To have a well-managed and well-maintained property, one would need to have a team of people to run the day-to-day operations of managing the property to ensure that it is always at its optimum. Property owners can choose to either hire an external property management company or do it themselves.

If the management body chooses to hire a professional property management, how do they pick the right one? Do you know what their duties entail? With so many property management companies out there, what would you need to consider before appointing one as your building and property manager?

President of the Malaysian Institute of Professional Property Managers (MIPFM) Adzman Shah  Mohd Ariffin says property managers play important roles and always have to keep in mind that they represent the landlords or clients, hence they have to protect the interest of their clients.

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In doing so, property managers must therefore understand that their responsibilities include fiduciary as well as contractual duties.

“For individually-owned properties, the scope of work of a property manager generally includes ensuring the property is in good and tenantable condition or well-maintained so that it is able to fetch good market rental.

“Property managers can also manage tenancies on behalf of property owners and ensure timely collection of rents from these tenancies,” Adzman tells, adding that they must be familiar with the terms and conditions in the respective tenancy agreements and make certain that the usage of the property complies with safety and health requirements as well as building by-laws.

For stratified properties, property managers are often engaged by property developers, Joint Management Bodies (JMBs) or Management Corporations (MCs), to manage the property and maintain its common property and facilities.

“These could be residential, commercial or even retail types of property. Each type requires specific management skills due to their building features, operations and facilities,” Adzman says.

The property manager must ensure that the building and its owners comply with all related requirements, by-laws and house rules.

 Is it registered?

Adzman has observed that most JMBs or MCs often fail to check whether a property management firm is registered with the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP), before appointing one.

“If the company is not registered with BOVAEP, the non-registered company must lodge a bond equivalent to 12 months fee to the JMB/MC, as required by Act 757 or the Strata Management Act 2013,” he notes.

In order to address the lack of awareness among home JMBs and MCs, Adzman says more training must be conducted to educate newly-elected JMB and MC committee members.

“The authorities should ensure that the new JMB/MC committee members undergo training on the basics of building maintenance and management and have the certificate to show it,” Adzman says.

When a property manager slacks

In the event a property manager or management team does not carry out their duties or neglect their specific tasks, are non-performing or if they breach their contractual terms, action must be taken and the JMB/MC should give notice to the company to remedy the breach within a reasonable period.

The personnel from a registered property management company should have no reason to shirk their duties as they must be familiar with the Malaysian Property Management Standards provided by BOVAEP.

The standards act as a guideline and form the basis of the Key Performance Indicators (KPI) that a property management company sets for itself and refers to in its property management agreements or contracts, says Adzman.

“It is therefore important to read and understand the contract before signing or hiring the property manager to protect the JMB/MC’s interest,” he adds.

When selecting a property management firm, it is common for JMBs/MCs to give priority to companies that offer low management fees as they want to save cost. However, Adzman warns that doing so creates a risk of the property management company trying to make up for the lower fees by hiring unqualified personnel at lower salaries and to cut corners wherever possible to the detriment of the property and its owners/JMB/MC.

“This practice of being penny wise, pound foolish often ends with terminating the property management company midway through the contract and the JMB/MC will have a headache finding a replacement,” says Adzman.

Sometimes, there could be unethical management companies that indicate high salaries for their personnel charged back to the JMB/MC but in reality, the actual salaries paid to the staff are much lower.

It is therefore prudent for the JMB/MC to insist on seeing the payslip of the staff as supporting evidence before paying the monthly management fees and labour cost.

In case of doubt with regards to property management, the JMB/MC should consult the Commissioner of Buildings for guidance and advice. They can also email their queries to MIPFM via email at [email protected].

For complaints against property management companies, a report on the complaint can be submitted to BOVAEP for investigation.

This story first appeared in the pullout on Oct 11, 2019. You can access back issues here.

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