Surveyors tick off opposing group
19/09/2005 The Star By S.C. Cheah

THE Institution of Surveyors Malaysia's (ISM) property consultancy and valuation surveying section and the Association of Valuers and Property Consultants in Private Practice Malaysia (PEPS) have hit out at the groups opposing the amendment to the Valuers, Appraisers and Estate Agents Act 1981 (Act).

In a joint memorandum supporting the opening of a third register for property managers, they chided the following opposition groups:

Malaysian Association for Shopping and Highrise Complex Management (PPK): The memorandum said individual PPK members ought to be happy that the Board of Valuers, Appraisers and Estate Agents (Board) is opening up the management profession to them as they can apply, within a year, to become property managers, either as full-fledged property managers or confined to certain areas depending upon proof of their areas of expertise.

It said firms which the PPK members set up to provide property management could secure professional indemnity insurance because they could show to insurers that they were registered persons. Professional indemnity insurance would protect them from unfounded professional negligence suits and protect their clients from any professional negligence.

It said that PPK's objection to the amendments and its request that the present provisions in the Act be withdrawn made it seem that PPK was inviting any individual or group of persons in Malaysia, from any walk of life, to provide property management services. If PPK favours a “free-for-all” environment, it asked, why continue with the PPK as an organisation that also favours adherence to standards as a key to upgrading the profession?

It said that even in countries that did not overly regulate the professionals, there were “glass edifices” that did not permit a free for all.

“For example, in Britain, any person can undertake a valuation for a fee, yet the societal and business environment is such that no one will go to a non-valuer for such a service,” it claimed.

It also rejected PPK's argument that the Board should also designate shopping centres as a property-based business just like it did for hotels.

It said hotels were truly “property-based businesses” as there was no monthly rent, service charge or sinking fund to collect from tenants and be accountable to them.

The memorandum also asked PPK what solutions the latter was willing to offer for the large number of low and medium-cost apartments and flats that required professional property management as it noted that PPK individual members' usual areas were “meaty” shopping centres, office and condominium buildings.

“They ought to be aware that in many of the known cases of property mismanagement, it was valuation firms that came to the rescue to take over as fresh property managers and try to repair the damage done by the developer's property management subsidiary companies acting as in-house property managers,” it said.


The Associated Chinese Chamber of Commerce & Industry Malaysia (ACCCIM) property & construction committee: PEPS and ISM said they were surprised that ACCCIM was involved in the matter as in the past it did not have a history of interaction with the Board on the Board’s regulation matters.
On ACCCIM's contention that valuers had failed to provide the required level of property management, necessitating the Westfield group from Australia to undertake the shopping centre management for Suria KLCC, it said Westfield came not purely as property managers but also as an equity participant.

It said both Westfield and Lend Lease (both active in retail consultancy in Malaysia) were heavily staffed with valuers and asset managers.


Real Estate and Housing Developers' Association (Rehda): Rehda should confine themselves to being good property developers and not try to become property managers, said PEPS and ISM.
“Whilst some of the projects may necessitate their continued stay in order to ensure their promised goals to purchasers, any attempt to undertake property management, defined as managing completed properties for the public for a fee should be left to professional property managers,” it said.

“If heavy regulation is needed for the property industry, why should the property management industry not be regulated?”

The memorandum also described as “astounding” the group's contention that property management is a business and not a profession.

“Throughout the Commonwealth, it is regarded as a profession. By their (PPK's) actions in attempting to have a certification course for shopping centre management, they are in fact attempting to have some form of regulation.”

The memorandum said the Securities Commission required that property trusts in Malaysia could only be set up if, among others, they had their properties professionally managed.

It said that an important edifice in the build-up to good corporate governance in the property trust industry in Malaysia would be lost if the property management industry was deregulated.

It would also be an “enormous step backward” as the real estate investment trust, property trust and property-based securitisation industries were making tentative steps, in line with overall government policy, to broaden the investment horizons in Malaysia.

PEPS and ISM feel the Board should continue to regulate the property management profession to ensure its continued growth.

They also urged the Board to book all those who infringe the Act, Standards as well as the Valuers, Appraisers and Estate Agents Rules 1986.