Owners, managers, developers — all play a role in a property’s sustainability

SEEING the value of your property nosedive because of poor management could be an investor’s worst nightmare. And in order to avoid such a tragedy, property owners need to know their rights and responsibilities in the management of their properties.

This was the key advice given by members of a panel discussion entitled “An investor’s nightmare” held at TheEdgeProperty.com Symposium on Property Management 2017 recently.

On the panel were Building Management Association Malaysia (BMAM) president Tan Sri Eddy Chen, Architect Centre accredited building inspector and trainer Anthony Lee Tee and Malaysian Institute of Professional Property Managers (MIPPM) president Sarkunan Subramaniam. The discussion was moderated by TheEdgeProperty.com managing director and editor-in-chief Au Foong Yee.

The half-day symposium themed “Is your investment a time bomb?” on April 8 was organised by TheEdgeProperty.com, with partners Nippon Paint Malaysia and Panasonic Malaysia. It was supported by The Edge Malaysia while the supporting sponsor was Gamuda Land.

During the panel discussion, Lee noted that one critical aspect of property management is to ensure a property is safe for its residents or occupants. The condition of a property, both interior and exterior, is often neglected and this could have a severe impact on its residents.

As an experienced building inspector, Lee estimates that one in five of the buildings in the country are unsafe through hidden dangers such as faulty wiring, lack of fire safety standards, or broken glass fittings. The estimate is based on property inspections by Architect Centre from 2008 to 2016.

“Besides building defects, it is important for owners to take the initiative to understand what the hidden risks are in their homes, such as the type of electrical switches they are using,” he said.

MIPPM’s Sarkunan emphasised the benefits of employing professional property managers who could provide specialist services to property owners in the upkeep of properties.

He noted that the safety aspects of a building could be addressed with the assistance of a property manager, as the property manager will assign its staff to inspect every service and facility in the building to ensure everything is safe and in good condition. A good property manager can help enhance and prolong the life cycle of the building.

“From my observation, some developers have already engaged property management companies as consultants at the design stage to look at issues that might have been overlooked by the architects. This is a positive development,” Sarkunan noted.

BMAM’s Chen concurred that a well-designed building is the key to value enhancement of a project which also brings good returns for investors.

“The design of a building needs to take the property’s future maintenance into consideration. You can build a huge tower and a lush landscaped garden but the problem is that the cost of maintenance may be high. Between aesthetics and sustainability, designers need to find a balance,” he stressed.

However, Chen also noted that there is no design template where “one size suits all” as property developers also need to take into consideration the location, needs of the local buyers, as well as the type of products they want to develop.

Collections vital to a property’s maintenance

On what can contribute to successful property management, all the panellists agreed that adequate service charge collection is a major factor in ensuring a building is well maintained, which in turn sets the foundation for the property’s value to be maintained or rise in the long run.

Chen said the level of service charge collection has direct impact on the level of maintenance of a building.

“There is no excuse for people not to pay the service charge in a strata property. From my observation, many strata properties are in a rundown condition due to poor collection. It is very hard for the property manager to manage the building well without a healthy financial status,” he added.

With the emphasis on cost, many property owners tend to look at the cost incurred in hiring a professional property manager instead of focusing on how the property manager can provide quality management and services, said Sarkunan.

According to a recent survey by MIPPM, the management of some 70% of condominiums and apartments in Malaysia are considered to be “below par”.

“Do bear in mind that well-managed projects will certainly have more value compared with those that are poorly managed even though they are both located in the same area, or are of similar size and age,” he said.

Sarkunan advised property owners, developers and property managers involved in property management to work hand-in-hand to “kill the ugly, educate the bad and emulate the good” as a badly managed property could have a negative impact on all three parties.

Architect Centre’s Lee also stressed the importance of owners’ participation in property management, such as attending management meetings and exercising their power to correct problems by voicing out their concerns during meetings.

He noted that although a good property management starts from a well-designed and safe building, the future upkeep of the building is in the hands of the owners and property managers.

This story first appeared in TheEdgeProperty.com pullout on April 14, 2017. Download TheEdgeProperty.com pullout here for free.