By IZZAT RATNA / Pic By TMR
Property management companies are reeling as the increasing number of vacant condominium and apartment units has left these firms cash-strapped to administer the housing facilities.
Property consulting firm Knight Frank Malaysia MD Sarkunan Subramaniam said property management companies are faced with a sizeable amount of unbilled maintenance and management fees.
He said due to the glut of strata units, some developers have resorted to lowering the service charges to clear their unsold properties and as a mean to attract buyers.
“This has resulted in the entire projects not being able to function at full efficiency when they are completed,” he said at the sidelines of the Malaysian Institute of Professional Property Managers (MIPPM) Property Management Conference 2017 in Kuala Lumpur yesterday.
Strata title property owners must pay a designated maintenance fee to ensure the upkeep of the facilities. The rise of completed and unsold properties and the low-rental occupancy had forced developers and owners to neglect their maintenance payments, leaving the companies appointed to manage the facilities to face the financial strain.
Owners of unoccupied properties are hard-pressed to service their maintenance fees as they are not generating income from the empty units.
Sarkunan, who is also the president of the MIPPM, said developers should be held accountable under the Strata Management Act to pay the service charges.
He said based on the existing laws, developers are prohibited from handing over liabilities to the buyers and should service the fees similar to any other owners, or face action under the law.
“Currently, we have a situation that the condominiums that we manage comprise of 30% to 40% of unsold stocks within the overall development,” he said.
He also urged potential buyers to be cautious in their purchase involving a new project to avoid problems on charges on services and maintenance.
“If you are buying into a project, buyers must ensure that the development is built by a reputable developer that is able to pay their service charges despite the unsold units,” he said.
The failure to pay for the maintenance fees may result in the said properties not being able to function at full efficiency.
“The monitoring aspect of defect liabilities would also burden buyers,” Sarkunan said. Deputy Minister of Finance Datuk Lee Chee Leong officiated the MIPPM Property Management Conference 2017, said the property sector is expected to be the next industry to confront digital disruption as property websites employ artificial intelligence (AI) and virtual reality.
He said AI will transform every stage of home purchases and deliver end-to-end services that are currently being offered by agents.
“By 2020, it will have both altered the economics of entire subsectors of the industry, and change the way real estate developers and the investment community operate.
“Driven by rapid urbanisation and tech-savvy population, and with government’s strong support of innovation and entrepreneurship, I believe Malaysia can play an important role and take lead in the digital transformation of the real estate industry and perhaps become a hub for PropTech (property technology) in the coming years,” he said.