THE BOARD OF VALUERS, APPRAISERS ANDESTATE AGENTS, MALAYSIA. MALAYSIAN PROPERTY MANAGEMENT STANDARDS A-27-15, LEVEL 27, TOWER A, MENARA UOA BANGSAR, NO. 5, JALAN BANGSAR UTAMA 1, 59000 KUALA LUMPUR. TEL: 03-2288 8815, 2288 8816, 2288 8817 FAX: 03-2288 8819 URL: http://www.lppeh.gov.my MALAYSIAN PROPERTY MANAGEMENT STANDARDS The Board of Valuers, Appraisers And Estate Agents, Malaysia. FOREWORD National Development and National Economic growth has led to greater urban growth resulting in intensifying and maximizing land use. Greater commercial developments have led to bigger and larger purpose built offices and sophisticated shopping complexes. Urban living has been profoundly changed due to high rise developments. Although buildings are durable and are built to last a. 'long tome, they have to be managed physically and economically. Professional Property Management is a regulated profession in this country. The Valuers, Appraisers and Estate Agents' Act (Act 242) has set up the Board of Valuers, Appraisers and Estate Agents to register, regulate and ensure compliance to rules and regulations and code of ethics for Property Managers. It is the duty of the Board to ensure that professional property managers carry out their duties and comply with every aspect of professional practice. With this in mind, the Board has developed the Malaysian Property Management Practice Standards, a set of practice standard that will senable professional property managers to carry out their practices. Just like the Malaysian Valuation Standards and the Estate Agency Standards for valuers and estate agents respectively, these standards will be the yardstick of measurement for property management practitioners. The Board is confident that with the implementation of these standards, the professionals and all those in the industry will be able to carry out their jobs effectively and efficiently. These Standards will be used to develop and determine the good practices in professional property management. The Standards have been long in the making and the Board hopes that with its implementation, the consuming public will be protected from erring practitioners, because the Standards will also serve as a deterrent to erring practitioners. I would like to congratulate and express my appreciation to the authors of this standards especially to the Property Management Committee of the Board and the practitioners from ISM and PEPS whose concerted and commendable efforts resulted in the creation of these standards. DATO SR. ABDULLAH THALITH BIN MD THANI President Board of Valuers, Appraisers and Estate Agents Malaysia 1 May 2010 maintenance and control of any land. excluding the management and maintenance of property- based businesses. . tenant relations. the Valuers. building and any interest therein. the Property Manager has fiduciary obligations to act lawfully.. When entrusted with the management of a property. The Board of Valuers. "the management. competently. facilities and amenities in strata titled buildings and lands.. The Strata Titles Act 1985 (Act 318) and the Building and Common Property (Maintenance and Management) Act 2007 (Act 663) addresses the management and maintenance of the common properties comprising common areas. In the case of property management services. on behalf of the owner for a fee. A code of practice standards is necessary to ensure practitioners provide an accepted standard of professional service and forms a basis for best practice in property management services. In Malaysia. "Honesty" "Fairness" and "Professionalism" underpin this specialist service dispensed by the Property Manager. impartially and in accordance with the Client's instructions and objectives. health and safety issues to general maintenance. These two Act spells out the statutory duties and powers of the Joint Management Bodies and Management Corporations and that gave rise to the need for professional Property Managers for the management and maintenance of common properties. staff and vendor's management code and regulatory compliance. Appraisers and Estate Agents Act 1981 (Act 242) defines property management as. building construction and maintenance. As a property professional. "Trust". Property Managers should be qualified in real estate management or its equivalent with appropriate professional and supervised training. Appraisers and Estate Agents. PREFACE The management of real estate involves many facets from managing accounts and finances of the real estate. diligently. Malaysia. Appraisers and Real Estate Agents is the legislated supervisory and regulatory body that issues annual authority to practice for practising professionals providing real estate services including those providing property management services. Fiduciary obligations represent the highest level of responsibility under the law in a service industry. The Property Manager should be well versed in his role and provide a high standard of service to his Client. the Property Manager must be competent in real estate finance. "Integrity". The Standards can also be used as a measure of performance to benchmark and also to judge whether a Property Manager has performed his task professionally." It is compulsory for those offering property management services for a fee to be registered with the Board of Valuers. real estate laws and taxation as well as general management. insurance matters. The Standards are mandatory and shall come into force on 1 June 2010. Within each standard is an INTRODUCTION to the standard which sets out the broad objectives. Property Managers are required to adhere to the standards strictly. the STATEMENTS OF STANDARD and followed by EXPLANATIONS in the last section. It is expected for Property Managers to use this Standards and adhere to its principles and directives carefully to achieve the required standards of property management. .Each Standard deals with a certain aspect of property management. These Standards aims to cover the key aspects of property management but should not be taken as exhaustive. ....................... Definitions And Meanings As Used In The Standards....................................15 FINANCIAL MANAGEMENT STANDARD 7..................................................................................................................................................................................................................................................................................................................................................................................................................................CONTENTS Foreword....................................................................................................21 INSURANCE MANAGEMENT STANDARD 9...........................1 THE PROPERTY MANAGER STANDARD 2..19 ADMINISTRATIVE MANAGEMENT STANDARD 8.................................................................24 HEALTH..................4 APPOINTMENT OF A PROPERTY MANAGER STANDARD 3..............................................................................................................................................................................9 BUILDING MANAGEMENT STANDARD 5............ SAFETY & EMERGENCY MANAGEMENT STANDARD 10..............................................................................................................................................................v STANDARD 1.................................................................................................................................11 MAINTENANCE MANAGEMENT STANDARD 6..............' Preface..........6 HANDING OVER/TAKING OVER OF PROPERTY STANDARD 4....26 TENANCY/LEASE MANAGEMENT .............................................................................................................. landscape areas. lobbies. "Building Maintenance Fund" means the property management account in relation to an intended subdivided building or land that is opened and maintained by the Joint Management Body in a development area under section 22 of Act 663 until the Management Corporation is established. entrances and exits. Appraisers and Estate Agents. playing fields and recreational areas. refuse chutes. fixtures and fittings. in relation to a development area or lot. cables and ducts that serve more than one parcel. sewers. Whereas. wires. lifts. corridors. "Act 663" means the Building and Common Property (Maintenance and Management) Act 2007. "Board" means the Board of Valuers. Appraisers and Estate Agents Act 1981 (as amended). compounds. stairways. driveways. the by-laws in relation to a building or land intended for subdivision under Act 663 are the house rules made under section 14 of the Act. pipes. "Commissioner" means the Commissioner of Buildings appointed under section 3 of Act 663. section 44 and as statutory by-laws provided for in the Third Schedule of the Act. Malaysia. open spaces. "Building Maintenance means the property management account in relation to Account" an intended subdivided building or land that is opened and maintained by the developer for his completed building(s) in a development area under section 16 of Act 663 until the Joint Management Body is established. refuse bins. drains and water tanks. the exterior of all common parts of the building. fire escapes. "By-laws" means the by-laws which are in operation as house rules for that building or land made under in relation to a subdivided building or land under Act 318. "Common property" means so much of the development area or lot as is not comprised in any parcel.DEFINITIONS AND MEANINGS AS USED IN THE STANDARDS "Act 242" means the Valuers. stairs. walls and . such as the structural elements of the building. "Act 318" means the Strata Title Act 1985 (as amended). car parks and parking areas. port. "Management Corporation" means the management corporation established under section 39 of Act 318 in relation to any subdivided building or land shown in an approved strata plan. golf course. sports complex and hospital. motel. quarry. "Property-based business" includes a hotel. hostel. "Local authority area" means any area in a State that has been declared by the State Authority to be a local authority in accordance with section 3 of the Local Government Act 1976 [Act 171]. marina. and all other facilities and installations and any part of the land used or capable of being used or enjoyed in common by all the occupiers of the building. plantation. (b) preparing budgets and maintaining the financial . building and any interest therein. administrators and successors in title or permitted assigns of such person or body of persons. "Property management" means the management and control of any land. who develops any land for the purpose of accommodation including accommodation for commercial and industrial use and includes the executors. on behalf of the owner for a fee and includes but is not limited to the following responsibilities: (a) monitoring outgoings for the property and making payments out of the income from the property. "Joint Management Body" means the Joint Management Body (JMB) established under section 4 of Act 663. cinema. "Management Fund" means the property management account that is opened and maintained by the Management Corporation in a strata titled development under section 45 of Act 318 in relation to a subdivided building or land. "Managing Agent" means a registered valuer under Act 242 appointed by the Commissioner of Buildings under section 25 of Act 663 or a registered valuer or registered valuation company appointed by State Authority under subsection 10B(6) Of Act 318 or by the Commissioner of Buildings under section 50 of Act 318. "Developer" means any person or body of persons (by whatever name described). excluding the management of property-based businesses. fences. stadium. or physical worth of. (e) advising on insurance matters. . manages and controls such land. a firm or a company who. "Special Account" means the capital expenditure account opened and maintained by the Management Corporation of the development under section 46 of Act 318 in relation to a subdivided building or land. building and any interest therein. and (g) advising on the necessity for upgrading the property or for the merging of interests. on behalf of the owner of any land. "Property Manager" means a person. (c) enforcing the terms of leases and other agreements pertaining to the property. building and interest to maintain or increase the investment in. "Sinking fund" means the capital expenditure account opened and maintained for the completed building(s) in a development area by the developer or the Joint Management Body under section 24 of Act 663 in relation to an intended subdivided building or land. records for the property. (d) advising on sale and purchase decisions. such property. (f) advising on the opportunities for the realisation of development or investment potential of the property. 4 The Property Manager shall sign important reports and documents prepared by him.3. 1.6 The Property Manager shall be adequately covered by professional indemnity insurance. MALAYSIAN PROPERTY MANAGEMENT STANDARDS STANDARD 1 THE PROPERTY MANAGER 1.1.Appraisers and Estate Agents Act 1981 (Act 242) which defines Property Management and the role of Property Managers in the management of properties. 1.3.2. guidelines and circulars issued by the Board and other relevant authorities. Appraisers and Estate Agents. 1.1.2.1.3 The Property Manager shall ensure that all contracts are signed by the Client unless the Property Manager is required and authorized in writing by the Client to sign any of the contracts on behalf of the Client. 1.2.0 INTRODUCTION 1.1 Section 19(c) of Act 242 stipulates that no one other than those registered with the Board of Valuers.5 The Property Manager shall be honest and independent and shall adhere to the code of conduct and ethics under Act 242 and other relevant statutes and regulations. Malaysia. . 1. Appraisers and Estate Agents shall be authorised to practise property management for a fee. 1.1 The Property Manager shall comply with the provisions of Act 242. competent and experienced in managing real estate and shall be registered with the Board of Valuers.2. qualification and code of conduct of the Property Manager so that the Client as well as the general public are assured of a high standard of service that will be provided by professional property managers.1 Property management is a regulated professional practice governed by the Valuers.0 STATEMENTS OF STANDARD 1. 1.2 The Property Manager shall be qualified.0 EXPLANATIONS 1.2. standards.2 This Standard specifies the duties.2. 1. Act 318 and Act 663 as well as all relevant regulations.2. 5 The Property Manager shall deliver his services professionally and observe the professional ethics and code of conduct expected of him as a professional outlined as below : i. quarries. motels. continuously improve knowledge and skills. practice and comply with every standard. marinas. adhere and advocate within the industry to the spirit of conforming to and complying with all applicable laws and regulations. misrepresentation and unethical practices in property management and any other act or omission by persons practising property management which may bring disrepute to the profession.3. possess a working knowledge of the codes of conduct and ethics propagated by other professional organisations that serves the real estate industry. ii.3. 1.4 The Building and Common Property (Maintenance and Management) Act 2007 (Act 663) further permits the Commissioner of Buildings to appoint a Property Manager as Managing Agent where the maintenance and management of a building is found to be unsatisfactory. inspire and encourage others to embrace and practice these ethical principles and standards through their own sense of dedication and professionalism. directive.000 or jail sentence of three (3) years or both. iv. 1. ports. as well as faithfully observe. affirm and commit to a mission towards professional practice above personal gain. stadiums.3. plantations. The law states that anyone practicing property management without an authority to practice will be guilty of an offence under the Act which carries a maximum fine of RM 25. 1. v. vi. These property based businesses includes hotels. integrity and shall always act in the best interest of the Client. maintain the high standards of his profession and cooperate with the Board to protect the public against fraud. sports complexes and hospitals. vii. golf courses. 1. circular. .3 The Property Manager may be appointed as the Managing Agent by the State Authority under section 10B(6) or by the Commissioner of Buildings under Section 50 of the Strata Titles Act 1985 (Act 318) to exercise the powers and discharge the duties and functions of a management corporation. shall practice his profession with honesty. iii.3.2 Act 242 gives exemptions to property based businesses to be managed by specialist managers other than Property Managers. guideline and decision of the Board. hostels. cinemas. . avoid any criminal offence or professional misconduct. viii. shall not express or communicate to the public any criticism or comment on the professional services or conduct of. The above guidelines and code of ethics are not exhaustive and serves as a guide. or professional fees charged by a fellow registered Property Manager. ix. 2. salaries and other payments agreed upon. Insurance Management. the professional fees.3. taxes. iii.2. it is important that the Property MaAnager ensures that he obtains a written appointment to manage from the owner or the Council of Management Corporation (MC) or the Joint Management Committee (JMC) of Joint Management Body (JMB) or the Commissioner of Buildings (COB). ii. v. disbursements. 2. Management.1 The engagement of a professional Property Manager is contractual in nature.2.1. iv.0 INTRODUCTION 2. Safety & Emergency vii.1 An executed Agreement with the Client ensures all scope of work in the services are understood and mutually agreed upon in the interest of both parties. the term or period of appointment. Building Management. the relevant terms and conditions of his engagement. iv. MALAYSIAN PROPERTY MANAGEMENT STANDARDS STANDARD 2 APPOINTMENT OF A PROPERTY MANAGER 2. Health. . Therefore. ii. Financial Management. vi. as the case may be (hereinafter referred to as 'the Client') followed by an agreement or contract. the scope of work in the services to be provided by the Property Manager. 2.2. Maintenance Management.3.1.1 The Property Manager shall enter into a written Agreement with his Client in respect of his appointment as a Property Manager.2 The Property Manager shall ensure that the Property Management Agreement includes the following: i.0 EXPLANATIONS 2.0 STATEMENTS OF STANDARD 2. iii. Administrative Management. The scope of work in the services covered by the Property Manager may include but not limited to the following: i Handing/Taking Over. viii. Tenancy/Lease Management. charges and disbursements chargeable by the Property Manager are stipulated in the Seventh Schedule (Rule 48) of Act 242 and is the basis for the computation of professional fees and related charges. 2.3 It is the Property Manager's obligation to perform the agreed scope of works to a reasonable standard as per the terms and conditions of the Property Management Agreement. The Property Management Agreement gives the Client the assurance that professional and fiduciary approaches are adopted by the Property Manager in the discharge of his duties and responsibilities.2 The fees.3. .3. 2. 2.3 Upon taking over the property.2 In the taking over of the property. the Property Manager shall carry out a general inspection audit to establish the current state of repair and condition of the building. 3. house rules and by-laws as and where necessary.0 STATEMENTS OF STANDARD 3. skill. required rectification of defects and deficiencies to ensure proper upkeep of the property. It is important to ensure that all the relevant assets. MALAYSIAN PROPERTY MANAGEMENT STANDARDS STANDARD 3 HANDING / TAKING OVER OF PROPERTY 3. house rules and by-laws established for the property management of the property.1. 3.2. . 3.1 Good and proper documentation of stock inventory. equipment or instrument.2.0 INTRODUCTION 3. 3. 3. 3.2.3. If there is a need to carry out any form of test or investigation requiring specialized knowledge. at his own cost.4 The Property Manager shall implement the deed of mutual covenants.5 Upon the expiry or termination of the Property Management Agreement. the Client shall. appoint a specialist consultant to conduct such test or investigation.2.1 The Property Manager shall prepare and set out clearly a defined checklist to ensure the successful handing/ taking over of the relevant assets.1 A proper handing/taking over of the property by the Property Manager is the first but essential step in the provision of the Property Management services. infrastructure. the Property Manager shall return to the Client or his appointed agent. The Property Manager shall advise and assist the Client to review and make amendments to the deed of mutual covenants. documents and records with regards to the maintenance and management of the property. the said assets.1. installation and facilities. assets and equipment will assist the Property Manager in the effective management of the property. it is important to check and ensure that all the relevant documents and financial records of the property together with the audited accounts are handed over.3. This shall be documented in the form of a Building Audit Report. documents and records.0 EXPLANATIONS 3. documents and records on the maintenance and management of the property are properly handed or taken over by the Property Manager.2. at his own cost. This ensures a smooth and professional transition to the next Property Manager. installation and facilities to establish their current state ot repairs and condition. 3. appoint the original appointed project engineering consultant or any other specialist engineering consultant to carry out a detailed engineering investigation together with proposal for remedial works.2 It is important that the Property Manager receives the latest management account and audited account to establish the opening balance upon taking over of the property. 3. 3.3. repairing.5 The Building Audit Report is useful for the planning. as the case may be. infrastructure. It is important that the above is made known to the Client in the scope of work of the Property Manager in order to avoid any form of misunderstanding by the Client. equipment or instrument. 3.6 Deed of mutual covenants. refurbishment and upgrading works. and also for the drawing up of a preventive maintenance plan. If there is a need to carry out any form of test or investigation requiring specialised knowledge. records.3. skill. the Client shall.3. comprising the fabric. as the case may be. house rules and by-laws are drawn up for the proper administration of multi-occupied buildings especially of common facilities and amenities and for their smooth and safe operation.3 The Building Audit Report is basically a report on the building condition based on a visual general inspection of all the relevant components of the building or the common property.3. budgeting and carrying out of maintenance.3.7 It is good practice that all Building Audit Reports. house rules and documents are updated and reviewed for subsequent handover to the Client or his agent upon the expiry/termination of the Property Management Contract.3. the Client shall. at his own cost. .3. during the general inspection audit of the building. A copy of the Building Audit Report duly signed by the Property Manager will be given to the Client.4 If there is any serious defect suspected in the civil and structural components or the mechanical and electrical components of the building or the common property. 3. appoint a specialist consultant to conduct such test or investigation. 2.2.3.0 EXPLANATIONS 4.3. 4.1 One of the important tasks undertaken by the appointed Property Manager is to set up a building management system customised for the property. 4.1 It is necessary to set up a site office where the Property Manager can manage all site operations.3 Building operational policies and systems ensure all aspects of building maintenance. 4.2 The Property Manager shall ensure suitable and an adequate number of persons to administer the site office and manage the day to day operations.2. 4. 4.0 INTRODUCTION 4. He shall recommend and propose the appropriate organisational structure for the Client's approval.2. The Property Manager shall also liaise and co-ordinate with other consultants.4 The Property Manager shall prepare.2.2 The Property Manager has the responsibility to ensure competent and skilled staff are employed and deployed.1.5 The Property Manager shall formulate management and maintenance procedures to ensure efficient supervision and management of the property. review and implement standard operation procedures (SOP) for the administration of the site office.3. .0 STATEMENTS OF STANDARD 4. subject to the Client's approval. repairs and supervision are undertaken within the parameters of the Client's expectations. It lays the foundation for the efficient carrying out of daily operational work.2 A well set up building management system will ensure the smooth operation of the building facilities and services at the optimum operation cost. MALAYSIAN PROPERTY MANAGEMENT STANDARDS STANDARD 4 BUILDING MANAGEMENT 4.3. 4. 4. 4.1.1.1 The Property Manager shall set up a suitable site building management office. The cost of the setup of the site office is normally borne by the Client. external contractors and relevant Government agencies on maintenance and renovation works.3 It is the duty of the Property Manager to design and implement the relevant policies and procedures for the property and ensure all necessary controls are in place. site personnel. The cost of the site office personnel is normally borne by the Client.2. 4. vendors and service contractors. . suppliers and service providers.4.3.4 Standard operation procedures ensure adherence to work flow and consistent performance by site staff. Service Providers. Planned maintenance is a systematic and pro-active policy and procedure of carrying out works and activities in preventing or minimising defects or malfunctioning of facilities and equipment prior to such an occurrence. Corrective maintenance works must be undertaken in compliance with the Client's objective.2. 5. .1. 5.2 A comprehensive maintenance management programme of a property should cover the following areas: i.1 Maintenance is a key aspect of property management and it is essential that the building is kept in good condition and facilities in an optimum operable state. The Property Manager shall establish an effective system and procedures to handle repairs and replacements. Planned Maintenance.1.2 PLANNED MAINTENANCE A systematic planned maintenance programme is important in ensuring that the building's fabric.0 STATEMENTS OF STANDARD 5. The Property Manager shall establish an effective stock and inventory record system and procedure for utilisation during corrective maintenance activities. MALAYSIAN PROPERTY MANAGEMENT STANDARDS STANDARD 5 MAINTENANCE MANAGEMENT 5.2. facilities and equipment are maintained and kept in an optimum operating condition. a comprehensive maintenance management programme in accordance with the Client's objectives and investment strategies must be devised and implemented. iii. 5. i. ii. iv. Corrective Maintenance. As such.0 INTRODUCTION 5. finishes.2.1 CORRECTIVE MAINTENANCE Corrective maintenance requires a systematic process to ensure the effective rectification / replacement of the defective or malfunctioned facilities and equipment. The Property Manager shall monitor and supervise all works in accordance with the conditions of the award of such works. iii.1. ii. amendments or additions to any codes and/or standards introduced and advise the Client accordingly. iv. The Property Manager shall monitor and supervise the planned maintenance works to ensure they are being undertaken in accordance with the pre-agreed schedule and scope of work and is completed with good workmanship. iii. iv. 5. Hence. permits and certificates. i. The Property Manager shall formulate a comprehensive scope of work. qualified.3 SERVICE PROVIDERS Effective maintenance of building facilities and services are essential to protect an asset's value. licenses. manufacturer's guidelines and warranties to ensure the services are provided effectively. The Property Manager shall formulate and prepare a detailed and systematic planned maintenance schedule in accordance with the manufacturer's recommendations and international best practices. ii. The Property Manager shall keep proper records of operating and maintenance manuals and ensure timely renewal of all licenses. The Property Manager shall manage. The Property Manager shall ensure that only qualified. clear and enforceable. skilled and experienced specialist service providers are appointed for the provision of the specific services. taking necessary action to ensure a high level of competency and professional service is provided and that the Client's interests are protected. skilled and experienced service providers are necessary to ensure high quality and standards of services are being provided for the building. the Property Manager shall ensure that a letter of award and/or contract stipulating the specified terms and conditions is issued by the Client to the successful contractor/tenderer unless the Property Manager is required and authorized in writing by the Client to sign the letter of award and/or contract on behalf of the Client. insurances. i. The Property Manager shall maintain proper records of contracts. The Property Manager shall also keep abreast and be well acquainted with all relevant laws. iii. administer and supervise all appointed service providers. . efficiently and timely. Upon a successful tender or quotation exercise. specifications and tender/quotation process that are transparent.2. ii. A letter of award must be issued to the successful tenderer or contractor upon receipt of the Client's approval. He must ensure that all works are done in accordance with the stipulated terms and conditions. It is the duty of the Property Manager to enforce the terms of the contract for service. failures and malfunctions are dealt with effectively and efficiently. The Property Manager's duty includes the preparation and offer of award after a successful tender exercise has been concluded. He must have a good working knowledge of the manufacturer's guidelines.2 PLANNED MAINTENANCE The Property Manager must not only understand the building he is managing but also the services provided therein.1 CORRECTIVE MAINTENANCE Property Managers must have an effective Corrective Maintenance Plan to ensure that the rectification and remedial actions on defects.3. 5. Any deviation from the terms and conditions and specifications should be attended to and any defects should be immediately rectified. transparent.0 EXPLANATIONS 5. All maintenance personnel and service providers must be made fully aware of the Planned Maintenance Programme. The Property Manager shall formulate job specifications in order to recruit the most suitable candidate. The engagement of in-house personnel or external service providers shall be with the approval of the Client.3.3 SERVICE PROVIDERS The Property Manager is required to recruit relevant personnel to perform services or to outsource some of these services to external service providers. The Property Manager is to forward his recommendations and analysis in a tender report to the Client for his consideration.3. industry best practices and the recommended maintenance requirements. 5.5. Tender opening and tender interview for the short listed tenderers are subject to the Client's policies and procedures.3. The Property Manager shall ensure that the Client's interest is protected in the event of any claims arising from the failure or negligence on the contractor's part to fulfil the terms of the contract. The service contract is an agreement between the Client and the service provider. . timely and undertaken at an optimum cost. Corrective measures taken by the Property Manager must be thorough. The common types of Building Services include but are not limited to the following:- 1) Air conditioning system 15) Landscaping 2) Building automation system 16) Lifts & escalators 3) Car parking 17) Advertising & signages 4) Cleaning & sanitary 18) Pest control 5) Communications 19) Plumbing 6) Construction & engineering 20) Refuse disposal 7) Electrical & mechanical systems 21) Roller shutters 8) Fire protection system 22) Roofing 9) Flood gate 23) Security 10) Water features 24) Sewerage 11) General repairs 25) Supervising engineer 12) Gondola 26) Swimming pool 13) Insurance 27) Water proofing 14) IT equipment . sinking fund and any other charges legally imposed. for the collection of sinking fund charges imposed by the Developer. Joint . Collecting rental income.2 The Property Manager's fiduciary responsibilities include the following: i.1. as the case may be. maintaining financial records and submitting financial reports for the property.4 For subdivided or intended subdivided building and land under the Act 318 and Act 663 respectively. as the case may be. ii. the Property Manager shall assist the Client to open and administer a trust account which is operated by the Client known as the Sinking Fund Account or Special Account. The Property Manager owes the Client a duty of care and must conduct his duties diligently and responsibly in accordance to his fiduciary obligations. he must ensure that he has in place proper accounting methods and systems to enable him to discharge his fiduciary duties satisfactorily. as the case may be.1 The Property Manager shall administer the finances of the property on behalf of the Client according to the contractual requirements and obligations as agreed between the Client and the Property Manager.2. and the disbursements thereof.1 Financial Management is a crucial function of the Property Manager. 6. unless instructed otherwise. for the collection of service charges and other recoverable charges imposed by the Developer.3 For subdivided or intended subdivided building and land under the Act 318 and Act 663 respectively.2.2 The Property Manager shall assist his Client to maintain the respective property management account operated by his Client. MALAYSIAN PROPERTY MANAGEMENT STANDARDS STANDARD 6 FINANCIAL MANAGEMENT 6. Building Maintenance Fund or Management Fund. 6. iii. In carrying out his duties as a Property Manager. Monitoring outgoings for the property and making the payments out of the income or charges derived from the property or as funded by the Client. 6.2.2. Joint Management Body or Management Corporation. 6.2. the Property Manager shall assist the Client to open and administer a trust account which is operated by the Client known as the Building Maintenance Account. 6. service charges.0 INTRODUCTION 6.1.0 STATEMENTS OF STANDARD 6.1. Preparing budgets. 3. a separate property management account should be opened and maintained for each individual project under property management to maintain transparency and avoid confusion.10 The Property Manager shall implement proper measures for credit control and debt recovery on a timely basis including taking appropriate aduom such as issuing of reminders.8 The Property Manager shall prepare a Financial Report on a monthly or other periodic basis and submit to the Client. 6. Joint Management Body or Management Corporation. 6.9 The Property Manager shall prepare the Annual Account and ensure that this is professionally audited by an external licensed auditor appointed by the Client at the Client's cost. the property Manager shall act in a responsible and transparent manner. and the disbursements thereof. 6.2.0 EXPLANATIONS 6.1 Whenever the scope of work in the service provided by the Property Manager includes the collection and disbursement of monies.6 The Property Manager shall advise and determine the appropriate rate and apportionment of service charge to be levied in accordance to agreed amounts and relevant legislations for the Client's approval.3.2. 6. 6. as the case may be. Management Body or Management Corporation.2. 6. For subdivided or intended subdivided building and land. 6.7 The Property Manager shall prepare and maintain proper and accurate financial records which shall be transparent and accessible to the Client and other authorised persons.2.2. In such cases.5 The Property Manager shall be responsible for the preparation of the Annual Budget covering all incomes and expenditures of the property for the Client's approval. Act 318 and Act 663 provide for the following accounts to be opened and operated by the developer. imposing of interest charges and advising on the necessity of taking legal action. the Property Manager shall put in place a sound accounting system that accounts for all monies collected and expended.2 In all cases.3. as the case may be :- . 6.2. shall be deposited into this account. as the case may be. Joint Management Body and Management Corporation are required to open and operate a capital expenditure account for each individual project known respectively as the Sinking Fund or Special Account. the developer. as the case may be.4 As the financial accounting is done on behalf of the stakeholders whose money is managed by the Property Manager. 6. The collections of service charges and othef recoverable charges imposed by the developer. The collections of sinking fund charges imposed by the developer. ii. Expenditure for the general maintenance and management of the common property for the purposes as provided under the relevant legislations are paid from this general maintenance account. Joint Management Body or Management Corporation. the developer. shall be deposited into this account.3. the Property Manager should ensure that the accounts are audited by external licensed auditors. Joint Management Body or Management Corporation. repainting of common property. .3. 6. The Property Manager is required to be diligent in the collection of arrears and take appropriate action on defaulters. 6. . Building Maintenance Account.5 Prompt collection of rentals and/or service charges is vital in ensuring available cash flow and efficient management of the property. building refurbishment and upgrading works. Join Management Body and Management Corporation are requirec to open and operate a general maintenance account for each individual project known respectively as the Buildind Maintenance Account. replacement of plant and machinery and other forms of capital expenditure for purposes as provided under the relevant legislations are paid from this capital expenditure account. i.3. A Statement of Account shall be submitted to the Client on a regular (normally monthly) basis and the Annual Accounts at the end of the agreed financial year. These reports will provide the financial status of the property to the Client. Building Maintenance Fund of Management Fund.3 The Property Manager should prepare a Financial Report on a monthly or other periodic basis as agreed with the Client and submit to the Client outlining the income and expenditure for the month with details of major expenses and debtors' ageing report. Expenditure for the major structural repairs. A Statement of Account shall be submitted to the Client on a regular (normally monthly) basis and the Annual Accounts at the end of the agreed financial year. Building Maintenance Fund or Management Fund Pursuant to Act 318 and Act 663. Sinking Fund or Special Account Pursuant to Act 318 and Act 663. asset acquisitions. 2 The Property Manager has to put in place an administrative system with suitable personnel to handle the above functions. outgoings and expenses. 7. .2.3. permits and certificates and the consequences thereof.2 It is prudent for the Property Manager to inform the Client if there is insufficient fund or cash flow to meet any payments due in respect of bills or for the purposes of renewals of licenses.2. the property Manager is able to make recommendations and decisions on property management matters. manuals.4 The Property Manager shall implement a system of handling and recording enquiries.1 In addition to maintenance and finance. With effective and comprehensive records and documents.0 EXPLANATIONS 7.3. service contracts and all other necessary documents.1. complaints and feedback.3.0 STATEMENTS OF STANDARD 7.0 INTRODUCTION 7.2. drawings.2.1.5 The Property Manager shall keep an approved petty cash account and ensure its proper utilisation and control. 7. 7. MALAYSIAN PROPERTY MANAGEMENT STANDARDS STANDARD 7 ADMINISTRATIVE MANAGEMENT 7.1. 7. utilities bills.2 The Property Manager shall ensure the application and timely renewal as well as adherence to conditions of relevant licenses.3 The Property Manager shall ensure the timely settlement of statutory payments. servicing and equipment maintenance records as well as tenant.1 The Property Manager shall compile and keep proper records. maintenance of accurate and updated plans. application and renewal of licenses. permits and certificates and handling of petty cash. service contracts. permits and certificates.2. 7. drawings. general administration forms part of operations and this may include helpdesk and customer service functions. 7. contractors and consultants contact details.2. 7.1 A systematic and efficient administrative system will help the property Manager to ensure the smooth operation of the building's facilities and services. 7. The Property Manager shall consider the buying of adequate insurance coverage to cover the risk of loss of money held in transit.2.1.1.2.3 The Property Manager shall ensure that proper and timely billing of the insurance premium is made to all owners who are liable to pay for it based on an agreed apportionment.2. 8.2 The Property Manager shall assist the Client to procure adequate coverage for the different perils to protect the interest of the Client.2 Various insurance policies are available for insuring property against perils. 8.2. MALAYSIAN PROPERTY MANAGEMENT STANDARDS STANDARD 8 INSURANCE MANAGEMENT 8. The Property Manager must have knowledge of such insurance policies as well as an understanding on the adequacy of coverage.1 The Property Manager shall advise the Client on the various perils that affect the property and types of coverage available. insurance premium and insurance claims. 8.1. 8.4 The Property Manager shall report all damages and losses as and when they occur and assist to make the appropriate claims to the insurers in accordance with the insurance policies and procedures.2. .6 The Property Manager shall keep all monies entrusted to him in a safe and proper manner and exercise due care and responsibility in handling money on behalf of his Client. as the case may be.0 STATEMENTS OF STANDARD 8.2.0 INTRODUCTION 8. 8.5 The Property Manager shall ensure that monies received from any claim is fully utilized for the purpose for which it was claimed for and all monies received are deposited into the appropriate Client's or trust account. 8. 8.1 The Property Manager shall assist the Client in the procurement of adequate insurance cover to protect the interest of the Client.2. All risks insurance An all risks policy is to cover all other possible perils. The common types of insurance policies available include the following: i. . iii. Fire insurance Fire insurance cover shall include cost of demolition and removal of debris and reinstatement or rebuilding.8. the fire insurance policy may also include provisions for any possible consequential loss of rent payable for the period during which the building is unusable or only partly useable whilst it is being rebuilt or repaired in the event of the property being affected by fire. the Client may commission and bear the cost of a valuation report prepared for fire insurance purposes.3. Depending on the Client's requirement. Public liability insurance Public liability insurance is to indemnify the Client. Others The Property Manager may inform the Client of the services offered by insurance brokers who provide more extensive advice on insurance matters and on any other insurance products available.1 TYPES OF INSURANCE POLICIES The Property Manager must advise the Client to procure the relevant insurance policies to insure the property against the various perils. ii. iv. the Property Manager and the Client's agents against claims for damages arising from acts of negligence or omission by the Client and/or his servants/agents. v. The Property Manager shall recommend to his Client to seek the advice of the relevant professionals in ascertaining the insurance value of the property. He may advise on the adequacy of all insurance policies and the risks that the Client will be exposed to if the policies do not provide sufficient cover.0 EXPLANATIONS 8. a plate glass insurance policy should be considered. In such an event. He must ensure the proper types of insurance policies are taken out. Plate glass insurance Where the property has glass front or glass external cladding.3. Mechanical and electrical equipment failure. ii. 9. viii.2. 9. ix. flood iv. Formation of an Emergency Response Team. Fire.1 The Property Manager shall keep abreast and ensure compliance at all times of the various legislations and regulations that relates to the health and safety of the occupiers of and visitors to the property. iii. safety and emergency issues for the property. SAFETY & EMERGENCY MANAGEMENT 9. 9.2 The Property Manager shall be aware of and be able to identify the possible risk and safety issues which may affect the property he manages and takes necessary measures to prevent or reduce the possible risk. the Property Manager shall prepare an Emergency Management Plan that may include the following: i.2. Power failure.1. Training for the various emergencies and conducting regular evacuation drills. Effluent and toxic waste contamination. vi. v.3 This section covers the Property Manager's scope in the management of the health.such as earthquake. demonstration and civil disorder.0 INTRODUCTION 9. iii. Aging of structural components and structural failure. hazards and emergencies that affect property include: i.0 STATEMENTS OF STANDARD 9. A manual incorporating standard operating and evacuating procedures for the various potential emergencies.1.1. landslide.4 Some types of risks.2. ii. Bomb or biological or chemical agent threat. Corrosion and leakage.2 As part of good property management practice. 9.1.2. there exists the possibility of incidents and accidents occurring which may create emergencies and a risk to the occupants of or visitors to the property. 9. MALAYSIAN PROPERTY MANAGEMENT STANDARDS STANDARD 9 HEALTH. vii. Natural disasters . Riot.1 In every property.1. the safety and well being of occupants and visitors should be of prime concern to the Property Manager.3 Where appropriate. . Pandemic. 9. x. 3. 9. guidelines and codes of practice.0 EXPLANATIONS 9.9. DOSH will ensure thorough enforcement and promotional works that employers and employees always practise safe and healthy work culture as well as comply with existing legislation.3.1 It is prudent for the Property Manager to develop a safety and security programme that meets the Client's and occupiers' needs.2 It is important that the Property Manager ensures that the properties and the surrounding environment under his care complies with the requirements of the Department of Occupational Safety and Health (DOSH).3.3 Where appropriate. the Occupational Safety Health Act 1994 (OSHA) and other related Acts.3. Such a programme is to prevent safety and security breaches and to detect them should they occur and follow through with proper actions to minimise harm to people and damage to property. OSHA provides the legislative framework to secure the safety. 9. the Property Manager shall advise the Client on the appointment of safety personnel . health and welfare among the Malaysian workforce and to protect them against risks on safety or health in connection with the activities of the personnel at work. 0 INTRODUCTION 10. . 10. 10.2. are observed by the tenant or the lessee.1.1. tenants' liaisons. 10.2.1. with the exception of fair wear and tear. and monitoring reinstatement of premises upon termination or expiry of the tenancy or lease. under the tenancy/lease agreement throughout the duration of the tenancy/lease.2.5 The Property Manager shall ensure that the covenants express or implied. 10. 10. He must ensure that these items are kept in good condition.2.2.2. 10. MALAYSIAN PROPERTY MANAGEMENT STANDARDS STANDARD 10 TENANCY/LEASt MANAGEMENT 10. management of utilities and services.0 STATEMENTS OF STANDARD 10. the Property Manager shall implement relevant processes for the collection of rents.2 Depending on the scope of work. coordination between contractors.4 The Property Manager shall have a good understanding of the covenants that are entered into between the landlord/lessor and tenant/lessee in the tenancy/lease agreement.6 The Property Manager shall ensure that delivery of vacant possession and handing/taking over are properly executed when tenants are moving in or moving out.3 The Property Manager shall ensure proper documentation and records are kept on the Client's property and inventories.2.1 The role of a Property Manager may include Tenancy/Lease Management. 10. car park charges and/or other relevant charges and shall keep proper accounts of all monies collected. This may include full reinstatement of the property to its original condition.2 The Property Manager's role in Tenancy/Lease Management will involve aspects of collection and disbursement of rents. service charges.1 The Property Manager shall ensure that all dealings and transactions are ethical and transparent with his Client's best interests protected at all times. and be well versed with legal provisions relating to landlord and tenant matters as well as those under Contract Law. He shall diligently monitor and enforce the covenants without fear or favour at all times. Whilst ensuring that the tenant /lessee has quiet enjoyment of the demised premises. 10.2 The Property Manager may be required to collect rents in addition to service charges.1 The Property Manager plays an important role as the link between the landlord/lessor and the tenant/lessee. the Property Manager must also ensure that the tenant/lessee observes all house rules and complies with all his obligations under the tenancy/lease agreement.3. He must ensure that all monies are properly collected and accounted for in the appropriate accounts.3.3.0 EXPLANATIONS 10.10. .
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