KUALA LUMPUR (Jan 19): A strong Management Corporation (MC), a healthy maintenance budget and simplified design are among crucial elements to ensure that a property’s condition would be tiptop. This was shared during the “Fireside Chat: Costly to Judge a Book by its Cover” at The Edge Malaysia Property Management Virtual Talk 2024, which was held at Common Ground, Wisma UOA Damansara II in Kuala Lumpur on Friday.
Attended by 210 participants, The Edge Malaysia Property Management Virtual Talk 2024 is a two-day virtual talk to be held on Jan 19 and 20.
Presented by City & Country, the property pullout of The Edge Malaysia weekly, the virtual talk is supported by the Association of Property and Facility Managers, Architect Centre Sdn Bhd, Building Management Association of Malaysia, Institute of Landscape Architects Malaysia and EdgeProp Malaysia, with Nippon Paint as its main partner.
Friday’s virtual talk, titled “From Hero to Zero: Buying Ill-Designed Strata Commercial Property”, featured two sessions hosted by Chur Associates founder and managing partner Chris Tan and Architect Centre Sdn Bhd accredited building inspector and trainer Anthony Lee Tee, respectively.
The fireside chat session was moderated by The Edge Malaysia editor emeritus Au Foong Yee and featured Tan, Lee and Rehda Malaysia president Datuk NK Tong.
In Tan’s session titled “Legal Nightmares”, Tan raised the issue of the inadequacy of the existing statutory regime, as well as the dynamics of the judicial interpretation.
He noted that both the Strata Title Act 1985 and Strata Management Act 2013 are due for a review to catch up with the evolving property development trend, especially for mixed-use developments. He added that there is also a need in defining the permitted property usage to catch up with new circumstances such as Airbnb.
Besides that, with the Strata Title Issuance and the formation of the MC being crucial for the management of a property, Tan shared that Chur Associates are looking into the idea of forming an MC from day one, upon delivery of the vacant possession. However, he noted that owners may not be fully educated or equipped with the right knowledge to manage the development effectively, if doing so.
Moreover, Tan advised homebuyers to do their own research about strata property and strata property management to avoid legal nightmares. These researches include learning the rate of charges over the years, the issues brought up during the annual general meeting (AGM), the profiles of property managers and the developer, as well as the criteria of an award that has been won by the property, if there is any.
During Lee’s session titled “Maintenance Horror”, he said the country’s property industry has progressed rapidly in the last 30 years — from building simple shoplots or houses to multi-use strata commercial buildings.
However, he noted that with mixed-use buildings on the rise, the maintenance and management become even more complicated.
“You see that density and layout have gone up. Hence, the management and the maintenance of the property [pose] a new challenge — the management of different types of strata properties,” said Lee.
He reckoned the need for planned preventative maintenance to ensure the tiptop condition of a property, but the real situation is a wait-and-see attitude until an equipment breakdown occurs.
Lee also emphasised on the importance of a healthy contribution for the collection charges and sinking fund.
“If you don’t have enough money, you’ll find that your capex (capital expenditure) will be in deficit. Your building will ultimately break down very quickly and become very unsafe. Financial sustainability is the key. This is because the equipment in your property does not last forever,” he said.
During the fireside chat, Au and the three panellists discussed what investors and consumers should watch out for when buying into stratified integrated development.
For Lee, he noted that it is important for homebuyers and investors to look at the overall master plan of the development and to see what will be coming up in the development, while Tan believes that every stakeholder should be involved in the planning stage of the development of the property from day one.
“As the project gets more sophisticated, the developers who are in charge of the project make the decision while getting the input from everyone (experts) to build the project properly,” said Tan.
Meanwhile, Tong advised that those who are not willing to take the risk of buying properties at the primary market, can look into the secondary market. In that way, they will be able to assess the tangible elements of the development.
However, the downside to buying a secondary property is that there is limited room for capital appreciation and the design of the property may be outdated.
“If you’re buying a property under construction, there’s an additional risk such as completion risk because you don’t know what it [will] look like when it is finished, whether it’s exactly like in the brochure. Then, there’s operational risk such as insufficient money for the MC or whether the services are well-built.
Lee added that there are developments that try to outdo each other by providing a unique facade. However, while it may be aesthetically-pleasing, this kind of facade may be harder to maintain.
“I found out that (the developers often try to outbid each other in terms of design) and I see there’s a lot of frivolous features. Sometimes, the design is so unique that only one particular person knows (how to maintain it) and as a result of that, you find that the building becomes very difficult to manage,” said Lee.
Au is the chief judge of The Edge Malaysia’s Best Managed & Sustainable Property Awards 2023, while Tan, Lee and Tong are the judges for the award.
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Source: EdgeProp.my
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