Have separate board
WE refer to the letter “Leave it to professionals”, (see article below) on the issue of strata management.
Building
management is not a profession: it is a multi-disciplinary management
function encompassing a wide range of skills such as engineering,
architecture, accounting, law, vocational skills, etc.
It cannot and should not be the exclusive domain of any particular profession like registered valuers.
No
country has laws that specify that only registered valuers admitted as
property managers pursuant to Section 21(1)(a) of the Valuers,
Appraisers and Estate Agents Act, 1981 (VAEA Act) can undertake property
management.
To put things in perspective, the Building
Management Association of Malaysia (BMAM) is not objecting to registered
valuers managing stratified properties.
What we are strongly
opposed to is the creation of a monopoly favouring registered valuers if
the Bill is signed into law in its present form.
The Board of
Valuers, Appraisers and Estate Agents is offering to open a sub-register
for non-valuer managing agents to be admitted as property managers.
We
are not accepting the board’s proposal as it would only further
entrench its monopoly over property management, given that the
admission, suspension and even eventual deregistration of non-valuer
property managers will be at the sole discretion of the board.
We
are calling for the establishment of a separate multi-disciplinary
Board of Building Managers under the jurisdiction of the Housing and
Local Government Ministry with regulatory support from the Commissioner
of Buildings (COB).
There are more than 4,000 stratified projects
(80% of them residential) in Malaysia at the moment, and about five
million Malaysians belonging to the low and middle income groups live in
them.
Since the common properties and facilities in the flat and
apartment premises cannot be sold or subdivided and are meant for the
exclusive use of the residents, all that the owners need is a building
manager to maintain the common areas and facilities, and not a property
manager whose portfolio includes leasing, collection of rent, promotion
of sales, etc.
A building manager appointed by the joint
management body (JMB) or management corporation (MC) upon mutually
agreed terms and conditions of scope of work and remuneration would be
significantly cheaper than a property manager whose fees are subject to a
schedule under the VAEA Act.
The building manager is only
expected to carry out his duties and responsibilities according to the
terms and conditions of his appointment as well as the instructions of
the JMB or MC Management Committee.
All fiduciary
responsibilities, particularly the management of the Building Fund
Account, are undertaken by the JMB or MC pursuant to the Building and
Common Property (Maintenance and Management) Act, 2007 and the Strata
Titles Act, 1985.
These records are submitted to the COB every year after the annual general meeting.
PROF S. VENKATESWARAN
Secretary General
Building Management Association of Malaysia
Leave it to professionals
THE public deserves an unbiased understanding beyond the shadow play
leading up to the third reading of the Strata Management Bill 2012 in
parliament.
The proposed Act stipulates that a managing agent for
stratified property must first be free from any potential conflict of
interest (i.e. independent) and secondly, a registered property manager.
The
Act replaces the Building and Common Property Act, which did not
emphasise that such functions are to be performed by a registered
property manager.
The key problem is that property management at
present is also practised by an unregulated group and such parties are
not accountable to a regulatory body unlike registered persons i.e.
property professionals or chartered surveyors.
The new Act aims to rectify this disparity by uniformly regulating all property managers of stratified properties.
Under the Valuers, Appraisers and Estate Agents Act (VAEA), a Registered Property Manager must possess:
1) An academic qualification from an approved institution of higher learning or recognised professional examinations; and
2) Pass the Test of Professional Competence set by the regulating body.
These
robust standards and established processes are aimed towards
registering professionals of sound qualifications and adequate
competency levels.
A registered property manager is continuously
subjected to a code of conduct, professional standards and various
stipulations under VAEA to ensure they discharge their duties in a
manner that serves the public adequately and to the highest possible
industry standards.
The registration of property managers and
firms is undertaken by the Board of Valuers, Appraisers and Estate
Agents Malaysia (board).
The board, a governmental regulatory
body under the purview of the Finance Ministry, was set up in 1981 to
regulate Estate Agents, Valuers, Appraisers and Property Managers in
Malaysia.
It is legislatively empowered to deal with complaints
from the public and take disciplinary action against any errant
registered persons or firms, including stripping them of their licence
and barring them from further practice, amongst other possible
disciplinary measures.
Given the established competency
requirements and standards imposed on registered property managers, I
cannot see beyond reasonable logic for such professionals to utterly
fail in their professional duties to a joint management corporation,
management corporation or individual owner.
The board, in the spirit of laissez-faire, has opened the registration of property managers to include these non-regulated practitioners.
Property
management was always the domain of property professionals but only in
recent history, primarily property developers and others have set up
property management businesses to rival property professionals for the
property management trade but in an unregulated fashion, taking
advantage of the limitations of statutes. This is where the battle lies and the public should take notice.
If
a non-regulated practitioner wishes to practise as a property manager
in efforts to legally comply with the greater standards as demanded by
the new Act, I cannot see why they should shy away and not readily
subject themselves through the established process and competency test
in order to become a registered property manager.
The process is
not designed to penalise individuals but to assess if a candidate has
the required level of competency, in order to be accountable to the
public as a practising professional.
The merit of regulating the
property management profession far outweighs any self-serving agenda,
and the public must insist for high standards in lieu of the nation’s
Vision 2020 agenda.
To the lawmakers and members of Parliament,
my plea is to make the right decisions in cognisance of standards,
accountability and professionalism.
The last thing we want is a mushrooming of “urban slums” in our beautiful country.
A. PADMAN Kuala Lumpur - The Star, Nov 5 2012
Related posts:
Managing strata properties in Malaysia
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Showing posts with label Building management. Show all posts
Showing posts with label Building management. Show all posts
Thursday, November 8, 2012
Tuesday, September 11, 2012
Managing strata properties in Malaysia
I LIKE to highlight the rather difficult and controversial issue of
the management (and maintenance) of stratified properties, particularly
flats, apartments and condominiums, in the context of the proposed
Strata Management Act, 2012 which is expected to be tabled during the
upcoming session of Parliament.
The Building Management Association of Malaysia (BMAM) is the only multi-stakeholder organisation (established in 2009) representing the collective interests of chambers of commerce, developers, engineers, architects, shopping and high-rise complex managers, management corporations (MCs), joint management bodies (JMBs) and managing agents.
However, BMAM was not nvited to participate in the workshops and discussions held by the National Land Council and the Housing and Local Government Ministry when the draft Bill was deliberated, although the implementation of the Act will have consequences that will directly affect BMAM stakeholder-member organisations.
According to the information available to us, the Bill states that only licenced valuers who have been admitted as Property Managers pursuant to Section 21(1)(a) of the Valuers, Appraisers and Estate Agents Act, 1981 (VAEA Act) to manage and maintain stratified (or subdivided) buildings as managing agents.
No such restrictions exist in the current laws that regulate building management, namely the Strata Titles Act, 1985 (ST Act) and the Building and Common Property (Maintenance and Management) Act, 2007 (BCPMM Act).
Building management is a multi-disciplinary occupation and cannot be exclusive to the valuers alone.
The JMBs and MCs want to have the independence and opportunity to appoint any fit and proper person, or appropriate entity, as managing agent on a “willing seller-willing buyer” basis on mutually agreed terms and conditions.
The Bill, by restricting building management and maintenance to valuers, would create a monopoly, and is inconsistent with the spirit of the Competition Act, 2010, which clearly discourages the creation of monopolies.
Though building owners (JMBs and MCs) and Real Estate Investment Trusts (REITs) have been exempted from this ruling, most JMBs and MCs, led by volunteers, do not have the time, skill, expertise or experience to manage and maintain their buildings, and neither can they afford to appoint a registered property manager as a managing agent.
JMBs and MCs would be required to pay a management fee in compliance with their Fee Schedule, excluding other operating costs such as staff salaries, electricity, water, cleaning, security, etc.
We will soon see the mushrooming of more urban stratified slums and ghettos, thereby defeating the objectives of the Government’s squatter resettlement programmes and public housing projects.
The fiduciary responsibilities of the MCs and JMBs have been clearly stated in the ST Act and the BCPMM Act on the management of the Building Maintenance Fund and the Sinking Fund.
The managing agent appointed by the JMB or MC to manage and maintain the subject properties is only required to perform these functions for and on behalf of the JMB or MC. A registered property manager is therefore not required.
The MCs and JMBs only need building and facilities management for their common properties.
Since common properties and facilities cannot be sold, and most residential building owners do not lease their common properties to third parties as they would need them for their own use.
Many non-valuer managing agents have several years of experience in building and facilities management.
They have also been admitted as members and registered building managers by BMAM upon satisfying the required admission criteria.
They are qualified and skilled in building management, operations and facilities maintenance, and have also subscribed to a professional building management liability insurance policy entered into between a local insurance company and BMAM.
Any attempt by the ST Act to split managing agents as valuers and non-valuers will be detrimental to the growth and development of the building management industry in Malaysia.
It will result in the loss of valuable management talent in the industry. It will also have serious social implications on the upward career mobility of qualified and experienced local building managers, many of whom are bumiputras.
The Commissioner of Buildings (COB) should be the sole regulatory body to
supervise and oversee the management and maintenance of stratified buildings in Malaysia.
The involvement of third parties, who have no ownership interests in the properties, will not only erode the COB’s authority but may also result in unnecessary layering, additional costs (with no proportionate increase in service quality), corruption, rent seeking and abuse of power.
PROF S. VENKATESWARAN
Secretary-general
Building Management Association of Malaysia
The Building Management Association of Malaysia (BMAM) is the only multi-stakeholder organisation (established in 2009) representing the collective interests of chambers of commerce, developers, engineers, architects, shopping and high-rise complex managers, management corporations (MCs), joint management bodies (JMBs) and managing agents.
However, BMAM was not nvited to participate in the workshops and discussions held by the National Land Council and the Housing and Local Government Ministry when the draft Bill was deliberated, although the implementation of the Act will have consequences that will directly affect BMAM stakeholder-member organisations.
According to the information available to us, the Bill states that only licenced valuers who have been admitted as Property Managers pursuant to Section 21(1)(a) of the Valuers, Appraisers and Estate Agents Act, 1981 (VAEA Act) to manage and maintain stratified (or subdivided) buildings as managing agents.
No such restrictions exist in the current laws that regulate building management, namely the Strata Titles Act, 1985 (ST Act) and the Building and Common Property (Maintenance and Management) Act, 2007 (BCPMM Act).
Building management is a multi-disciplinary occupation and cannot be exclusive to the valuers alone.
The JMBs and MCs want to have the independence and opportunity to appoint any fit and proper person, or appropriate entity, as managing agent on a “willing seller-willing buyer” basis on mutually agreed terms and conditions.
The Bill, by restricting building management and maintenance to valuers, would create a monopoly, and is inconsistent with the spirit of the Competition Act, 2010, which clearly discourages the creation of monopolies.
Though building owners (JMBs and MCs) and Real Estate Investment Trusts (REITs) have been exempted from this ruling, most JMBs and MCs, led by volunteers, do not have the time, skill, expertise or experience to manage and maintain their buildings, and neither can they afford to appoint a registered property manager as a managing agent.
JMBs and MCs would be required to pay a management fee in compliance with their Fee Schedule, excluding other operating costs such as staff salaries, electricity, water, cleaning, security, etc.
We will soon see the mushrooming of more urban stratified slums and ghettos, thereby defeating the objectives of the Government’s squatter resettlement programmes and public housing projects.
The fiduciary responsibilities of the MCs and JMBs have been clearly stated in the ST Act and the BCPMM Act on the management of the Building Maintenance Fund and the Sinking Fund.
The managing agent appointed by the JMB or MC to manage and maintain the subject properties is only required to perform these functions for and on behalf of the JMB or MC. A registered property manager is therefore not required.
The MCs and JMBs only need building and facilities management for their common properties.
Since common properties and facilities cannot be sold, and most residential building owners do not lease their common properties to third parties as they would need them for their own use.
Many non-valuer managing agents have several years of experience in building and facilities management.
They have also been admitted as members and registered building managers by BMAM upon satisfying the required admission criteria.
They are qualified and skilled in building management, operations and facilities maintenance, and have also subscribed to a professional building management liability insurance policy entered into between a local insurance company and BMAM.
Any attempt by the ST Act to split managing agents as valuers and non-valuers will be detrimental to the growth and development of the building management industry in Malaysia.
It will result in the loss of valuable management talent in the industry. It will also have serious social implications on the upward career mobility of qualified and experienced local building managers, many of whom are bumiputras.
The Commissioner of Buildings (COB) should be the sole regulatory body to
supervise and oversee the management and maintenance of stratified buildings in Malaysia.
The involvement of third parties, who have no ownership interests in the properties, will not only erode the COB’s authority but may also result in unnecessary layering, additional costs (with no proportionate increase in service quality), corruption, rent seeking and abuse of power.
PROF S. VENKATESWARAN
Secretary-general
Building Management Association of Malaysia
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