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Saturday, November 20, 2010

Opposition to changes in property law

VAEA amendments deemed unfair to owners

FOR owners and occupiers of stratified buildings, their biggest concern is whether the building they own or occupy will continue to be managed properly after the strata titles are issued and the management of the property is handed over to the joint management body or management corporation. Buildings that are properly maintained and managed usually are better sought after and can fetch higher capital appreciation and rental.

The maintenance and management of common property in all stratified buildings are governed by three laws the Housing Development (Control and Licensing) Act 1966 (HDA), the Strata Titles Act 1985 (STA) and the Building and Common Property (Maintenance and Management) Act 2007 (BCP).

The three Acts are specific laws relating to the maintenance and management of common properties in a strata scheme.

In all these three acts, the people who can be appointed to carry out the maintenance and management of the common properties are a qualified person or agent (HDA), agents and servants as it thinks fit (STA) and any person or agent (BCP) .

While the three laws do not compel the appointment of valuers to maintain and manage common properties, the proposed amendments to the Valuers, Appraisers and Estate Agents Act 1981 (VAEA) compel all property managers to be valuers.

Datuk Teo Chiang Kok says practically all properties in the country are currently not managed by valuers.

Building Management Association of Malaysia president Datuk Teo Chiang Kok says practically all properties in the country are currently not managed by valuers.

There are tens of thousands of persons engaged by landlords and as managing agents involved in property management. These practitioners collectively have years of experience and have proven track record, expertise and competencies in all aspects of property management, he says in an interview.

But their rice bowl may be affected if the proposed bill to amend the VAEA into the Valuers, Appraisers and Estate Agents (Amendment) Bill 2010 create an absolute exclusivity and monopoly for valuers to be the only ones allowed to undertake property management.

The liberalisation proposed will result in only valuers becoming the controlling parties.

The amendments pertaining to property management are contained in two embedded clauses in the proposed Bill.

According to Teo, these amendments seek to usurp the rights of owners and the Commissioner of Buildings (COB), and conflicts with the intend and functions of the joint management boards as provided for in the BCP (Act 663).

They also usurp the rights of owners and their management corporations and conflicts with the provisions of the STA (Act 318) that allows for the establishment of management corporations, Teo adds.

Teo says the STA and the BCP expressly allow property owners or legally incorporated entities or the developers the rights and responsibility to act as property managers to maintain and manage the properties, and to also appoint managing agents to perform property management and related services.

There is no requirement whatsoever in these Acts that these managing agents must necessarily be valuers, nor are there any related references in this regard in the VAEA.

The Commissioner of Buildings established under Section 3 of the BCP has already been vested with the necessary powers and authority to oversee and regulate property management. The proposed amendments to Section 21 of the VAEA Act would be in conflict with the BCP and the COB, he explains.

Teo points out that the amendments that seek to give valuers the exclusive monopoly to property management and create a closed-shop rent-seeking occupation, are definitely unfair terms of trade which The Consumer Protection Act seeks to prohibit and directly affronts the objectives of The Consumer Protection Act.

The amendments are also in conflict with The Competition Act which seek to ensure the economy and business sector are not distorted in favour of monopolies and oligopolies, he adds.

Teo explains that the inclusion of property management as a function that can be performed by valuers was added into the Valuers Act by way of an amendment in 1997.

The main reason for this introduction was to prevent foreign valuers to practise valuation in Malaysia under the guise as property managers.

We feel the valuers' concept of liberalisation is not altruistic as made out to be, but self-serving. Currently only valuers can be partners and shareholders in valuation firms. The liberalisation proposed is to allow non-valuers to own up to 49% of a valuation firm and only valuers can be the controlling partners or shareholders.

This liberalisation move is to allow valuation firms to grow faster than organic growth by inviting minority investors in preparation for the onslaught of foreign valuation firms coming into the Malaysian market. It is not addressing the multi-disciplinary and inclusive nature of property management, he adds.

Following a meeting between the BMAM members, the Board of Valuers, Appraisers and Estate Agents, Institution of Surveyors Malaysia, and Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia with Deputy Finance Minister Datuk Dr Awang Adek Hussin on Oct 18, all stakeholders involved in property management have agreed to withdraw the proposed amendments pertaining to property management from the Bill and a moratorium imposed on the implementation and enforcement pertaining to property management in the Act.

Teo says this is to allow industry practitioners to carry out a holistic review to develop and agree on a structure that is inclusive, fair, equitable and acceptable to all parties.

By The Star

1 comment:

Anonymous said...

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