy president Lee Weng Onn said the association had presented a draft for setting up a board of building managers to the Housing and Local Government Ministry last year.

“There has never been a question of us not wanting regulation,” said Lee, an engineer by profession.

Why an independent board?

Teo contended that all matters pertaining to stratified property fell under the jurisdiction of the Commissioner of Buildings (COB), which comes under the housing ministry, while the BVAEA comes under the Finance Ministry.

“All buildings require a certificate of completion and compliance that is issued by the local authority as well.

“Besides that, all buildings have to be certified for safety and health annually by the local authority.

“If we have building managers who are answerable to the Finance Ministry, how can there be responsibility and accountability?

“We are all for legislation but the board should not be under different ministries,” said Teo, who is also Bandar Utama City Corporation director.

BMAM is also concerned that restricting the role of property management to registered valuers can lead to a shortage of valuers to take up the role.

In a previous StarMetro report, Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPS) president Lim Lian Hong said the public did not have to worry about a shortage of qualified property managers because local universities had been producing hundreds of graduates since the 1970s and there were now thousands of graduates in property management, including those qualified overseas.

Registered valuer Dr Ernest Cheong pointed out that there were currently only about 700 valuers registered with the BVAEA.

According to the BVAEA website (www.lppeh.gov.my), there are 749 registered valuers, 17 registered appraisers, 1,690 registered estate agents, 666 probationary valuers and 306 probationary estate agents.

What is at stake?

According to Cheong, there is an estimated RM1.5bil in property management fees per annum from about 4,000 high-rise properties in Malaysia.

“With only 750 registered valuers, each valuer will be handling about RM2mil worth of property management fees per annum.

“Bear in mind that not all registered valuers are practising property managers.

“There are only 150 valuers practising property management and that will come up to RM10mil per valuer,” said Cheong.

He feared that giving exclusive managing rights to the existing registered valuers could lead to the practice of sub-contracting the jobs to third parties, because the law did not specify that a valuer could not employ another person to do the job.

Cheong said under the Valuers, Appraisers and Estate Agents (VAEA) Act, property managers could charge a professional fee for services rendered.

“Why should Malaysians be burdened by this professional fee on top of what they are paying in maintenance fees? Management fees should be left to market forces,” he said.

BMAM secretary-general S. Venkateswaran said the public should be allowed to decide if they wanted the full-fledged service of a professional valuer.

“Not all properties have the same needs. Medium- or low-cost apartments with minimum facilities may need only basic services from a building manager,” he said.

Protecting interest of owners

Venkateswaran said the fear-mongering about building managers running off with their maintenance fees did not hold water.

“JMBs and MCs of all residential and commercial properties are responsible by law for all funds collected and banked into the building maintenance fund.

“The principal officers (chairman, secretary and treasurer) are official signatories to all cheques issued and other financial dealings. All collections are banked into the building management fund.

“There must be an AGM held every year, during which accounts are audited, submitted and tabled. Minutes of meetings, secretary’s reports and accounts are required by law to be submitted to the COB. All these preventive measures are already in place,” he said.

Qualification versus experience

Teo said property management was a multi-disciplinary management function, some skills which a valuer alone did not have.

A board of building managers should not be restricted to valuers only but instead include professions such as architects, engineers and facility maintenance managers.

BMAM committee member Richard Chan, who is also a past president of the Malaysian Association for Shopping and High-rise Complex Management, said shopping complex managers had been doing well for themselves without being subjected to a board of valuers.

“There are now about 300 shopping centres in Malaysia out of which about 40% are strata properties yet hardly any of those are being managed by valuers.

“I have managed shopping centres for 32 years, starting with Ampang Park in the 1980s. Our concern is that out of the 750 valuers, how many have actually managed a shopping centre or even a condominium?

“For shopping centres, it is not only about property management but also about marketing, promotions and advertising,” he said.

Minister: No plans to set up board yet

Housing and Local Government Minister Datuk Seri Chor Chee Heung said the requirement for property managers to be a registered valuer had been taken out of the act but there was no plans in the near future to set up an independent board of building managers.

“There are currently thousands of property managers who are already managing strata properties. Once the Bill has been gazetted, we will monitor the situation.

“When BVAEA opened up the registration for current building managers who are not registered valuers, there was a list of conditions to fulfil and many were not interested.

“We will see if they can work something out. For now, it is up to JMBs, MCs and developers to choose whoever they wish to manage their property.

“If they feel that they need the registered valuers, so be it. We also recognise the contributions of registered valuers.

“In the event that unit owners disagree with the sum fixed by the developer, JMB or MC for the purpose of maintenance fees or sinking fund, the Bill states that the COB will appoint a registered valuer to calculate the appropriate fees and sinking funds.

I do think, as for SR, no need to go high for valuers/building managers. luckily it was not compulsory, otherwise you can expect increase in maintenance charges.

CYH wrote:I do think, as for SR, no need to go high for valuers/building managers. luckily it was not compulsory, otherwise you can expect increase in maintenance charges.

Agreed. Our Sierra is unique with very low density of 256 units become very quite & comfort to stay...however this unique caused limited fund to run the maintenance over here...as I mentioned it makes JMB is a very hot seat to work where either JMC have to hands on to do works OR like you said increased the maintenance fees...

Below my very rough estimation...
1 month maintenance services = RM35k
1 month maintenance company fee(inclusive Mgr + clerk) = RM10k(estimated only)
1 month add hoc repair = RM5k(max)
Total required = RM50k
1 month collection(ave - RM156) = RM40k
shortage = RM50-RM40 = RM10k
average top up per unit = RM10k/256 = RM40