A STUDY ON

MANAGEMENT OF HIGH-RISE MEDIUM

AND LOW-COST RESIDENTIAL BUILDINGS:

PRACTICAL GUIDELINES

NAPREC REAL ESTATE RESEARCH

2003

Funded by :

National Institute of Valuation (INSPEN)

Ministry of Finance Malaysia

Prepared by :

Management for Development

School of Social Sciences

University Science Malaysia

RESEARCH TEAM

PROJECT LEADER TIUN LING TA, Ph.D RESEARCHERS NOR MAI-INA BINTI MALEK, Ph.D

ABDUL FATAH CHE HAMAT, Ph.D LIM YOKE MUI, MISM NICOLE CHANG SHU FUN, MSc. KHOO BOO HOCK, B.Sc.

RESEARCH OFFICERS NICOLE CHANG SHU FUN WONG MEI FONG

FUNDED BY Secretariat National Property Research Coordinator (NAPREC), National Institute of Valuation (INSPEN) under Real Estate Research And Development Grant Scheme

AGREEMENT No. NAPREC (R&D) 5/03

The new trend of living in high-rise residential buildings has become a norm and is getting more popular, especially in urbanised areas of the developing countries like Malaysia. In conjunction with the high-rise residential development, the Strata concept was first introduced in Malaysia under the National Land Code 1965 in which "subsidiary titles" of high-rise properties were made applicable in the property ownership system. This new concept of modern living has been rapidly developed in the country and spread over other major states such as Penang, Kuala Lumpur, Selangor and Johor in order to accommodate the rising needs in housing, especially the need for affordable housing. However, the main concern is whether this new concept of living is being developed with a proper and careful planning. Are Malaysians ready for this new concept of high-rise living in which they have to share the same living environment and facilities with a large group of neighbours? Have the residents been properly educated on the maintenance and management of high-rise residential buildings? Do they understand their rights as well as their roles and responsibilities as high-rise parcel owners? The current scenario shows that high-rise living in Malaysia is still in its infancy and apparently, we are still lacking an appropriate legislation system to govern and enforce the standard of property management for all high-rise buildings in the country. Furthermore, we also face problems due to the lack of public awareness and limited expertise in building management. As a result, numerous conflicts and misunderstandings arise among the residents, parcel owners and relevant parties such as those involved in property management (property managers/ management agents, Management Corporations, developers and state governments). Various complaints from the parcels owners or residents of high-rise residential complexes pertaining to the management of their complexes have been increasing from day to day. Almost every day we come across, at least, one article related to the problems in high-rise living, particularly in the low and medium-cost schemes where the developers and property managers tend to neglect the quality of management services provided due to limited funds, and also othér factors. For instance, thousands of residents of a 21 -storey flat in Butterworth, Penang had to suffer due to the electricity supply being cut off after the management failed to settle the arrears of RM201,684.00 to TNB. This was the result of the high defaulters' rate, lack of transparency in the management of accounts, mismanagement of sinking fund, unprofessional management services provided and many more. These issues have attracted a lot of debate and discussions in the country especially in the major states where the high-rise housing schemes have become an important alternative to the house buyers due to various factors. Some choose to own a high-rise unit due to the luxury of extensive facilities and services provided, as well as the high prestige bestowed to this new modern living concept while some were forced to buy high-rise units as they cannot afford to buy landed property. Looking at the housing development trend, the problems on the management of high-rise residential buildings has become a serious issue in the country, if it is not dealt with accordingly.

Based on the potential and the need for an in-depth study on the arising issues and problems of high-rise management, particularly in low and medium-cost projects, we, a group of researchers from USM found that there is a crucial need to conduct research to study the issues in order to understand the real problems and to identify the contributing factors. From this research project, we are proposing a standard practical guideline for

PREFACE

a sound management of low and medium-cost high-rise residential buildings. This research can be used as a reference for both property managers and Management Corporations in the country. The application Of a grant of RM273,200.00 under the Real Estate Research and Development Grant Scheme from the National Institute of Valuation (INSPEN), National Property Research Coordinator (NAPREC) Secretariat for a project with the title of "Management of High-rise Low and Medium-cost Residential Buildings: Practical Guideline" has been approved and the agreement was signed in August 2003. The research project then formally commenced in November 2003. This research involved 6 researchers, (Assoc. Prof. Dr. Tiun Ling Ta as the project leader, Dr. Nor Malina Binti Malik, Assoc. Prof. Dr. Abdul Fatah Che Hamat, Ms. Lim Yoke Mui, Ms. Nicole Chang Shu Fun and Mr. Khoo Boo Hock) working together with the assistance from 2 research officers (Ms. Nicole Chang Shu Fun and Ms. Wong Mei Fong). The research was divided into 6 study areas in which, each of the researcher was assigned to do in-depth study on their respective areas. The following are the division of the study areas among the team:

Professionalism — Dr. Nor Malina Binti Malik

Issues on Maintenance and Physical Management -Assoc. Prof. Dr. Tiun Ling Ta

Financial Management —Assoc. Prof. Dr. Tiun Ling Ta/ Mr. Khoo Boo Hock

Security and Safety Management— Ms. Nicole Chang Shu Fun

Strata Titles and Management Corporation — Ms. Lim Yoke Mui

Social Issues —Assoc. Prof. Dr. Abdul Fatah Che Hamat The contents of this report were divided into 8 main chapters. Chapter 1 is the introduction, the background and profile of the research as well as the research methodology. Besides, an overview on property management is also included in Chapter 1. Chapter 2 to Chapter 7 are findings from the current scenario and arising problems of the high-rise living, where the proposed practical guidelines on the arising issues are incorporated. Chapter 2 focus on the issues of professionalism in high-rise residential management while Chapter 3 discussed on the maintenance and physical management, followed by financial management in Chapter 4. Chapter 5 looks into the area of security and safety management where as Chapter 6 on strata titles and Management Corporation and lastly the social issues of high-rise living was discussed in Chapter 7. Chapter 8 focus on the Frequently Asked Questions (FAQ) where some frequently asked questions by the public pertaining to the management of high-rise residential buildings were listed with the provision of answers compiled by the research group. All relevant references such as examples of payment vouchers, bills, tender forms, renovation application form and others are being appended at the end of the report.

CONTENTS

ACKNOWLEDGEMENT

PREFACE iii v

List of Tables xv

List of Figures xvi

List of Appendixes

CHAPTER 1 INTRODUCTION

1.1 Management of High-rise Residential Properties in Malaysia

Xxii 1

1.2 Research Background/ Profile 3

1.2.1 Objectives 3

1.2.1.1 General Objectives 3

1.2.1.2 Specific Objectives 4

1.2.2 Significance of the Study 4

1.2.3 Scope 5

1.2.4 Research Methodology 6

1.2.4.1 Overview of Research Methodology 6

1.2.4.2 Sampling Method 7

1.2.4.3 Sample Size 9

1.2.4.4 Survey Method 9

1.2.4.5 Questionnaires Design 10

1.2.4.6 Pilot Survey 11

1.2.4.7 Data Collection 11

1.2.4.8 Data Processing 16

1.2.4.9 Data Analysis & Report Writing 16

1.3 An Overview on Property Management 19

1.3.1 Type of Maintenance 21

1.3.1.1 Routine Maintenance 21

1.3.1.2 Long Term Maintenance 21

1.3.1.3 Planned and Preventive Maintenance 22

1.3.2 Management Transparency

CHAPTER 2 PROFESSIONALISM

26

2.1 Introduction 29

2.1.1 Property Management Structure for High-rise Residential Buildings 32

2.1.2 Professional Property Management 34

2.2 Problems in Property Management 37 2.2.1 Property Manager Lacks Professionalism and Knowledge in Property Management 37

2.2.2 The Role and Responsibility of a Property Manager 41

2.2.3 Unregulated Property Manager 45

2.2.4 No Guidelines for Property Management 48

2.2.4.1 Maintenance ManagementApproach Differs 48

2.2.4.2 Inconsistency in the Management Practice 50

2.2.4.3 Management Fees 51

2.2.4.4 Professional Fees 55

2.2.4.5 Unprofessional Services by Professional Property Managers 57

a. Property Management Companies too Profit-oriented? 57

b. Management Staff not Properly Trained 58

c. Lack of Transparency 59

d. Management Neglecting the Social Aspect 61

2.2.4.6 Lack of Efficiency in Property Management 61

2.2.4.7 Recovery of Management (Maintenance) Fees 63

2.2.4.8 Inadequate Legal Provision 65

2.2.4.9 Insufficient Support (Back-up) from Relevant Authorities 66

2.2.4.10 Management's Lack of Social Responsibility

2.2.4.11 High-rise Dwellers are still Unclear on the Concept of Shared

67

Ownership and Responsibility for Maintenance 68

2.3 Comparative Study with Other Countries — Singapore, Hong Kong and Australia 70

2.4 The Way Forward for Professional Property Management 74

2.4.1 Practical Guideline for Property Management 74

2.4.2 Adoption of a Comprehensive Management Approach 75

2.4.3 Regulatory Authority for Property Managers 76

2.4.4 Code of Conduct for Property Managers 77

2.4.5 Acquiring Professional Skills 78

2.4.6 Managing Community 79

2.4.7 Standardize Management and Professional Fees 79

2.4.8 Adequate and Clear Legal Provisions 81

2.4.9 Enforcement of Laws and Regulations 82

2.4.10 Centralised Authority to Cater for High-rise Units 82

2.4.11 Educate and Create Awareness among High-rise Dwellers 83

2.4.12 Comparative Study with Other Countries 84

2.4.13 New Proposed Management Structure 84

2.5 Conclusion

CHAPTER 3 ISSUES ON MAINTENANCE AND PHYSICAL MANAGEMENT

85

3.1 Introduction 87

3.1.1 Needs for Effective Maintenance and Management 87

3.2 General Issues in Property Management 93

3.2.1 Role of Local Authorities and Enforcement Bodies 93

3.2.2 Rights and Responsibilities of Owner and Resident 94

3.2.3 Awareness 95

3.2.4 Cleanliness and Garbage Collection 101

3.2.5 Keeping Pets 103

3.2.6 Pest Control 104

3.2.7 Usage of Building 105

3.2.8 Two Tiered/ Phased/ Mixed Developments 106

3.3 Problems in Physical Management 108

3.3.1 Common Property and Accessory Parcel 112

3.3.2 Repainting 115

3.3.3 Defects in Building Services Installation 117

3.3.4 Physical Defects and Water Seepage 117

3.3.5 Renovation and Demolition 122

3.3.6 Car Park Bay 128

3.3.7 Swimming Pool 130

3.3.8 Water Tank 132

3.3.9 Lift 133

3.3.10 Air Conditioning 137

3.3.11 Games Facilities 138

3.3.12 Signboard and Telecommucation (Telco) Antenna 139

3.4 Effective Management of Low-cost High-rise Residential Buildings 140

CHAPTER 4 FINANCIAL MANAGEMENT

4.1 Introduction 144

4.2 Problems in Financial Management 145

4.2.1 Management Transparency 145

4.2.2 Corruption Prevention 155

4.3 Guidelines 155

4.3.1 Guidelines on Budgeting 158

4.3.1.1 Purpose of Budgeting 158

4.3.1.2 Preparation of Budget 158

4.3.2 Guidelines on Risk Management 159

4.3.3 Guidelines on Maintenance of Accounts and Records 160

4.3.3.1 General 160

4.3.3.2 Accounting Definitions 160

4.3.3.3 Importance of Proper Preparation of Accounts 160

4.3.3.4 Transparency of the Accounting System 160

4.3.3.5 Proposed Mandatory Compliance relating to Accounts 161

4.3.3.6 General Documents to be kept by Developer/ Management

Corporation 161

4.3.3.7 Preparation of Accounts 162

4.3.3.8 Essential Accounting Records to be kept are 162

4.3.3.9 Receipts 162

4.3.3.10Cash and Bank Record 163

4.3.3.11 Service Charge Levy Statement 163

4.3.3.12Use of Vouchers 163

4.3.4 Guidelines on Control and Disbursement of Funds 164

4.3.5 Guidelines on Internal Review Checklist 165

4.3.5.1 Scope of Internal Review 166

4.3.6 Guidelines on Audit of Annual Accounts 167

4.3.6.1 Why an AUDIT is Compulsory? 167

4.3.6.2 Documentation Required for an Annual Audit by Certified Public Accountant 167

4.3.7 Guidelines on Prevention of Bribery and Corruption 167

4.3.7.1 Corruption and Malpractice 167

4.3.7.2 Guidelines to Curb such Abuse 168 4.3.7.3 Integrity 168

4.3.8 Guidelines on Appointment of Contractors

CHAPTER 5 SECURITY AND SAFETY MANAGEMENT

168

5.1 Introduction 172

5.1.1 Security Controls 173

5.1 .1 .1 Types of Security Control 174

5.1.2 Safety of Building & Structural Elements 177

5.1.3 Safety of Building Facilities & Services Installation 177

5.1.4 Insurance Protection 178

5.2 Legislation and Enforcement on Safety for High-rise Residential Buildings 179

5.3 Issues and Problems on Security Management 183

5.3.1 General Provisions of Security Control in High-rise Residential Complexes 5.3.2 Active Security Control by Security Services Provider - Security Contractors,

183

Security Personnel/ Guards 187

5.3.3 Common Problems on Security Control 5.3.3.1 Unauthorised Entry — Non-residents Access on Foot/ Non-residents'

192

Vehicles 192

5.3.3.2 Crimes and Illegal Activities 195

5.3.3.3 Vandalism 197

5.3.3.4 Killer Litter 199

5.3.3.5 Problems Caused by Tenants 5.3.3.6 Unauthorised Conversion of Function of Residential Units

201

— (for Commercial Purposes) 201

5.3.3.7 Suicide Cases — Jumping Down from High-rise Units 202

5.3.3.8 Low Awareness on Security Matters Among Residents 202

5.3.4 Issues and Problems on Safety of Building and Structural Elements 208

5.3.4.1 Defective / Improper Structural Elements 208

5.3.4.2 Unauthorised Building Work/ Alterations and Unauthorised Changes in

Use/ Misuse 214

5.3.4.3 High-rise Residential Projects near/ at Slopes 217

5.3.5 Issues and Problems on Safety of Facilities and Installation 218

5.3.5.1 Defective and Inefficient Lift System 218

5.3.5.2 Defective/ Inefficient Electrical Supply System 220

5.3.5.3 Defective/ Inefficient Water Supply System 223

5.3.5.4 Defective/ Inefficient Sewerage & Drainage System 225

5.3.5.5 Improper Design and Unsafe Swimming Pool and Other Common Facilities

(Sauna, Tennis and so on) 226

5.3.5.6 Improper Design and Unsafe Multi-storey/ Open Car Park 228

5.3.5.7 Insufficient/ Ineffective Fire Protection Services Features 230

a. Inadequate Provision and No Standard Guideline 231

b. Poor Maintenance and Monitoring 233

c. Poor Housekeeping 233

d. Ineffective Means of Emergency Escape 234

e. Low Fire Safety Awareness 234

f. Critical Areas for Fire Safety 235

5.3.6 Other Safety Hazards in High-rise 239

5.3.7 Issues and Problems on Insurance Protection 240

5.3.7.1 Low Awareness on Insurance Protection 240

5.3.7.2 Inadequate and Inappropriate Policies Coverage 241

CHAPTER 6 STRATE TITLES & MANAGEMENT CORPORATION

6.1 Introduction 243

6.2 Pre-Strata Titles 244

6.2.1 Delay in the Application and Issuance of Strata Titles 244

6.2.2 Failure or Delay in Applying for Strata Titles within the Stipulated Period Stated

in the Strata Titles Act 1985 249

6.2.3 Difficulty in Transfer of Strata Titles to Parcel Owners 251

6.2.4 Collection of Sinking Fund by Developers 252

6.2.5 Unauthorised Use of Management Fund for Purposes Not Stated in the Act 255

6.2.6 Avenues for Dispute Resolution 257

6.3 Post Strata Titles

259

6.3.1 Defaulters 259

6.3.2 Insufficient Management Funds 261

6.3.3 Failure to Display Accounts on a Monthly Basis 263

6.3.4 Irregular Meetings by Management Corporation 264

6.3.5 Failure to Audit Accounts 265

6.3.6 Management Corporation Ignorant of Procedure in Making New By-laws 266

6.3.7 Irregular Convening ofAGM 267

6.3.8 No Standard Control on Tenants 268

6.3.9 No Standard Treatment of Car Parking 269

6.4 Guidelines for Strata Titles 270

6.4.1 Guideline for Developers (before 1 St AGM) 270

6.4.2 Guideline for Managing Agent (before 1 st AGM) 271

6.4.3 Guideline for Developer Managing the Property 271

6.4.4 Guideline to Form Management Council 271

6.4.5 Guideline after 1 st AGM

CHAPTER 7 SOCIAL ISSUES

272

7.1 Introduction 275

7.1.1 Social Aspects of High-rise Living 275

7.1.2 Why are Social Aspects Important to High-rise Living? 276

7.1.2.1 High-rise Complexes are Crowded 276

7.1.2.2 Residents Come from Different Backgrounds 276

7.1.2.3 Residents may Not Know Their Neighbours when They Move to the

Complex 277

7.1.2.4 NotAll Residents have Friends and Relatives Living in the Complex 277

7.1.2.5 High-rise Complexes are like "Confined" Dwellings 277

7.2 Existing Social Conditions in the High-rise Complexes 278

7.2.1 Low Awareness of Social Rights and Responsibilities 279

7.2.2 Inadequate Social Interactions with other Residents especially Neighbours 280

7.2.3 Inadequate Facilities for Basic Sports and Recreation 286

7.2.4 Inadequate Facilities for Religious and Social Functions 288

7.2.5 Facilities for Activities to Promote Social Interactions are Poorly Maintained 289

7.2.6 Insufficient Funds for Organizing Social Events or Functions 291

7.2.7 Inappropriate Size of Living Space per Family Member within Each Unit 291

7.2.8 Lack of Facilities for "Special" People 294

7.2.9 Difficulty in Accessing Public Transports 295

7.2.10 Towards Making High-rise Complexes as "Partially Self-contained" Community 296

7.3 Guidelines 297

7.3.1 Proposing a Legal Social Infrastructure for High-rise Complexes 297

7.3.2 Increase Social Awareness among Residents and Management 299

7.3.2.1 Increase Awareness of Social Responsibilities of the Management 299

7.3.2.2 Increase Awareness of Social Rights and Responsibilities of Residents 300

7.3.3 Provide Basic Facilities for Social Interactions 300

7.3.4 Increase Social Interactions among Residents 302

7.3.4.1 Organise More Social Activities 302

7.3.4.2 Organise More Community-based Projects and Activities 303

7.3.4.3 Organise Public Talks on Issues of Interest 304

7.3.4.4 Encourage the Practice of Holding "Open House" for Neighbours when

Celebrating Religious Festivals and Invite Neighbours and Other Residents

to Weddings 305

7.3.5 Funds for Social Activities 305

7.3.6 Meeting Other Social Needs 306

7.3.6.1 Meeting Social and Religious Needs 306

7.3.6.2 Meeting the Need for Less Crowded Units and Less Crowded Complexes 307

7.3.6.3 Meeting the Need of Residents to Socialize Outside the

Complexes

307

7.3.6.4 Meeting the Need of "Special" People 307

7.4 Conclusion 308

CHAPTER 8 Frequently Asked Questions (FAQ) 309

BIBLIOGRAPHY 331

APPENDIX 335

RESEARCH TEAM

CHAPTER 1 INTRODUCTION

Tiun Ling Ta & Nor Malina Malek

1.1 Management of High-rise Residential Properties in Malaysia

The scarcity of land for development of landed residential properties in major urban areas in

Malaysia particularly in states such as Penang, Kuala Lumpur, Residential Selangor and Johor,

together with the rising demand for housing have Properties insulted in the continuous

development of high-rise residential schemes in these Malaysia high-density areas. Viewed from

the end of 2000, the property outlook suggested that with land prices experiencing an upward

trend, strata properties, particularly affordable schemes, continue to receive positive demand in

the Malaysian housing market. High-rise living in urban centers is a logical response to soaring

land prices. This has been successfully implemented in Singapore and Hong Kong where the

traditional lifestyle is high-density, highrise living.

By the first quarter of 2004, there were at least 877 ,375 units of strata properties inclusive of

flats, apartments, service apartments and condominiums already existed nationwide while

another 14,640 high-rise units were expected to be completed within the same quarter (NAPIC,

2004). The majority of these existing high-rise units are concentrated in the four major cities

namely Kuala Lumpur, Selangor, Johor Bahru and Penang, with a combination of 737,583 units.

The number of high-rise residential units is growing rapidly every year. This is indicated by the

statistics from NAPIC, whereby another 275,272 high-rise residential units are to be supplied

into the local housing market within the year 2004 and many of them demanding good

management and maintenance system.

In line with urbanisation and globalisation, the demand from house buyers today is also

changing. The trend now is more towards quality living — they do not merely want to buy just a

house but a complete housing package with extensive facilities and services. That means buyers

are now paying more attention to value added features such as maintenance, covered parking

spaces, swimming pool, security, landscaping and many others. The continuous growth of high-

rise residential buildings indicates that there is a need for an effective ownership and property

management system to instill a valuable living experience among high-rise residents in this

country. An effective

and efficient property management system will increases the property values and contributes

to a quality living environment.

However, the current practise of property management in Malaysia poses numerous

problems, which affect all parties involved: the developers, property managers, parcel owners

and residents of high-rise residential complexes. There are many reports on the problems of

managing high-rise residential complexes particularly in the provision of adequate services

and the collection of maintenance fees. Failure to manage property professionally leads to

various problems and eventually will negatively affect the quality as well as the value of the

property.

The seriousness of these management problems has prompted many parties to raise their

concerns and comments in various fashions and avenues. A few have actually taken legal

actions to resolve disputes between the developers and the parcel owners, such as the

disputes between Crescent Court's residents and the property manager in Brickfields; some

seek help from politicians; some lodge complaints to the Housing Tribunal such as in the

Taman Fadason case in Selangor; quite a number of them have been organizing talks to

discuss the root causes of the problems while others resort to the mass media for immediate

attention and action. The significance of these problems is also reflected in the rising numbers

of complaints and legal actions taken against errant developers or property managers as well

as the number of cases reported to the relevant authorities or by the mass media. The main

concern is with the low- and medium-cost projects, where developers and property managers

seem to have largely neglected the quality of management services provided.

Many people agree that the management system currently practised is generally lacking in

professionalism and has much impracticality. For instance, there is no apparent guideline and

clear control measures related to who can practise as property managers. In reality, virtually

any person can practise property management even though the Valuers, Appraisers and

Estate Agents Act 1981 have claimed that only those valuers registered with the Board of

Valuers, Appraisers and Estate Agents can become professional property managers. The level

of professionalism and the management approach practised by the property managers who

are registered with the Board of Valuers and Appraisers are also questionable. There is

evidence where registered

property managers have failed to perform their duty professionally and efficiently. The lack of

professionalism in their practises causes a lot of problems and inconvenience to the parcel

owners as well as the buildings under their management. The main objective of property

management is to upgrade the value of the building or at least to maintain the original value is

no longer being concerned with, but the main concerns are the monetary gains especially the

management fees and the professional fees. Cutting corners among the property management

companies are rampant in order to ensure that the tenders submitted to manage the property

are successful.

It is also important to note that the Malaysian property management industry today has

become more complex and challenging. Property owners in the past might be satisfied with just

proper caretaking and cleaning tasks provided. Today, however, the concept and demand for

property management have changed. Parcel owners also want to have their say and play their

role in the management system of their complexes. In this context, the issue of management

transparency is one of the areas that need to be reconsidered in the management system

practised in this country especially prior to the issuance of strata titles.

Therefore, it is crucial for the relevant authorities to develop a practical guideline for an

effective property management system and strictly enforce the necessary requirements so as

to improve the quality of service and the level of professionalism in property management. The

proposed guideline is also crucial to solve the problems in the management and maintenance

of highrise residential complexes. Therefore, this research attempts to investigate the arising

problems and recommend essential considerations to be incorporated into the formulation of

the proposed guideline.

1.2 Research Background/ Profile

1.2.1 Objectives

The objective of this research can be divided into two main parts, the general objectives and

the specific objectives.

1.2.1.1 General Objectives:

• To evaluate the effectiveness of the management system practised in the

country compared to the system practised in the region such as those

practised in Singapore, Hong Kong and Australia.

To investigate the weakness of current management systems of high-rise residential

building in the country and to what extent it affects the living standards of those who are

staying in them.

To identify factors which contribute to the management problems of highrise residential

buildings in Malaysia.

To create higher awareness among the residents about their rights as occupants in high-rise

complexes.

To study the existing legislation pertaining to the management of high-rise buildings in

Malaysia and compare it with those of other countries in order to identify any

shortcomings or weaknesses of our legislation.

1.2.1.2 Specific Objectives:

To recommend/suggest practical solutions to the specific management problems of high-

rise buildings in Malaysia.

To recommend a practical guideline for property management of high-rise residential

buildings in the country.

1.2.2 Significance of the Study

Property management and maintenance are part and parcel of high-rise living the but the standard of management service provided by most of the property managers and developers are now questionable. Most are not professional, lacking in experience and too profit-orientated and cannot fulfill the expectations of most owners. Owners are now more discerning and better informed. Therefore, good management is essential to enhance the value of the property. In the past, owners might be satisfied with only basic caretaking and cleaning service but currently housing management encompasses a variety of subjects from cleaning and security services to comprehensive maintenance. However in Malaysia, building management and maintenance tend to get the least priority in the

domestic housing industry. Management was not taken into consideration in the planning stage of the development. Too much emphasis is given by developers on the cost and aesthetics of the building which can attract buyers and the marketability of the building.

In view of the problems faced by most high-rise residential complexes, this study can be considered as an earmark in the property management industry in the country. The findings and recommendations from this research can be used by policy-makers and planners to improve the management system of high-rise residential buildings in the country since there is yet to be a written guideline on the management system practised in the country. Direct benefi-ciaries of the findings from this research will be those involved in property management and also those staying in high-rise residential buildings such as developers, property managers, Management Corporations, Residents' Associations and also residents or parcel owners of high-rise buildings.

The guideline formulated from this research can be used as a schedule in the Housing Development

Act, Strata Titles Act or the Property Maintenance Act, and should be made compulsory to all property

managers. It is also hoped that with proper guidelines in property management, the quality of living in

high-rise residential buildings can be greatly improved and problems related to management of high-

rise residential building could be significantly reduced.

1.2.3 Scope

The scope of this research is on the management of low and medium-cost high-rise residential

buildings in Peninsular Malaysia with a focus on the states of Penang, Selangor, Federal Territory of

Kuala Lumpur and Johore. Focus will be given on the issues and problems of the high-rise residential

buildings (low and medium-cost) management after the delivery of the vacant possession. That is the

period when the management team (developer and property management company) actually starts

to function (even though management should start since the planning stage).

The research will also focus on the system and structure of the property management teams

(developer, property management companies and Management Corporations) as practised in high-

rise residential schemes in Malaysia as well as the significance of their roles and contributions in the

real estate industry. Besides, this research will also study the methods of management applied and

the problems faced by both the property manager and the residents of the high-rise residential

buildings and also their implications to the quality of life in high-rise residential schemes. The

understanding of the system practised enabled the research team to construct a practical guideline for

the management of high-rise residential buildings in the country.

Next, this research attempts to evaluate the need for a specific maintenance bills, the establishment

of a housing commissioner, determine the power of housing commissioner and study the power and

the implementation of the Strata Titles Board. A comparative study with other countries was

conducted namely Singapore, Hong Kong and Australia in order to construct a practical guideline on

the management system that can be implemented in the country.

The guidelines for a good management system were established based on the analysis of the

primary data of 2250 residents, 200 RAs/MCs and 20 property management companies.

1.2.4 Research Methodology

1.2.4.1 Overview of Research Methodology

Methodology is a crucial part of research. A good methodology approach will determine the

validity and reliability of the data uses. In this research, the methodology used is based on

the issues and problems related to the management of low and medium-cost high-rise

residential buildings which are identified through the qualitative and quantitative studies and

also from the information obtained from relevant local authorities and agencies (i.e.

secondary data: pre-survey data, previous researches, complaints statistics, official and

unofficial reports). The study was then divided into five phases. In the first phase, drafts of

the questionnaires were constructed, a sampling method was chosen and the actual sample

was identified. This also involved literature search pertaining to the management and

maintenance of the highrise residential buildings as well as the relevant legal and political

aspects such as the acts and guidelines involved. The next step is to establish necessary

"networking" with the relevant authorities and agencies for consultative and also supportive

purposes. For example: INSPEN, NAPIC, State Housing Departments, Local Councils, Property

Management Company and others.

In addition, "networking" with related authorities and agencies in Singapore (as one of our

reference countries) is important to study the management systems practised in Singapore

for comparison. Information on the most updated list of low-cost and medium-cost high-rise

residential complexes with location details for the areas in Penang, Kuala Lumpur, Selangor

and Johor have been obtained from NAPIC (National Property Information Centre or Pusat

Maklumat Hana Tanah Negara) in Penang, Kuala Lumpur, Selangor and Johor. Contact details

for property management companies and other related agencies in study areas are being

gathered and kept as records for further references.

The construction of the questionnaires began with several brainstorming sessions and

continued until all the objectives of the research had been adequately addressed. The

sampling method was chosen by taking into ac-count the objectives of the research and the

logistical and practical issues. In the second phase, a pilot study was conducted in Penang.

Based on the feedback from the exercise, further revisions on the questionnaire were made.

The third phase marked the actual data collection process and this phase began with training

of numerators who would be doing the interviews in the field. Once the training was

conducted and the questionnaires were printed, actual interviews with the respondents in

the field were carried out. By March 2004, the data collection process had been successfully

launched and started in Kuala Lumpur and Selangor, which was then followed, by Penang and

Johor.

A workshop, which also functioned as a discussion session with the relevant parties (i.e.

Residents' Associations, Management Corporations, developers, property managers, NGO,

local authorities and etc.), was conducted on 9 August 2004 in USM to gather in-depth

information and feedback from the participants pertaining to the issues and problems of

management and maintenance in high-rise residential buildings. Besides, a study visit to

Singapore was also conducted in June 2004. The information gathered from the discussion

sessions with 4 property management companies and Building Construction Authority

(BCA), Ministry of National Development Singapore during the study visit has been

valuable input for the in-depth study towards recommending practical guidelines for the

management of high-rise buildings in this country.

The fourth phase is the data entry process which includes the coding of the variables by

using the SPSS programme, the cleaning of data, the training of the data entry operators

who would be responsible for entering the data, the data entry process, the formation of

the database and further data cleaning after the establishment of data bank. In the final

phase, all recorded data was analysed and finally presented in the final report. Several

discussion groups were also organized to refine the report.

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