Q.
What is new about the VAEP Act 1981 on Property Management?
A.
Some areas of changes have been made to estate agency practice. Please see my earlier post here for VAEP Act amended 2017.
There is a totally new part called Part VB for Property Managers.
Actually, the original law had only Part V for Valuers and Appraisers. Then, as the estate agents were incorporated, it was inserted Part VA. Now, Property Managers is inserted as Part VB.
On a whole Part VB spells out the definition of Property Manager, registration of property managers under the Act, the qualification and registration of the probationers and practice by firm, etc pretty much similar in standard of requirement like that of Valuers and Estate Agents.
As there is critical needs of the profession* hence, the Board is introducing the liberalization exercise so that more property managers can be registered and regulated under the Act. There is a 12 month period where any practicing PM can get themselves registered without having to sit for examinations. Details of the conditions please refer to the Amended VAEP 1981 or LPPEH website.
Here, what is important is the scope of Property Management.
In the new Part VB, there is a S.22I which has this spelled out:
S.22I (2) The property management practice referred to in subsection (1) includes the following:
(a) enforcing the terms of leases and other agreements pertaining to the property;
(b) preparing budgets and maintaining the financial records for the property;
(c) monitoring outgoings for the property and making payments out of the income from the property;
(d) advising on sale, purchase and letting decisions;
(e) advising on insurance matters;
(f) advising on the opportunities for the realization of development or investment potentials of the property;
(g) advising on the necessity for upgrading the property or for the merging of interests;
(h) managing and maintaining the building and facilities attached to the building; and
(i) making or checking of inventories of furniture, fixtures, trade stocks, plant or machinery, or other effects.
Similar to S.22C on Restriction on Estate Agency Practice, S.22J is specific on Restriction on Property Mangement Practice.
S.22J (2) Paragraph (1)(b)# shall not apply to owner of any land, building and any interest therein who manages such land, building and interest.
#(1)(b) act as property manager;
Which means the profession of property manager is regulated to the below conditions:
Unless registered as a Property Manager,
(a) one cannot call himself a "Property Manager", "Managing Agent" or the equivalent thereto...
(b) act as a property manager
(c) carry on business or take up appointment or engagement as a property manager
(d) display any signboard or poster, or use, distribute or circulate any card, letter, pamphlet, leaflet, notice or any form of advertisement, implying...
(e) undertake for a fee or other consideration any of the work enumerated in S.22I (2) above,
(f) be entitled to recover in any court any fee, ...
The Register for Property Manager is created to be Part IV whereby Part I (Valuers), Part II (Appraisers), Part III (Estate Agents) and Part IV (Property Managers).
As it is to preserve the influence and positions of the Valuers and Appraiser, the new amended VAEP allows Valuers and Appraisers who were already in the Part I and II of the register be entered into Part IV. This simply means Valuers and Appraiser who are existing as of the new amendment are automatically property managers as well.
This is covered in S.22F of the VAEP Act 1981.
S.22F Registration of property managers
(3) Any registered valuer or registered appraiser who, immediately before the coming into force of this Part, had his name entered under Part I or II of the Register shall, upon the coming into force of this Part, be entitled to have his name entered under Part IV of the Register without payment of any fee.
However, it is not so easy for Estate Agents. In Subsection (1A) of Section 22B, no registered estate agent shall carry on property management. Nevertheless, subsection (2) has some allowance that a registered estate agent, if approved by the Board, can practice property management under certain conditions.
Now, in the amended Act 2017, the subsection (6) under S.22F (Registration of PM) is included as below:
(6) Any registered estate agent shall be entitled to have his name entered under Part IV of the Register if before the date of the coming into force of this Part he was permitted to undertake property management as specified in S.22B (2).
Which means, if a registered estate agent was previously allowed to practice Property Management by certain condition, he is now allowed to be a fully Registered Property Manager in Part IV.
As for the liberalization exercise, anyone who has been practising prior 12 months from the date of the coming into force this Part for registration (S.22F), shall be entitled to have his name so registered if conditions are fulfilled.
How to qualify?
S.22H which is a mirror of S.22D (EA) and S.18 (V), spells out the qualification to be registered as PM. Similarly, there are two ways, one is by having a degree recognized and another by passing the board Property Manager Examination.
The Act mentions about the probationer called Probationary Property Manager, who is required to obtain the practical experience and to pass the Test of Professional Competence prescribed by the Board or any equivalent (RISM). There is however, no mention of the length of practical experience like the case of PV S.18 (3) and PEA (S.22D (3) as this is specified in the VAEA Rules, 1981.
At the time of writing, I have not read the new VAEP Rules, 1986 so I do not know how many years is the requirement of practical experience for PPM. I would assume it is 2 years like that of PEA.
*Critical need of property managers. Refer to the article "Property managers given a year to register with BOVAEP" published in Malaysian Reserve on 12 January, 2018, extracted below.
She (Deputy DG Dr Zailan Mohd Isa - Valuation and Service Department) said currently 5,000 professionals in the business are still not registered.
“We want to ensure that after the timeframe given, all of them would conform to the Act,” Zailan said, adding that only 1,200 practitioners are already registered.
BOVAEP board member Kamaruzaman Jamil said that unregistered practitioners who fail to comply within the stipulated timeframe can be fined up to RM25,000 and barred from practising within the industry.
“The process to be part of the Act over the 12-month period would also be significantly flexible compared to the normal procedures, which are more stringent.
“I’d like to urge practitioners to come forward and be part of the Act to avoid any unwanted circumstance,” he said.
Last year, only 10 claims on mismanagement and malpractice by registered property managers were directed to BOVAEP, while 116 cases involved illegal practitioners.
To date, at least 19,000 strata schemes are available throughout Malaysia, benefitting 7.5 million people, or 30% of the total urban population.
Ref:
Valuers, Appraisers, Estate Agents (Amendment) Act, 2017.