Teresa Kok

Developers homeowners oppose amendment to Act
By Ooi Tee Ching
bt@nstp.com.my

May 9 2006

PROPERTY developers and homeowners have raised objections to the proposed amendment to the Valuers, Appraisers and Estate Agents Act, 1981 (VAEA Act) that would give valuers autonomy to manage properties.

They said if the amendment were to be passed, it would create a monopoly and take away the rights of building owners to decide who should manage their properties.

“If the proposed amendment to the VAEA Act were to be tabled before Parliament and made law, building owners – whether residential, commercial or industrial – will be denied their rights to choose the best manager to manage their properties and at the most competitive price,” said Associated Chinese Chamber of Commerce & Industry of Malaysia chairman of the construction and property committee, Datuk Teo Chiang Kok.

“They will be victims of valuers,” he added.

He was speaking at a joint Press conference held by the Real Estate and Housing Developers Association, the Management Corporation/Residents Association, the Associated Chinese Chambers of Commerce and Industry of Malaysia and the Malaysian Association for Shopping and Highrise Complex Management yesterday.

Teo said if a monopoly is created, it can dampen the Government’s efforts to attract foreign investors to invest in real estate investment trusts (REITs) in Malaysia.

That’s because when building owners are forced to appoint a certain group of people who set their fees, they would add cost and squeeze the potential returns on investment to REIT subscribers.

“Where is the value-addedness in this process?” he asked.

Teo repeatedly said that the joint working committee has nothing against valuers. Rather, it opposes the creation of a monopoly for non-negotiable fees that can lead to rent-seeking practices.

The joint working committee has written to the Finance Ministry many times for a copy of the proposed amendment, but it has yet to come back with a reply.

“This issue seems to be shrouded in secrecy,” Teo said.

Management Corporation/Resident Association secretary-general S. Venkateswaran concurs, saying it not only affects commercial properties, but low- and medium-cost homeowners too.

“For low-cost homeowners living in flats, they would need to appoint property managers to manage the lifts, water pumps, corridor lighting and rubbish collection,” he said.

Venkateswaran fears the monopoly will result in valuers charging high fees and not following up on their services.

“For the same percentage, the valuers can just focus on providing services to the higher-valued properties in the commercial and industrial sector at the expense of low-cost residentials,” he said.