Hong Kong’s property management industry is about to get a whole lot more “professional” following the conclusion of the third reading of the Property Management Services Bill yesterday. The bill prescribes a licensing regime for property management companies and practitioners, operated by a new statutory regulator and standards promotion body.
In the past, property management practitioners (PMP) and the companies they work for have not been subject to significant regulation, resulting in a higher risk of ethical or professional lapses that might negatively impact building hygiene and safety.
To address this risk, the new licensing regime requires managers or supervisors of property management service providers to hold relevant academic credentials, professional qualifications and relevant work experience. A two-tier system — designed to encourage career development within the industry — establishes the designations of “registered professional property manager” (Tier 1) and “licensed property management officer” (Tier 2). According to a recent Hong Kong Institute of Housing survey, there are about 4,000 Tier 1 PMPs and 7,500 Tier 2 practitioners in the territory.
For their part, licensed property management companies (PMC) must maintain a prescribed number of PMP-license-holding directors and employees. Following a three-year transition period, unlicensed practice, whether by individuals or companies, will be prohibited.
New statutory regulator
Managing this licensing system will be a new Property Management Services Authority (PMSA), led by 20 chief executive-appointed individuals from the industry. The government has estimated that this self-financing statutory body will have an annual budget requirement of around HK$30 million per year, most of which will pay the salaries of 60 staff members.
To cover its expenses, the authority will generate a government-estimated HK$12 million to HK$14 million in licensing fees and around HK$18 million in a levy on property transactions. Each transaction will require payment of about HK$200 to HK$300.
Some organisations, such as the Law Society have previously taken issue with this two-pronged financing method, claiming that the levy is not in line with a “user-pays” principle as small property management companies may not need to hire PMPs. The Law Society has also raised concerns that the levy might raise the financial burden of purchasers.
The administration has dismissed these concerns, claiming that property management companies have an incentive to pay for good regulation that can indirectly raise the value of their properties. As for the possibility that consumers might foot the bill, the government believes the levy value will be low enough to prevent this from happening.
Broad industry support
To date, the bill has received broad support from many industry and professional bodies, such as the Hong Kong Institute of Housing (HKIH), the Royal Institute of Chartered Surveyors (RICS), the Hong Kong Institute of Facility Management and the Hong Kong Institute of Surveyors.
“Currently there are a lot of variations in qualifications and experience level of practitioners in the industry,” said Dr. Jonnie Chan Chi-kau (陳志球), President of the HKIH, following the successful conclusion of the third reading. “Although HKIH evaluates professional standards of our members on regular basis, there is no recognised monitoring standard industry-wide and we are unable to monitor those who are not members of HKIH.”
RICS’ chairman also had positive words. “Proper management of properties ensures overall safety and minimises risks that may arise as a result of improper maintenance,” he noted yesterday.
However, Chan cautioned that bigger challenges lie ahead. “Passing of the Property Management Services Bill is only the first step towards implementation of a comprehensive licensing regime. Future development and promotion of the regime is actually more important,” he said.
Consequently, the industry is likely to await the announcement of the PMSA’s membership roster with much anticipation.
Latest posts by Contributing Authors (see all)
- A World Cities Summit without Asia’s World City? – July 25, 2018
- Hong Kong and Beijing: A Shared future – Christine Loh at Bright Hong Kong – June 19, 2018
- Ola! Mexicans unite to save Hong Kong and global seas – June 12, 2018