The Malaysia Institute of Estate Agents (MIEA) has launched the MIEA Landlord Insurance policy which will help landlords gain independence against the risk of runaway tenants, rent arrears together with potential damages to their asset or property when faced with bad tenants.

“As property agents, there is not much agents can do to help landlords with errant tenants except to pre-qualify them with the resources available to us. Today, MIEA is proud to say that agents can provide a second level of protection for their clients through this policy,“ said MIEA president Chan Ai Cheng in a statement yesterday.

The MIEA landlord insurance coverage will include:

• Reimbursement of loss of rental income due to tenant runaway.
• Legal expenses for letter of demand.
• Pay for amount incurred for losses or damages to contents due to malicious acts of your tenant.

The policy also cover additional benefits such as:

1. Reimbursement of cleaning services charges incurred when the contents of the premises are destroyed or damaged by tenants;
2. Reimbursement of costs incurred for repairing or replacing doors, locks, access card and Keys following the loss or damage caused by tenants;
3. Reimbursement of amount incurred for the replacement of glasses (including shower door and windows) due to damage caused by tenants;
4. Reimbursement of amount incurred for services such as plumbing, drainage, air-conditioning and toilet malfunction due to damage caused by tenants; and
5. Reimbursement of losses due to theft or burglary committed by tenants.

Chan further explained that this policy was designed and developed to provide the minimum coverage with a minimal annual premium of RM280 per unit (less than RM24 per month).

“We want the real estate profession to grow and be at par with other countries. Our motivation of introducing this policy is to protect the public and to provide an environment for agents to be competitive in enhancing their services, which will set them apart from others. This will augur well for the profession and for the Malaysian property market. Both landlords and agents can also sleep better with this additional protection which will step in should untoward losses occur,” said Chan.

MIEA’s insurance partner Howden Insurance Brokers has designed this policy with the mandate from MIEA.

Meanwhile, MIEA is also concerned at the new trends in the property market. In most of the developing and developed countries, the enforcement on those who breach the law and carry out estate agency practice illegally or under the guise of doing a different trade is highly regulated.

To take two examples, a non-real estate firm is set up as a “consultants” usually to market projects for developers and collect fees for introducing buyers which by law is not allowed (Section 22C ACT 242). Secondly, tech firms or new start-ups are now part of a larger community of those who are carrying out real estate transactions and operating without registering themselves with the Board of Valuers, Appraisers, Estate Agents and property managers (Bovaep). It is important to note that all who wish to practise any form of estate agency must be registered with the Bovaep, the regulators of the profession.

MIEA CEO & past president K. Soma Sundram highlighted that these tech companies were told that they are breaking the law, they guise as insurance brokers to bypass the law thus avoiding enforcement by the authorities. Their modus operandi is to attract tenants by not collecting deposits from them and ask landlords to take up an insurance scheme to protect them against tenant.

“The premiums they collect for this policy are far higher than the actual cost of the premiums to be paid. For example, they collect one month rental and after deducting the premiums they use the balance as their fees. This is clearly a strategy to bypass the Valuers, Appraisers, Estate Agents and Property Managers Act which only allows registered agents to collect and hold deposits and collect fees for service rendered in a real estate transaction.”

It is also illegal to collect any monies and deposit such monies in a company’s current account and not in a clients account as required by law. This goes against the very grain of public policy. This hurts the industry indirectly in that the landlords pay a lot more than the fees payable to agents.

“MIEA requests that the Finance Minister and Bovaep as regulators make a serious effort in managing this concern and to look at the ‘lacuna’ that exists within ACT 242 on matters of illegal brokers.”

Source: TheSunDaily.my

Utropolis Batu Kawan

Paramount Corp Bhd hopes to sustain the strong sales momentum with speedier sales conversion and project approvals as lockdown restrictions ease, says its group chief executive officer Jeffrey Chew.

He, however, warned that the property market will be weighed down by continued economic uncertainties caused by the prolonged pandemic situation which could result in cautious household spending, reduced business expenditure and a weakened employment market.

Overall, Chew cautioned that the business environment is expected to remain challenging for the rest of 2021.

Having said that he believes that the low-interest-rate environment and the stamp duty exemption under the homeownership campaign will remain crucial to incentivise property purchases.

With that in mind, Paramount said its property division has lined up a few projects for the second half of this year in Klang Valley, namely The Atrium and Arinna Kemuning Utama, it said in a statement last week.

Paramount posted a net profit of RM1.62 million in the second quarter ended June 30, 2021 (2Q FY21) compared to a net loss of RM4.01 million a year ago.

The group attributed the improved profitability to the low base of last year, coupled with higher revenue due to containment measures implemented to curb the spread of Covid-19.

Its revenue for the quarter almost doubled to RM127.45 million from RM64.2 million a year ago.

For the first half (1H FY21), its net profit was RM3.92 million compared with RM462.63 million boosted by a divestment gain a year ago. Its six-month revenue rose almost 50 per cent to RM279.26 million from RM186.31 million previously.

Paramount said for 1H FY21, it achieved property sales of RM309 million, which was 62 per cent higher against RM191 million in the corresponding period last year.

The group achieved higher property sales despite having launched fewer property units in 1H FY21 (217 units) as compared with the launches in 1H FY20 (548 units).

The property division achieved higher sales from projects such as Bukit Banyan in Kedah, ATWATER in Selangor and Utropolis Batu Kawan in Penang.

Find out more about Paramount Property’s It’s Real massive deal!

Paramount has unbilled sales of RM1.03 billion as at June 30, 2021, providing some form of visibility on its cash flow in the near term. However, it said that the pace at which the unbilled sales can be converted into billings would depend on the construction progress of the projects.

Source: NST Online

Most hotels here are waiting till mid-September to re-open as Penang is expected to have by then 100% of its population getting at least one Covid-19 vaccine dose.

Malaysian Association of Hotels (MAH) Penang Chapter chairman K. Raj Kumar said although hotels are allowed to re-open now, not many were taking in guests yet.

“I did expect there to be an increase in guests this weekend due the long weekend but some hotels have not reopened. Along the beaches, only a few resorts are open. Most will only reopen next month,” he said.

Raj Kumar said this was because overhead costs was high with too few guests at the moment.

“It is not worth it for hotels to open when there are only a few bookings as the occupancy rate has not picked up.

“We believe when the second dose is given to all, everyone will be more comfortable about staying in hotels,” he said.

The government had announced that tourism activities involving homestays and hotels within the same state for those fully vaccinated is allowed for states under Phase Two and beyond of the National Recovery Plan.

Association of Tourism Attractions Penang chairman Ch’ng Huck Theng said people were still being cautious.

“The vaccination process is ongoing and we will reach herd immunity soon. Local spots like cafes are still not allowing dine-in as well,” he said.

At Penang Hill, hikers are allowed to take the train down, since the activity is allowed as an outdoor recreation, but local tourists cannot take the train up for a leisurely visit.

“We have noticed there are fewer hikers than before and we do not let them take the train up, only allowing them to use it to make their way down from the top of the hill or the midway point,” said Penang Hill Corporation (PHC) general manager Datuk Cheok Lay Leng.

He said the rule was set because it was hard to differentiate between hikers and tourists.

“There are people who have tried to go up but we do not let them,” he said.

M Summit 191 Executive Hotel Suites general manager Moh Wei Ken said the property secured a 45% occupancy for the long weekend by offering attractive packages for fully vaccinated guests.

“We are confident this number will pick up in the next few days from walk-ins and last-minute bookings,” said Moh.

Source: TheStar.com.my

There is a potential rise in abandoned projects as the Covid-19 pandemic drags on with high daily cases.

Property and legal experts told The Edge Malaysia in a report this this week that there could be potentially “millions, if not billions, of ringgit worth of projects being abandoned once the movement restrictions or bank loan moratorium is over”.

“Banks can’t foreclose for now until the moratorium is over. But with the prolonged lockdown, I will not be surprised if some property developers experience cash-flow hiccups next year,” an abandoned project specialist who declined to be named said.

“As work progress is slow and sales low, the situation could get worse if they are unable to find an alternative source of funding or even a new investor,” he said.

He explained that property developers targeting the M40 and B40 purchasers “may find it challenging to market and sell their products”, owing to numerous job losses and salary cuts among the two groups.

Meanwhile, the weekly also reported that some developers “growing increasingly concerned as they have yet to obtain approval for an extension of late delivery of vacant possession (VP) due to the lockdown this year”.

“Without the mandatory extensions, developers may have to pay huge liquidated ascertained damages (LAD). Some may face issues with the authorities and be left with no choice when they run out of money and funding to continue with the project,” said the abandoned project specialist.

Another expert feels that there will likely be more abandoned projects involving commercial properties rather than residential homes.

Stanley Toh, valuer and real estate agent at LaurelCap Sdn Bhd “observes” that there are fewer incidences of property developers defaulting on housing projects.

He added that “abandoned projects are more likely to involve commercial assets such as SoFo (small office/flexible office), SoVo (small office/versatile office), offices and retail lots”.

Commercial and construction partner at Hakem Arabi & Associates, Lawyer Ranjan N Chandran, is also anticipating “a rise in abandoned projects owing to the economic slowdown and developers being cash-strapped due to the pandemic”.

He suggested a “tax waiver” to developers as one way to prevent projects from being abandoned.

Savills Malaysia deputy managing director Nabeel Hussain told the business publication that the pandemic has caused developers be very cautious with new launches, “so hopefully they won’t be too stretched”.

“That said, a period of severe economic turmoil such as is seen now almost always results in some level of casualties,” he added.

Source: EdgeProp.my

Construction of The Zen affordable housing project in progress.

Penang will seek the help of new Housing and Local Government Minister Datuk Seri Reezal Merican Naina Merican to provide affordable housing for its people and also an allocation of RM100 million for its maintenance programme for 2022.

State Local Government, Housing, Town and Country Committee chairman Jagdeep Singh Deo said he would be sending a letter to Reezal Merican today, explaining the state’s priority for affordable housing and the need for the Federal Government to play its part.

Jagdeep Singh showing the letter he would be sending to Reezal Merican requesting for Federal housing aid. Also present are Ainul (right) and Tan (second from left).

“Although we are a small state, we pay the most tax. So, we deserve to be given affordable housing.

“We’ve done a lot (for housing). But where are the units from the Federal Government?” Jagdeep said after making a spot check at the ‘The Zen’ affordable housing project in Bayan Mutiara today.

Jagdeep speaking to some of the construction workers and officers when conducting a spot check at The Zen affordable housing project.

Among those present were Penang Housing Board general manager Ainul Fadhilah Samsudi and Asia Green Group director Tan Li Mei.

Jagdeep said he hoped to have a meeting with Reezal Merican to continue a strong relationship as he has had with Reezal’s predecessor Datuk Zuraida Kamaruddin. Reezal Merican held the Youth and Sports Minister’s post previously while Zuraida is now the Plantation, Industries and Commodities Minister.

“Penang has spent nearly RM300 million for the maintenance of public and private (low-cost and low medium-cost) housing schemes. The money is spent on upgrading lifts, changing leaking roofs and water tanks.

“We thank the Federal Government for allocating nearly RM30 million previously and for next year, we have requested for RM100 million allocation. And we would like to know how much will be allocated to Penang.

“Our letter will include several other housing issues, including the urban regeneration programme,” Jagdeep said.

He said the state government aims to build 220,000 low-cost, low medium-cost and affordable units for the people of Penang by 2030 in line with the Penang2030 vision for a ‘Family-Focused, Green and Smart City that Inspires the Nation’.

To date, he revealed that 120,000 such units have been built in the state.

Construction of The Zen affordable housing project in progress.

The Zen housing project, which is being developed by Asia Green Properties Sdn Bhd, will have a total of 1,200 affordable units. Each unit is 850sq ft, costing RM300,000 and above.

Tan said the ongoing Covid-19 pandemic has disrupted construction works for The Zen project.

“We had earlier planned to complete the project by the end of 2022 but with the unpredictability of the Covid-19 situation, the construction may be completed by the beginning of 2023.

“The construction is not just hampered by the lockdowns but even when we are able to operate, we have difficulties in getting the supply of materials because some industries were still not functioning.

“The Zen is now approximately 40% complete. It’s not that we want to delay it and we hope the buyers will understand the challenges we are facing too,” Tan said.

Source: Buletin Mutiara