This article first appeared in City & Country, The Edge Malaysia Weekly on April 21, 2025 - April 27, 2025

In his keynote address at the International Strata Symposium on April 8, Minister of Housing and Local Government (KPKT) Nga Kor Ming announced that the ministry was considering introducing a new law to address the issue of poor property and building management in the country.

The symposium, held at M World Hotel Petaling Jaya (formerly Avanté Hotel), was organised by Rehda Institute, the training and research arm of the Real Estate and Housing Developers’ Association (Rehda).

Nga said the Ministry of Housing and Local Government (KPKT) had engaged several associations and interest groups to study the need for new legislation to regulate property and building management.

“Currently, property managers are regulated alongside valuers, appraisers and estate agents under Act 242 (Valuers, Appraisers, Estate Agents and Property Managers Act 1981). By establishing a new Act specifically for property managers, we aim to improve the quality of property management services in Malaysia, ensuring that the maintenance fees paid by property owners or tenants are properly utilised, such as for lift maintenance, facility refurbishment, waste collection or sewage system repair works,” he added.

Nga pointed out that there are only 594 firms licensed to practise property management in Malaysia, serving 26,334 strata schemes or 2.91 million strata units.

“In other words, [on average] each firm is responsible for managing 44 strata schemes or 4,898 strata units. This highlights a serious problem — there are insufficient licensed firms to properly serve all strata schemes, leading to poor service quality of JMBs (joint management bodies) or MCs (management corporations), as well as the proliferation of unlicensed property managers across the country,” he said.

Hence, many property owners and tenants, especially in strata schemes, face hardships due to a decline in property asset value, which is often caused by the poor and inadequate management of their buildings by “unqualified, poorly trained and dishonest property managers”, he added.

However, certain industry stakeholders have voiced their disapproval of such a proposal. According to a press statement issued by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) on April 9, the idea of setting up a new regulatory board is “regressive and unnecessary, considering the immense resources, time and effort already invested in establishing the current robust framework”.

In the statement, its president Subramaniam Arumugam pointed out that several corrective and forward-thinking measures had been implemented, such as the enactment of the Strata Management Act 2013 (Act 757), amendments to Act 242 and the inclusive governance under the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP), to address the concerns pertaining to property management.

Furthermore, he highlighted that the minister’s remarks on the current pool of 594 property management firms being inadequate to manage the more than 26,000 strata schemes as “misleading”. 

“This assertion does not reflect the reality on the ground. In practice, the number of qualified firms and professionals actively seeking property management contracts often outnumbers the actual demand from buildings requiring such services. Many strata developments are already managed under long-standing arrangements and new tenders are regularly oversubscribed. Therefore, the figures cited are not only simplistic but also highly deceptive, as they fail to capture market dynamics and actual industry capacity,” he said.

Subramaniam also said, “Reinventing the wheel at this juncture, quite frankly, is a waste of public funds. The formation of a second board will inevitably lead to regulatory duplication and confusion among stakeholders; jurisdictional conflicts between two boards with overlapping functions; uncertainty regarding the qualifications and professional recognition of thousands of graduates from local and international universities in the field of property management; and most importantly, a risk to the public interest, as there is no assurance that a new board would improve outcomes. In fact, it may erode current standards and oversight mechanisms established under BOVAEP.”

Instead, he urged the ministry to consider strengthening BOVAEP through better enforcement capabilities, streamlined registration and compliance processes, increased funding for professional training and upskilling, and stronger collaboration with the relevant authorities.

Echoing similar sentiments, Malaysian Institute of Property and Facility Managers (MIPFM) president Ishak Ismail tells City & Country that the formation of a new regulatory board could lead to redundancy and create confusion among stakeholders. He suggests that the present frameworks be strengthened instead.

“We [property managers] are well represented and we can provide ideas on how to improve the present situation. For instance, MIPFM conducts a property management induction course to better train property managers,” he adds.

Ishak notes that a pressing challenge that needs to be addressed immediately is that Act 757 allows unregistered individuals to be hired as property managers, which can lead to governance issues.

As for property management service providers, Henry Butcher Malaysia (Mont Kiara) Sdn Bhd managing director Low Hon Keong expresses his concern that the formation of a new law or regulatory body could lead to redundancy. He points out that this could lead to confusion, especially among foreign investors, in terms of governance of the industry.

“We are well aware that currently, this industry is properly governed under BOVAEP under a separate Act. This provides a sense of security and confidence for investors as the rights of strata owners are protected,” he says.

Low observes that the fundamental issue lies with the shortage of talent in the industry. “Through our engagement with universities, we realise that the number of new student intakes is dwindling. Hence, I believe local universities should enhance and continue to conduct their awareness campaigns. We should try to attract more talent to the property management industry.”

Meanwhile, Knight Frank Property Management Sdn Bhd managing director Kuruvilla Abraham says that any changes, whether to an existing Act or coming up with new legislation, must aim to address the precise shortcomings of the present regulations and their effect on the type of property or asset class.

“For example, the shortage of licensed property managers which has led to poor property management services may not necessarily be the result of a weakness in the current legislation. Rather, in my opinion as a practitioner, it is a socioeconomic matter and enforcement inadequacy,” he says.

While it has been an ongoing issue over the years, Kuruvilla notes that many stratified properties are managed well. “Therefore, the question is, why is there such disparity when the same laws apply to all segments of stratified properties?

“The segmentation by property type — that is, low-, medium- and high-end stratified properties relative to their socioeconomic group — is required and I believe that poor property management services are generally related to low and medium-low stratified properties. Any changes or new laws must focus on providing legislation and solutions to resolve the proper management of these segments of properties.”

Hence, he believes there is no need for a new law as the existing laws are more than sufficient to meet the property management requirements of all types of properties and asset classes.

“Rather than introducing a new law, additions to the existing law, which specifically caters for the low-cost segment of the property market, should be considered to ensure that all property types and asset classes are well managed, consistent with the established property management standards in Malaysia. Any new law would only bring confusion and contradictions to the property management practices in the eye of the public,” he adds.

On the other hand, Chur Associates founder and managing partner Chris Tan voices his approval of the proposed legislation. “[The number of ] property managers is increasing and their role is becoming more important. The right stakeholder, that is KPKT, should be [overseeing] this.”

In agreement with Tan, Architect Centre Sdn Bhd accredited building inspector and trainer Anthony Lee Tee opines that it is natural for the profession to be under KPKT as the developers themselves come under the ambit of the ministry, with property managers managing projects produced by the developers.

“Unlike property valuation, property management requires constant engagement. Currently, property managers are a bit out of place under BOVAEP, and in turn the Ministry of Finance [as they are not involved in appraising or valuing properties]. Property management is more suited to be under KPKT’s purview,” he says.

“In this regard, I agree with the minister’s intended announcement. After all, the COB (Commissioner of Buildings) and strata tribunals under the SMA (Strata Management Act) are under KPKT.”

When asked why KPKT is the right ministry to regulate the property management industry, Tan explains, “KPKT regulates strata developments and developers. And since developers are required to be in a property management capacity, as well under the SMA in a period prior to the issuance of the strata title or the formation of the MC. This is when there is a need for the developer to manage the property — the preliminary management period. Therefore, property management should also be under KPKT.”

Lee points out that there is an immediate need to address the shortcomings and gaps of the SMA, without having to create a whole new Act, which will be very time-consuming.

He highlights the relevance of The Edge Malaysia Best Managed & Sustainable Property Awards in this context. Held annually since 2017, the awards serve to benchmark Malaysian property management practices against the best-in-class globally. The awards have not only raised the bar for the industry but also kick-started the urgently needed conversations among property stakeholders on how Malaysian real estate can be designed, built and maintained sustainably.

“The judging criteria [of the awards] have stood the test of time. The government should participate in the awards through submission of government assets and infrastructure,” Lee suggests.

“The updating of the SMA should be done concurrently with the planning of the new law. Strata management is a big part of property management but is not all-encompassing. It is important for all stakeholders to be aligned. And as far as property managers are concerned, there is a need to continue to develop talent,” Tan chimes in, adding that property management is a long game and there should be long-term maintenance plans put in place.

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