Annual management fees for strata titles to hit RM1.2b

KUALA LUMPUR: Fees for the management of strata title residential units are expected to hit RM1.2 billion a year should contentious amendments to a real estate act be passed by Parliament.

This is due to the proposed revised scale of fees under the proposed amendments to the Valuers, Appraisers and Real Estate Agents Act 1981(VAEA Act) where a minimum of RM50 will be charged on approximately 2 million strata title residential units in the country, said Building Management Association of Malaysia (BMAM) president Datuk Teo Chiang Kok at a press briefing on Wednesday, Sept 29.

"Added to this are fees levied on commercial buildings. Even at the lowest scale of 2% of annual gross rent, these will snowball to several billion ringgit annually; a very lucrative business indeed," Teo said.

The amendments, according to BMAM, will see the exclusion of other qualified professionals as the amended Act will allow only those registered with the Board of Valuers, Appraisers and Real Estate Managers to practice property management.

This is due to amendments to Section 21 of the Act, which expands the scope of a property manager's duties to include facilities management, buildings management, general maintenance and leasing managing.

He said the amendments would prevent property owners and joint-owners — such as management corporations, joint management bodies, complex owners, real estate investment trusts (REITs) and investors — from exercising their right to choose their own property management.

"It is our collective view that the right to manage one's own property is a basic, proprietary right: this right is neither transferable nor assignable to third parties under any circumstances.

"We have no problems with qualified valuers becoming property managers as long as they compete fairly," said Teo.

Datuk Teo (second from right) and other members of the Building Management Association of Malaysia at the press briefingBMAM also objected to the proposed amendments on the grounds that they contravened the nation's economic liberalisation policies as well as the Competition Act 2010, Consumer Protection Act 1999, Building and Common Property (Maintenance and Management) Act 2007 and Strata Titles Act 1985, besides contributing to job losses and brain drain, among others.

"About 90% of properties here are not managed by valuers," he pointed out.

Building industry stakeholders, some of whom are represented by BMAM, are up in arms over the first reading of the proposed amendments, which were first brought up five years ago.

BMAM had sent a memorandum to the Finance Ministry in fervent hopes of having a dialogue session, before the second reading of the amendments on Oct 11, said Teo.
Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.