By Professor S. Venkateswaran, secretary-general, Building Management Association of Malaysia
I READ with interest Zakay A. Rehman's views on the proposed Strata Management Act (NST, Sept 3). Zakay has explained the issues relating to the subdivision, and eventual delivery, of strata titles to owners by developers.
I would like to highlight the difficult and controversial issue of the management and maintenance of stratified properties, particularly flats, apartments and condominiums.The Building Management Association of Malaysia (BMAM) is the only multi-stakeholder organisation (established in 2009) representing the interests of chambers of commerce, developers, engineers, architects, shopping and high-rise complex managers, management corporations, joint management bodies and managing agents.
Though BMAM represents a diverse range of stakeholder interests in the building industry, it was not officially invited to participate in workshops and discussions held by the National Land Council and the Housing and Local Government Ministry when the contents of the draft bill were deliberated.
The government has bypassed and deprived BMAM of the opportunity to deliberate on the bill's contents, though the implementation of the act will bring about consequences that will affect BMAM member organisations.
Such an approach is not consistent with Prime Minister Datuk Seri Najib Razak's 1Malaysia concept, in which stakeholder consultations are required to be held before government policies are formulated and implemented.
According to the information available to us, the bill states that only licensed 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) will be permitted to manage and maintain stratified, or subdivided, buildings as managing agents.
No such restrictions exist in 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 valuers. The joint management bodies (JMBs) and management corporations (MCs) want to have the independence and opportunity to appoint any fit and proper person, or entity, as managing agent on a willing seller-willing buyer basis.
The bill, by restricting building management and maintenance to valuers, would create a mo-nopoly, and be open to abuse and rent seeking. Such an unhealthy practice is inconsistent with the spirit of the Competition Act, 2010 which discourages the creation of monopolies.
Though building owners (JMBs and MCs) and real estate investment trusts (REITs) have been exempted from this ruling, it should also be noted that most JMBs and MCs, which are 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 admitted under Section 21(1)(a) of the VAEA Act as a managing agent.
JMBs and MCs are required to pay a minimum of RM50 per unit as management fee to a registered property manager in compliance with their fee schedule, excluding other operating costs such as staff salaries, electricity, water, cleaning and security.
Most JMBs and MCs will soon become bankrupt if the SMA Act insists that only registered property managers can be appointed as managing agents.
We will soon see the mushrooming of more urban stratified slums and ghettos, thereby defeating the goals of the government's squatter resettlement programmes and public housing projects.
The fiduciary responsibilities of MCs and JMBs have been stated in the ST Act and the BCPMM Act on the management of the building maintenance fund and the sinking fund.
These have to be audited every year and presented for approval at the annual general meeting.
The managing agent appointed by JMBs or MCs to manage and maintain the subject properties is required to only perform these functions for and on behalf of JMBs or MCs. Of what relevance is a registered property manager in this context?
If managing agents were to belicensed valuers, can they guarantee the maintenance and management of the buildings, given the fact that property valuers cannot be considered as having been trained in the multi-disciplinary functions of building and facilities management compared with, say, engineers, architects and project managers?
MCs and JMBs do not need property management. They need only 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, why would JMBs and MCs need registered property managers at such a high cost to owners?
Many non-valuer managing agents have years of experience in building and facilities management.
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.
They are qualified and eligible to undertake building and faci-lities management as managing agents.
Any attempt by SMA to split managing agents as valuers and non-valuers will be detrimental to the growth and development of the building management industry.
Such a measure will result in the loss of management talent.
It will also have serious social implications on the career mobility of local building managers, particularly so when Malaysia's building industry needs more qualified and experienced building managers to manage and maintain sophisticated high-technology buildings.
The commissioner of buildings (COB) should be the sole regulatory body to supervise and oversee the management and maintenance of stratified buildings.
The involvement of third parties, who have no ownership interest in the subject properties, will not only erode the COB's authority but will also result in layering, additional costs corruption, rent seeking and abuse of power.