Old is Gold

Historical buildings offer unrealized value 

Refurbished heritage properties in Jalan Lau Ek Ching in Ipoh. One is for sale at RM2mil.  

What price is one willing to pay to own a piece of history?

According to valuation surveyor and property consultant Choo Ah Sit, sources have revealed that the former OCBC Bank building on Lorong Hang Jebat in Malacca has been attracting attention from foreign buyers. Some Singaporeans are said to have offered between RM22mil and RM25mil for the property.

However, since foreign buyers are required to obtain approval from the state’s Foreign Investment Committee, which can be a time-consuming process, the owners have offered the early mordernist style building to a local company for RM17.5mil.

The total land area for the five lots covers some 7,739 sq ft with a 3½-storey building with a total built-up area of about 23,500sq ft. Crunching the numbers, if the offer of RM17.5mil goes through, the price of the property works out to RM2,261 per sq ft.

“With that kind of money, you can construct a new 15-storey building, but not in the core zone of the Unesco heritage site, of course,” Choo said.

Property valuer Choo Ah Sit says the prices for heritage buildings have gone ‘crazy’ since Unesco recognised it in 2008.

Having observed the property market in Malacca for the last 33 years, Choo’s honest assessment of the market is, in his own words, “crazy”.

“The current trend now is, ‘You like, you pay. Don’t ask about the price’,” Choo declared.

From a map showing the Jalan Tun Tan Cheng Lock-Jalan Hang Jebat area (famously known as the Jonker Street area) and its immediate lanes, there are no less than 20 properties available for sale, but there are few signboards to indicate the owners’ intentions.

“In some cases, someone who has taken a fancy to a building will simply ask around for the owner’s contact. Surprisingly, word spreads fast. This is how some transactions are concluded,” revealed Choo.

The steep jump in prices, said Choo, came in tandem with the declaration of the area as a Unesco heritage site.

“From the 1970s to the 1990s, there was no interest in these buildings. One was because of the Rent Control Act that saw rental rates for buildings built before World War II being fixed at RM100 to RM200 per month. The returns were not enough to motivate owners to perform the necessary maintenance, resulting in some of these structures falling into a sorry state of disrepair. Only when the Act was abolished and the free market allowed to take over, did prices start to move upwards by anywhere between 30% and 50%,” Choo said.

For an idea of how much investors are expected to fork out at current market prices, Choo revealed that asking property prices in the heritage zone in Malacca can start from RM600psf to as high as RM1,600psf, depending on location factors such as accessibility and traffic flow.

Choo cites three interesting cases.

One property located along Jalan Tun Tan Cheng Lock made a record sale of RM1,221psf while prices for two single-storey shop houses in Jalan Hang Kasturi appreciated from RM980,000 to RM1.75mil in a short span of nine months.

Choo surmised this may be caused by the property changing hands over a short period of time. He also does not rule out factors such as speculation and the undervaluing of property.

.  
A pre-war shop with a restaurant for sale in Lorong Panglima, Ipoh, for RM1.5mil.

Another plum lot is a two-storey pre-war building occupying 1,717sq ft on Jalan Tun Tan Cheng Lock that is asking RM2.8mil or RM1,630psf.

“The high prices are mainly due to a fixed supply and it will keep rising because of this. Where foreign buyers are involved, it may have something to do with the prestige of owning a piece of property in a Unesco heritage site. The other thing is our favourable exchange rate,” said Choo of the dramatic prices.

Over in Penang’s Georgetown, which received the Unesco heritage designation at the same time as Malacca, Jennifer Yeoh, 47, a real estate agent for the past five years, said the appreciation for old buildings had been foreseen by some businessmen who transformed these premises into restaurants, hotels and retail outlets as early as a decade ago.

Case in point is Gurney Paragon on Gurney Drive. Standing together with the brand new mall is the 88-year-old St Joseph’s Novitiate.

In 2004, the 10-acre parcel of land was sold to Hunza Properties for RM97.86mil, or roughly RM250psf back then.

Today’s prices have, of course, risen significantly.

In Yeoh’s listings, for example, there is a row of seven units on Lebuh Clark each occupying 650sq ft going at RM1.2mil a unit or RM1,846psf. Over on Jalan Irving, a two-storey bungalow with a built-up area of 3,964sq ft is going for an asking price of RM4.5mil or RM1,135psf. On Beach Street (Lebuh Pantai), the owner of a two-storey shop house covering an area of 4,475sq ft has put the property up for sale at RM1,005psf.

“The trend is not to buy them singly but to purchase maybe a row of seven units at a time so that bigger commercial projects can take place,” says Yeoh.

She reckons buyers in this category are also antique appreciators in a way. In some of Yeoh’s listings, there is still old furniture from the post-World War II era inside.

Over in Ipoh, head of business development for Oriental Realty, Gladwin Agilan said the interest in pre-war and heritage buildings started in 2008 when a group of local businessmen began buying properties on Jalan Raja Ekram, Jalan Lau Ek Ching and Lorong Panglima and converting them into watering holes and eateries.

History, said Agilan, 37, was the main selling point. He cites Lorong Panglima as an example.

“In the past, this was known as Concubine Lane, formerly a red light area. Tin miners were said to keep their mistresses there, away from the public eye, in these very houses. Over time, international media and local historians played a part to stoke interest in the area.

With the influx of visitors who have found the architecture and nostalgia an ideal spot for wedding photography, local authorities were prompted to repair infrastructure like drainage and other utilities,” Agilan said.

Over 10 years, Agilan has seen property prices for pre-war buildings in Ipoh starting from as low as RM150,000 to RM180,000 and appreciating to a current price of RM550,000 to RM600,000.

“In our records, the last transaction for a pre-war building was at RM950,000. Today, offers have reached RM1.1mil,” he said.

In his current listings, a refurbished two-storey pre-war building measuring about 900sq ft on Panglima Lane is going for an asking price of RM800,000, which works out to an auspicious RM888psf.

The first floor is already tenanted, but the upper floor can be adapted into a homestay. Over in Jalan Lau Ek Ching, where the famed Bricks and Barrels watering hole is located, the current asking price for any one of the refurbished buildings covering 1,900sq ft on this row is RM2mil, about RM1,052psf.

Agilan explained the intention of most owners is not to restore but adaptive reuse. First on the agenda is the electrical rewiring, plumbing, roofing and flooring.

Walls are usually in the form of cement skreed and if the original floors are of timber, these will usually be replaced with double volume metal decks for safety and functionality. Renovation costs for such projects are usually in the range of RM100,000 to RM150,000.

According to Agilan, Ipoh is a veritable trove for heritage building hunters as there are no less than 2,000 units over 80 to 100 years old scattered in seven main areas.

The buildings can be found on Jalan Sultan Iskandar, Jalan Sultan Yusuf, Jalan Silang, Jalan Bandar Timah, Jalan Othman Talib, Jalan Bijih Timah and the two streets mentioned earlier.

However, Agilan reckons the chance to own a property in this market segment requires a lot of conviction.

“The owners really have a lot of holding power. There are cases where offers have had to wait between six months to a year before getting a reply. The oft-received response I always get from the owners is ‘Not now’ when it comes to the question of selling their property. Understandably so, as some of them are ancestral homes,” said Agilan.

But mindsets, observed Agilan, are slowly changing with the younger generation.

“In the 1980s, during the lull in tin prices, many moved to Kuala Lumpur. Back then, these properties had not reached their full worth yet as buyers did not know what to do with them.

“However, the economic revival in Ipoh has changed things and given people new ideas so this is a very good time to sell, and buy,” concluded Agilan.

- Contributed  by story and photos by Grace Chen The Star Metrobiz

Malaysian property sector no immediate bubble risk

PETALING JAYA: The Malaysian property sector is not in any immediate risk of experiencing a bubble, according to property consultant CBRE Malaysia executive chairman Chris Boyd.

He said despite rising residential property prices, houses in Malaysia were still among the cheapest in the region.

“Residential property prices increased at a constant pace in Malaysia until 2009, but have been accelerating until recently.

“However, prices are not as volatile as those observed in Hong Kong and Singapore,” he said in a presentation during the 16th National Housing and Property Summit 2013.

“In comparison with selected Asian luxury residential prices, Kuala Lumpur remains one of the cheapest cities in the region,” said Boyd.

According to him, the average luxury residential property in Hong Kong costs nearly US$3,000 (RM10,200) per sq ft, compared with US$250 (RM850) per sq ft in Kuala Lumpur.

He pointed out that to overcome the issue of rising property prices, the Government had launched two schemes to make houses affordable, namely the Malaysia My First Home Scheme, which was introduced in 2011, and the 1Malaysia Housing Programme, which came into effect in 2012.

Meanwhile, Universiti Putra Malaysia Housing Research Centre professor Datuk Abang Abdullah Abang Ali said the recent Government initiatives were addressing the issue of rising prices but added that it was not clear if that was enough.

He said artificial increase in prices would create a bubble, noting that there was a serious mismatch between income and property prices, especially in the Klang Valley.

“This indicates that affordable homes are not being built to cater to the general market and most buyers in the Klang Valley are likely to be investors or speculators.

“As market prices head for a correction and speculation decreases, there may be an oversupply of properties above RM550,000.”

Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan, in his opening speech, said the Government had to mitigate excessive investment and speculative activity in the property market so as to prevent a property bubble.

“Moving forward, the Government would not hesitate to further tighten the fiscal policies in order to curb property speculation and ensure reasonable and affordable property prices in the country.”

Abdul Rahman said the low real property gains tax, which was increased from 5% to 15% last year, had not been effective in preventing the increase in house prices.

Contributed by EUGENE MAHALINGAM  The Star/Asia News Network

Malaysian property market sentiment after GE13

With the dust having settled after the 13th General Elections, all eyes are now on the freshly elected government for strategies for the real estate sector.

While other issues such as increasing the minimum purchase price for foreign buyers and reducing lending rates and stamp duties are also on the wish list of most Malaysians, latest figures released by PropertyGuru Group highlighted a continuing call for the government to address the issue of home affordability.

In the latest Property Sentiment Survey (Q2 2013) by the leading online property group, 76% feel that the government is not doing enough to curb the current price increase. This is more acutely felt in regions that have experienced a high foreign demand for residential properties, namely Johor (69%) and Kuala Lumpur (81%).

While 35% out of the total of 851 respondents claim that the outlook of the local property market will remain positive, four in five expect prices to increase further in the next six months.

Respondents also seem to favour stricter market restrictions on property ownership by foreigners, with nearly half supporting an increase in the minimum purchase price from RM500,000 to RM1 million for overseas buyers and investors wanting to buy properties in Penang and Johor.

Despite the growth in price, 74% of respondents intend to buy at least one property type (either residential or commercial) within the next six months, an increase of 10% as compared to the previous quarter. This is because of the perception that the more expensive a property becomes, the higher capital appreciation it will bring in the long term.

“There is a dilemma at play for Malaysians. As they see property prices spiral up, they also see their assets appreciating in value. But in the long term, they are also finding it more challenging to own properties,” Added Value Singapore managing director Raymond Ng says.

“Affordability is also a bigger concern for the younger adult population. There is no doubt that there are enough local funds to fuel the market and allow the government to control prices a bit better without relying on foreign investments. The challenge is finding the sweet spot that will entice locals to invest locally while not turning away all foreign investments.”

The survey was conducted by PropertyGuru Group in collaboration with Added Value-Saffron Hill, a Singapore-based independent professional research agency.

Conducted since 2010, it is the only independent local survey to measure property sentiments and expectations about the property market amongst Malaysians.

It is also carried out across the group’s four key target markets of Singapore, Malaysia, Indonesia and Thailand, attracting 4,062 online respondents aged 21 to 69 who are influencers or decision makers on property.

“The results are consistent with figures from previous quarters where 75% of Malaysians find property to be expensive.

Kho says Malaysians want more affordable homes and are looking to the government to deliver. 

“The message is clear; Malaysians want more affordable homes and are looking to the government to deliver. PR1MA is a step in the right direction, but Malaysians want more measures and existing measures to be expedited, PropertyGuru.com Malaysia country manager Gerard Kho says.

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Regulate property management! Forum on Strata Management in Penang

IT is understandable for the Strata Management Act to attract much public interest. There are (or will soon be) more people living in high-rise strata properties than in landed properties, given the rapid urbanisation and rising land prices in Malaysia.

The issue of the Board of Valuers, Appraisers and Estate Agents (BVAEA) seeking to regulate property management is controversial. Since the BVAEA is a body under the Finance Ministry, isn’t it odd that the Finance Ministry rather than the Housing Ministry is trying to regulate property management?

Most people have a pretty good idea about the job of a property manager and would conclude that it is a generalist’s job.

There should not be too many restrictions attached to a generalist’s job, such as that of a sales manager or a supermarket manager.

The opinion of HBA honorary secretary-general Chang Kim Loong on the role of a property manager is a bit overstated.

Property managers are at all times employees of MCs and JMBs and never the other way round.

Lives and property worth millions of ringgit are the prime responsibilities of employers and not the employees.

It is an exaggeration to say that lives and property worth millions are being entrusted to property managers to care, control and manage.

However, it may be a good idea to regulate the property manager’s job, but it would be more appropriate if it came under a board in the Housing Ministry with input from engineers and architects.

It would be less appropriate to come under a board in the Finance Ministry, as property management has more to do with building than finance.

By A CONCERNED CITIZEN Kuala Lumpur

Forum on strata management

A SEMINAR on the Strata Management Bill 2012 as well as the Strata Titles (Amendment) Act 2012 will be held at Auditorium C and F, Level 5, Komtar, from 10am to 4pm on Jan 13.

Komtar assemblyman Ng Wei Aik said many people were unaware of the new bill’s contents, including how to handle strata management disputes.

“The bill provides better protection for property owners. It is important that they know their rights,” he said at a press conference.

He said lawyer Lee Khai would talk on the application of the Strata Management Bill while licensed land surveyor Chuang Kuang Han would talk on Strata Titles Application and Problematic Cases.

Registration fee is RM30 per person which includes buffet lunch and lecture notes.

The public, including management corporations, joint management bodies and residents associations are invited to attend.

For more details, contact Ng’s service centre at 04-2270215/017-4108914/012-4290163, fax 04-2278215 or e-mail dapkomtar308@gmail.com before Jan 8.

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Good property management, maintenance add value

Stratified developments becoming a way of life

As stratified developments become a way a life, good maintenance and management have become an issue.

 

EARLIER this year, a new set of property managers replaced the previous one in the condominium that Siti lives. Not having a current account, she paid her quarterly management fees in cash. She was told that the receipt would be put in her postbox. It never came and she soon discovered that the property management company had absconded with the money.

As stratified developments which include condominiums, service apartments and gated and guarded projects become a way of life, good maintenance and management have become an issue.

Good management and maintenance will improve the value of the asset. This applies to all segments of the property market, be it residential, commercial or industrial.

Hence, the third reading of the Strata Management Bill 2012 on Monday is crucial, says Assoc-Prof Ting Kien Hwa, head of Centre for Real Estate Research at Universiti Teknologi Mara.

“Currently, property management is part of a service provided by valuers, who are regulated by the Board of Valuers, Appraisers and Estate Agents.

The work of valuers can be broadly divided into three areas property management, valuation work and real estate agency work.

This means that property management is a regulated profession and delinquents risk having their licence suspended.

For the last five to six years, managing stratified properties has become an issue, he says. As more of us live in gated and guarded developments, and high rise condominium and serviced apartments, property management is evolving to become a lucrative industry.

Ting says the Board of Valuers is in the process of creating a third register to accommodate property managers. Valuers and real estate agents are governed by two registers and the Board of Valuers are working on creating a third one for property managers.

Says Ting: “This is a similar situation as in the early 1980s when there were many illegal real estate agents. They were given a one-year period to register with the board.”

Ting says the duty and responsibilities of property managers go beyond just collecting money and managing a property. The word “managing” covers a whole gamut of expertise and responsibilities. These include insurance valuation, the appropriate rate of service charges to levy on owners, managing service providers like security guards and cleaners, gardeners and managing tenants and rental rates among other duties.

Depending on whether it is a residential or commercial property, some issues may overlap.

To claim that valuers want to monopolise the property management industry is incorrect, Ting says.

“Some parties say they want to liberalise' the profession. Just as engineers and architects are regulated by the Institute of Engineers and Pertubuhan Akitek Malaysia respectively, so property managers are regulated by the Board of Valuers because property management is part of the work of valuers. This is the situation in the United States, Britain and Australia. Shall we then liberalise' the achitecture and engineering profession by allowing more people who are untrained to practise as architects and engineers because architects and engineers are monopolising' the industry?” Ting asks.

Ting says this argument to liberalise the profession and cut out the monopoly does not hold water at all.

He says there are currently 8,000 trained property managers in the country and every year, 450 more graduates enter the job market.

The local public universities provided courses in property management in the late 1960s because they knew there would be a need for this.

Malaysian Institute of Professional Property Managers president Ishak Ismail says: “The Government was visionary enough to foresee a time when stratified housing will become part of the Malaysian property landscape. The first condominium was Desa Kuda Lari in the KLCC area.

“Today about four million people live in stratified projects. About 80% of all the stratified projects are managed by joint management bodies and management committees. About 20% are outsourced and of this about 58% are managed by illegal property managers.”

Ishak said over and above the various issues that fall under property management, two sets of skills are needed the hard skills in managing the property and the soft skills in people management.

He says there is a need to put in the proper regulations to regulate property managers in order to improve the value of our property assets. There must be no conflict of interest because it involves public money, be it house owners or tenants of commercial properties, he says.

By THEAN LEE CHENG The Star

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Is property building management a professional?

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

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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