Amended Bill may lead to illegal property managers

Several groups representing licensed property managers have called for the withdrawal of an ad hoc amendment to the Strata Management Bill 2012 they say would 'de-regulate' the industry.

PETALING JAYA: Several groups representing professional property managers are against the “last-minute” amendment to the Strata Management Bill 2012 .

The Bill was recently proposed by Housing and Local Government Minister Chor Chee Heung.

The Bill is supposed to govern the maintenance and management of buildings and common property of subdivided buildings and lands.

The groups are namely the Malaysian Institute of Professional Property Managers (MIPPM), Royal Institution of Surveyors Malaysia (RISM) and Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sectors of Malaysia (PEPS).

They want Parliament to withdraw this amendment, saying that it could potentially put house buyers and owners at risk of unscrupulous and “illegal” property managers.

The specific amendment in dispute, under Section 2 of the Bill, is the redefinition of the term “registered property manager” to allow for them to be appointed by parties including developers, joint management body, management corporation and management committee.

This, they said, would essentially allow any “Tom, Dick and Harry” to be licensed property managers, which goes against the spirit of the Bill, which is to better regulate the industry.

The Bill, which has gone through two readings last month in the Dewan Rakyat, is scheduled to be passed this session.

“We took three years of vigorous and stringent drafting in order to safeguard the interests and rights of the house buyers and parcel owners.

“But the housing ministry only took one week to reverse it by amending the bill to include this new term and now anyone can be a property manager.

” So simple? You can now continue to appoint cronies,” MIPPM president Ishak Ismail told a media briefing today.

Very detailed and explicit

“The problem is that this little group of people with an agenda have convinced some of the Mps; now they are divided, we’re here to tell you the facts,” he said, declining to name the opposing group.

The new Bill is supposed to replace the repealed Building and Common Property Maintenance and Management) Act 2007, which was “plagued with loopholes and shortcomings”.

Aside from the amendment in question, Ishak said that the proposed Act was “good”, adding that the draft was “very detailed and explicit”.

The current problems caused by illegal property managers, he said, include poor maintenance, embezzlement of fund, overcharging, monopoly by developers, manipulation of accounts, property management by unqualified people, and so on.

“We realise why they are objecting to being regulated: they don’t want to be accountable to any independent body; they can charge unsubstantiated fees, and award contracts to friendly parties, and can easily open up RM2 companies,” he said.

Under the new Bill, licensed property managers would come under the Board of Valuers, Appraisers and Estate Agents (BVAEA), the existing statutory regulatory board under the Finance Ministry. Since 1984, BVAEA has issued licences to the registered property managers in Malaysia.

Registered property managers are to adhere to the Malaysian Property Management Standards or could have their licences suspended if there are complaints.

“Registered property managers provide indemnity to the house buyers and parcel owners through their professional indemnity insurance, fiduciary duties, transparency and accountability and also the scrutiny and regulatory control by BVAEA,” Ishak said, adding that the BVAEA also controls the scale of fees.

Opening a Pandora’s Box

Today, several newspapers reported that the Building Management Association of Malaysia (BMAM) is lobbying to get the term “property manager” amended to “building manager” in the Strata Management Bill.

BMAM president Teo Chiang Kok claimed that the new bill would put the property management industry under the monopoly of licensed valuers.

BMAM, which was not consulted during drafting stage, had said that if the bill was gazetted, about 80% of joint management bodies (JMBs) would end up jobless.

When questioned about BMAM’s claims, RISM vice-president Adzman Shah Mohd Ariffin said that it was unfair to call it a monopoly.

“While to others it is business, for us it is a profession. Is it fair to say that architects, engineers, and lawyers are monopolising the industries they specialise in?”

Adzman also explained that there was the misconception that valuers are being given the monopoly, when in fact property managers and valuers fall under the same vocation.

“When you study for a degree, you learn both about valuation and property management.” he said.

When asked if the legislation, which requires registration of property managers, would cause a shortage of property managers, licensed or not, Ishak said that there would be a proposed “window” period of one year whereby the BVAEA would evaluate and allow existing unlicensed managers to be registered.

Ishak also said that the amendment would affect the 420 graduates who take up Estate Management Degree and Property Management.

He estimates that as of 2011, there are some 13,000 strata title properties with 4.1 million residents with about 50% having joint management bodies or committees. Of licensed property managers, there are about 5,000 currently.

Ishak warned that if Parliament passes the law as it is, the government could end up opening a Pandora’s Box, “unleashing” more unscrupulous and unaccountable illegal property managers.

This would “perpetuate the existing tyranny of unscrupulous developers masquerading as property managers through management companies”, he said.