Reader’s Letter: Policy analysis on property management-building management issue

• In what way could a new unproven board offer solutions when Rehda and PPK members are already admitted as registered property managers under BOVAEP and its representatives are board members of BOVAEP?

The current debate on the property management-building management issue can be examined from the public policy perspective. The proposal to establish a rival regulatory Board of Building Managers (BOBM) versus the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP) by the Ministry of Housing and Local Government (KPKT)  impinges on public policy affecting the property management industry.

Public policy refers to the decisions, actions and programmes implemented by governments to address societal issues or achieve specific goals. The creation of a new regulatory board is a deliberate government action aimed at influencing behaviour, regulating industries or protecting public interests. It falls within the purview of public policy as it involves the formulation and implementation of rules and regulations that have significant implications for society. The affected stakeholders are the graduates of property management, strata property owners, tenants, occupiers, joint management bodies (JMBs), management corporations (MCs), property management professionals, professional bodies, etc.

The establishment of a rival regulatory board, while intended to address certain perceived shortcomings, can also introduce new challenges and weaknesses. Here are some potential drawbacks:

1. Increased costs and inefficiencies

With a significant overlap between the functions and roles of property management and building management, the two bodies may duplicate their regulatory efforts, leading to increased costs for both agencies and the professional practice they regulate.

The two different boards may adopt conflicting or overlapping regulations, creating confusion and uncertainty for the practising professionals, strata management bodies, Commissioner of Building (COB), etc. Why reinvent the wheel when the current regulatory system has already been in place since 1981?

Competition between the two boards can lead to bureaucratic conflicts and a lack of cooperation, hindering effective regulations with dire consequences on the well-being of strata owners, tenants and users.

2. Regulatory capture

The new regulatory board itself could be captured by special interests or specific industry groups, thereby defeating the purpose of its creation. The proposal on BOBM is led by developers with vested interest and the proposed board smacks of conflicts of interest. In contrast, BOVAEP is a semi-statutory body supported by the Federal Department of Valuation and Property Services, the National Institute of Valuation (Inspen) and National Property Information Centre (Napic). As a public body, the impartiality of BOVAEP is clear. Why is there a need to transfer some of the property management functions of a public entity to a new board which is controlled by the private sector, especially developers?

3. Undermining public trust

The existence of two regulatory bodies can create confusion and uncertainty among the public, eroding trust in the regulatory system introduced by the Government. The perception of duplication and inefficiency can lead to a loss of public confidence in the government's ability to regulate effectively.

4. Regulatory overreach

The creation of a new regulatory board could lead to increased regulatory burdens on JMBs and MCs. The professionals and management committees of strata properties will need to report to two boards.

With building management being a subset of property management, the two agencies may have overlapping jurisdictions, leading to conflicting regulations and unnecessary monitoring costs resulting in inefficiencies and waste of public funds.

The unnecessary competition between professionals will stifle growth and innovation in the property management industry hindering the competitiveness of the real estate industry in the Asian region.

5. Political motivations

The establishment of a rival regulatory board could be motivated by political considerations rather than genuine concerns about regulatory effectiveness. Political motivations may lead to short-term policy decisions that do not address the root causes of regulatory problems. It is questionable why the Real Estate and Housing Developers' Association Malaysia (Rehda) and Malaysia Shopping Mall Management Association (PPK), having been board members of BOVAEP since 2018, need to request for the establishment of a separate new board while suggestions and recommendations from them could have been offered for deliberations and implementations by BOVAEP for the well-being of the industry. 

6. Unproven to be effective

The creation of a new regulatory board may simply reinforce existing problems or create new ones, rather than addressing the underlying issues. The new agency may be constrained by the same factors that have limited the effectiveness of the existing regulatory regime. In what way could a new unproven board offer solutions when Rehda and PPK members are already admitted as registered property managers under BOVAEP and its representatives are board members of BOVAEP?

Weigh drawbacks against benefits

In conclusion, while the establishment of a rival regulatory board may be seen as a potential solution to certain regulatory challenges, it is important to carefully consider the potential drawbacks and weigh them against the expected benefits. A more effective approach may be to reform the existing regulatory system or to create a more collaborative and coordinated regulatory framework, which the current BOVAEP is practising with an inclusive approach.

Prof PMgr Dr Ting Kien Hwa
Department of Real Estate
Faculty of Built Environment
Tunku Abdul Rahman University of Management and Technology (TAR UMT)
Jalan Genting Klang, 53300 Kuala Lumpur
Malaysian Institute of Property and Facility Managers (MIPFM) deputy president 
Tel: 012-666 1630
Email: [email protected]

Read also:
Property manager vs building manager — Are they the same?
No need to reinvent the wheel for property management practice in Malaysia
Reader’s Letter: Stricter regulation needed in property management
Reader’s Letter: Troubleshooting the law around property management in Malaysia
Value of professional property management — education, expertise, accountability

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