No monopoly in management

THE Federation of Malaysia Consumers Associations (Fomca) strongly opposes the monopoly of property management by those registered under the Valuers, Appraisers and Estate Agents Act.

This will have a detrimental effect on consumers through higher prices and not necessarily better service quality of management.

Firstly, any house owner or joint management body or management corporation should have the authority to make the best decision for the management of the property based on the principle of the open market, that is a willing buyer and willing seller.

Any attempt to remove this right to make decisions in the best interest of their property is a serious violation of the right of consumers to choice based on their best interest.

After all it is the property holder’s money and he should have the right to make the best decision in his interest.

Secondly, Fomca has still to understand what value the valuers bring to property management that will have a positive impact on consumer protection or consumer welfare.

Property management is a management function; as such one has to show competence in management, rather than paper qualifications to validate one’s capacity to manage properties.

Thirdly, the number of valuers especially involved in property management compared to the actual number of buildings and individual households is very small leading to the highest possibility of rent seeking, whereby the registered valuers would focus on high-value buildings and properties, leaving the current systems in place for a fee.

In other words back to where we are now; the difference being certain parties will be collecting fees.

Thus, the consumers will be paying higher fees, with no increase in value for the quality of the management of their properties.

Yet, the unregulated property management in its present form cannot be allowed to go on. There appears to be no controls and standards.

Fomca fully supports the House Buyers Association for the need of greater regulation to enhance higher safety and quality standards in property management.

It fully supports the establishment of a regulatory body under the Housing Ministry, where housing and property development is placed. Either the functions of the Commissioner of Buildings need to be enhanced and strengthened or a new Regulatory Board on Property Management needs to be established.

The board should have legislative powers to regulate the property management industry, set standards for management, have investigative and enforcement powers as well as powers of prosecution to ensure compliance with the laws and standards set.

On issues of safety and other critical issues, the standards can be made mandatory, instead of merely voluntary.

Only through a strong regulatory framework supported by an open and fair market, without any anti-competitive or collusive behaviour on price fixing, can consumer protection and consumer welfare be enhanced. - The Star

DATUK PAUL SELVA RAJ
Secretary General, Fomca