Property Talk: A weekly column by S.C. Cheah
THERE has been strong opposition against the proposed
amendment to the Valuers, Appraisers and Estate Agents Act 1981 that
aims to regulate the property management profession.
The opposing groups include the Malaysian Association
for Shopping and Highrise Complex Management (PPK), the Real Estate &
Housing Developers Association (REHDA), and the Property & Construction
Committee of the Associated Chinese Chamber of Commerce & Industry
Malaysia (ACCCIM).
The group that is for the amendment includes the
Board of Valuers, Appraisers and Estate Agents (BVAEA), Institution of
Surveyors Malaysia (ISM), Association of Valuers and Property
Consultants in Private Practice Malaysia (PEPS) and some local
varsities.
Critics feel that engaging registered valuers will
create a layer of “unnecessary” fees to perform probably minimal work as
the existing property management team, who may be non-valuers, are doing
most of the work. Some quarters are also reluctant to have the BVAEA as
the “regulator” and they prefer a deregulated state for the property
management business.
“Managing a shopping centre is not that easy. You
have to be with the centre from Day 1, right from the planning stage and
securing of tenants. What do the registered valuers know?” asked a
property manager of a shopping centre.
Others feel that the move by the BVAEA is tantamount
to creating a “cartel” for its members. It is also felt that further
regulation will not bode well with globalisation.
There are also fears that professional bodies are
becoming more “protective” and “monopolistic” of their turf. The recent
move by the Bar Council to impose a no discount ruling on certain fees
is a case in point.
Although it may appear to be a separate issue, many
property developers are unhappy, as they feel that all these may mean
house buyers will have to pay more.
Like it or not, the BVAEA is the present regulatory
authority in Malaysia for property management, and it regulates the
property management profession by way of the provisions of the Valuers,
Appraisers and Estate Agents Act 1981, and the Valuers, Appraisers and
Estate Agents Rules 1986 as amended.
Under the Act and Rules, the BVAEA maintains a
register each for the valuers and estate agents, and the practice of
valuation and estate agency is permitted only if a registered valuer or
estate agent practises through a firm that is a sole proprietorship, a
partnership or body corporate. To practise as a property manager, a
person must be registered under the Register of Valuation Firms that is
maintained by the BVAEA.
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Properties in Mont Kiara enjoy good rental rates and capital
appreciation partly because of good property management.
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The Act exempts owners of buildings from registration
for the purpose of undertaking their own in-house property management if
no fees are charged.
The crux of the matter falls on the word “fee”. This
is because property management is defined in the Act as “...the
management and control of any land, building and any interest therein,
excluding the management of property-based businesses, on behalf of the
owner for a fee and includes but is not limited to the following
responsibilities...”
They include monitoring outgoings and making payments
out of the income from the property; preparing budgets and maintaining
the financial records for the property; enforcing the terms of leases
and other agreements pertaining to the property; and advising on sales
and purchase, insurance and upgrading of the property.
BVAEA board member Elvin Fernandez said the current
confusion could be due to a lack of discussion as the two groups had met
only once last year.
“There is a real need for the two groups to meet to
thrash it out,” he said, adding that there was no basis to oppose
BVAEA's move to open a separate register for property managers through
the proposed amendments, as this would now allow bona fide property
managers to register themselves during the one-year grace period that
would commence from the date the legislation took effect.
“Those coming in after the one-year period may have
to take exams. We want to see bona fide people who are practising as
property managers to be registered. It is certainly not necessary for
the BVAEA, with its glass on the property management issue already half
full, to be replaced by another regulator under a different ministry.
Calls for complete deregulation, which are made from time to time, are
also not in the interest of creating a robust property management
profession in Malaysia,” he said.
On allegations that valuation companies would stand
to benefit from the lucrative property management business, Fernandez,
who is the managing director of Khong & Jaafar Sdn Bhd, said: “We manage
some 10,000 units of condominium and five to six million sq ft of office
space, but we make more (money) from valuation. Property management is
the last of our area of work,” he said.
He noted that a survey done five years ago showed
that valuation firms managed about 25 million sq ft of office space and
100,000 condominium units. “This is quite big and is growing by the
day,” he added.
