Owners of highrise buildings and shopping centres, as well as their managers who are not valuers by qualification, are saying a resounding no to proposals that the Government tighten its reins on property management by amending current legislation.

In fact, they are so opposed to any form of regulation that they even want current laws controlling the work, via the Valuers, Appraisers and Estate Agents Act, to be repealed.

In a joint statement issued by the Real Estate and Housing Developers’ Association (Rehda), the Associated Chinese Chamber of Commerce and Industry Malaysia (Acccim) and the Malaysian Association for Shopping Complex and Highrise Management (PPK), and first issued to PropertyTimes, the alliance said: “As the major players in the Malaysian property industry, we do not support the inclusion of property management functions under the regulatory ambit of the Act.”

It added that the industry should move towards deregulation as “protectionist legislation is now outdated and should be amended to allow the industry to grow competitively”.

The response was in reaction to an article published exclusively in PropertyTimes on Feb 28, revealing that two groups of valuers want the Government to, among other things, further regulate property management by widening the powers of the Board of Valuers, Appraisers and Estate Agents (BVAEA), which is under the Ministry of Finance.

The Feb 28 article, quoting a joint memorandum issued by the Property Consultancy and Valuation Surveying (PCVS) section of the Institution of Surveyors Malaysia (ISM) and the Association of Valuers and Property Consultants in Private Practice (PEPS), said proposed amendments to the Act include the creation of a property management register in which certain non-valuers and bona-fide persons could be included “provided they possess basic qualifications” within a specified time frame of one year after the amendments have been gazetted.

Thereafter, entrants to the register must pass examinations conducted by the BVAEA.

Only with regulation, said ISM and PEPS, can a set of standards be introduced and enforced to guide the profession, in much the same way the real estate agency practice is now administered.

Rehda, Acccim and PPK, however, said property management is “an area of
work which does not impose the same degree of professional accountability”, unlike other regulated professions such as engineering, law and valuation.

The alliance said “there are current provisions under the Act to exempt property-based business as ‘property management’” and pointed out that since hotel operations do not come under its ambit, neither should shopping centres and highrise buildings as they too are “clearly properties based on generating revenue”.

Furthermore, it said because building owners, many of whom are Rehda
and/or Acccim members, take the commercial risk of “investing billions in loans and equity” in their properties, they “should have the absolute right to employ” who they think is most suitable to undertake the job of property management.

“Owners’ choices should not be restricted by the need to comply with the Act,” said the statement. “There are enough examples of prime real estate properties that do not engage … valuers or registered property managers (with the) Malaysian Government’s administrative centre in Putrajaya and Suria KLCC being two cases in point.

“Other Commonwealth countries such as Singapore and the United Kingdom, and the United States do not have … regulatory bodies or laws to restrict the work and designation of property managers.”

The alliance cautioned that “commercial shopping centre and highrise building management is a specialised field requiring (certain) business and entrepreneurial capability”, and should the proposed amendments to the Act be passed, “a ‘back door’ system … where a valuer/registered property manager ends up being the legal front while the actual work is carried out by other hands-on, albeit unregistered, personnel” could be created.

It also feared that the amendments would “lead to higher management fees via the farming out of property management jobs to valuers/ registered property managers”.

The alliance said the current rules governing the industry were put in place 23 years ago, during a time when it had to be protected from “international infiltration”. Today, however, this is no longer needed as it will only impede growth.

“Property management … comprising practitioners, has developed outside the mainstream of the valuation profession and is now (on) par with the best in the world … especially in commercial shopping centres and highrise buildings, so much so that even developed countries approach us to view and study our success,” it said.

“As the property and real estate industry grows in complexity and sophistication, what is needed is not more regulation but assurance of a supportive environment conducive to the growth of the industry.”