Contributed by Subramaniam Arumugam

I noted the recent public statement by Housing and Local Government Minister Nga Kor Ming reiterating the government’s intention to introduce a Building Managers Act and establish a separate regulatory framework for building managers.

Let me state at the outset that PEPS fully supports the government’s objective of improving strata property management standards in Malaysia. We do not dispute that poorly managed strata developments exist, that some owners face challenges with their Joint Management Bodies (JMBs) and Management Corporations (MCs) or that unregistered persons operate in the market.

The core issue is whether the government has correctly identified the cause of these problems and whether creating another regulatory board is the right solution. We respectfully believe it is not.

The 640 firms v 27,000 schemes argument is flawed

The minister has cited the figure of 640 licensed property management firms against more than 27,000 strata schemes, calculating that an average firm would have to manage roughly 42 schemes or nearly 5,000 units. While this ratio appears alarming, it does not establish a genuine shortage of property managers.

The total number of strata schemes cannot simply be divided by the number of licensed firms to determine industry capacity:

• Self-management and existing contracts: Many strata schemes are self-managed by JMBs or MCs while numerous developments already have established management arrangements.
• Firm personnel structure: A property management firm is not a single person managing dozens of properties. Firms employ registered property managers, building managers, technical supervisors and administrative personnel to handle portfolios.
• Actual market demand: The estimation does not reveal how many strata schemes are actively seeking professional management services and cannot obtain them due to a lack of available firms.

In actual market practice, qualified firms and professionals competing for management contracts frequently outnumber available tenders and new calls for proposals are often oversubscribed. Without specific data on unfilled management tenders or unserviced schemes, the conclusion that Malaysia lacks property management capacity remains an unverified assumption.

New board does not create more professionals

This fundamental point appears to have been overlooked: creating another regulatory board does not solve a manpower problem. A board regulates but does not produce human capital.

Malaysia has invested heavily in developing property management as an established academic and professional discipline over four decades. Our universities have produced over 31,700 graduates in property management-related programmes, supported by an established professional pipeline under the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP).

Furthermore, property management is already regulated under the Valuers, Appraisers, Estate Agents and Property Managers Act 1981 (Act 242). The 2018 legislative amendments explicitly provided a route for experienced building managers without formal qualifications to regularise their standing under LPEPH. The existing system has already demonstrated flexibility in accommodating experienced industry practitioners. Creating a parallel regulatory structure duplicates infrastructure without generating a single additional qualified professional.

Blurring the lines

Attempting to draw an artificial line between a building manager and a property manager creates operational ambiguity. Managing a strata building involves far more than physical upkeep like cleaning, security and lift maintenance.

A strata development requires interconnected financial management, budgeting, maintenance planning, statutory compliance, insurance oversight, sinking fund administration and risk management to protect long-term property values. Building management is an operational component within property management, not a separate profession.

Establishing two distinct regulatory bodies creates overlapping jurisdictions and confuses property owners. The practical approach is to clearly define operational roles within the established Act 242 framework, ensuring the public retains one clear line of professional accountability.

Enforce existing laws 

The minister linked the alleged shortage of licensed firms to the proliferation of unlicensed property managers. If unregistered operators are carrying out regulated functions, the solution is direct legal enforcement under existing legislation.

Our joint submission to the Ministry of Housing and Local Government (KPKT) in September 2024 highlighted that many strata management failures stem from unregistered managers and governance weaknesses within JMBs and MCs. The Mid-Term Review of the 12th Malaysia Plan recognised the need to reinstate the role of Registered Property Managers under Act 242 through amendments to the Strata Management Act 2013 (Act 757), specifically to prevent JMBs and MCs from appointing unlicensed actors. The government already possesses the identified solution: enforce existing laws rather than create a new regulatory board.

Root causes of poor strata management

Attributing every strata management failure to property managers overlooks fundamental structural challenges. A professional manager cannot resolve operational failures when:

• Property owners fail or refuse to pay maintenance charges.
• Sinking funds are severely depleted or non-existent.
• JMBs or MCs refuse to approve critical maintenance expenditures.
• Internal owner disputes stall decision-making.
• Management bodies lack basic administrative governance.

These are financial sustainability and governance problems. A new regulatory board for building managers cannot force owners to pay fees or compel JMBs to exercise proper oversight. The government should instead focus on strengthening the capacity of Commissioners of Buildings (COBs) and local authorities to address governance deadlocks.

PEPS does not argue that the current system is perfect. Meaningful reform involves fixing operational weaknesses rather than adding administrative complexity.

Creating a second regulatory board risks creating conflicting professional standards, regulatory confusion and uncertainty for thousands of property management graduates trained under Act 242.

Protecting public interest

Before introducing major legislative changes, the government should publish empirical data verifying the alleged professional deficit, including:

1. The exact number of strata schemes actively seeking professional property management.
2. The number of management contracts that went unfilled due to an absence of registered firms.
3. The breakdown of formal public complaints lodged against Registered Property Managers versus unregistered operators and JMBs/MCs.

PEPS opposes a separate regulatory structure to prevent market fragmentation and protect strata property owners. Owners who invest their life savings in residential and commercial properties deserve clear accountability, proper maintenance and transparent financial stewardship.

Malaysia does not need duplicate regulatory boards. What the sector requires is consistent enforcement, improved governance within management bodies, better-trained professionals and a clear regulatory system. After four decades of professional development under Act 242, we should strengthen the system we have built rather than fragment it.

This article was first published in StarBiz 7.

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