Ladies and Gentlemen

Good afternoon

1. It is my pleasure to join you today to launch the “Singapore Standard for Performance of Managing Agents for Strata Residential Properties”, or SS519. I would like to congratulate the industry and SPRING Singapore for the successful introduction of the first national standard developed for this category of services in Singapore. In fact, I was told that this is also the first such standard in the world.

Current industry practice

2. Singapore currently has about 2,300 Management Corporations (MCs) for strata residential properties. Council members in most MCs are residents, who have volunteered their precious time and set aside their other commitments, to look after their own estates. In addition, most council members are laypersons who may not have in depth knowledge, experience or the necessary training to effectively manage the property. Managing Agents, therefore, provide useful support to the MCs.

Appointment of MAs

3. Currently, about half of the MCs employ property managers and Managing Agents (MAs) to help run their estates. Going forward, this number is expected to increase. An average MC, which comprises about 50 subsidiary proprietors (SPs), would find it advantageous to appoint a MA, to help manage and maintain their estates. In addition to secretariat and administrative duties, the expertise and advice of the MA in maintaining the common property, and in complying with relevant laws, is key to effective management of a strata property.

4. The Building Maintenance and Strata Management Act (BMSMA) governs the appointment of MAs. With the recent revision of the BMSMA in 2005, MAs can now be appointed for a term of up to three years, instead of one year. The MC and residents must review the MA’s performance at every annual general meeting, to decide if the MA’s service should be continued. To facilitate this, the SS519 will provide a set of professional standards as a benchmark for the reviews.

The New Singapore Standard (SS519)

5. The SS519 will also serve as a mechanism to raise the professionalism of our property management industry. Besides performance standards and guidelines, SS519 also contains a specimen agreement on the appointment of MAs, which MCs can use as an employment contract between the MA and the MC. The agreement spells out the following:

The agreement also stipulates

6. The SS519 also provides an example of the decision making process of the MC to appoint or terminate an MA. With this new standard, the industry no longer needs to rely on informal arrangements such as the current “letter of appointment”, or oral agreements.

7. The development of SS519 is worthy of applaud as an industry-driven initiative. With support from the Building and Construction Authority and SPRING Singapore, these performance management guidelines were launched in 2001 as a pre-standard known as Technical Reference 3 or TR 3. Four MAs were involved in a TR3 pilot project with their respective MCs. The participants in the pilot project were happy that the basic contractual provisions had served as useful guides, and were flexible enough for either party to add or negotiate additional terms to suit their specific requirements. As a result, both parties saw a higher level of professionalism, and a better standard of maintenance and management of their estates.

8. A Working Group comprising experts from various stakeholder groups were then formed to revise TR3 after the industry trials. From there, the SS519 was developed. I am glad to note that SS519 is a result of our industry’s initiative and concerted efforts to instil professional service delivery by property managers and Managing Agents in strata residential properties. I would like to take this opportunity to thank the Association of Property and Facility Managers (APFM) for initiating TR3, and also the Working Group members for their hard work in completing the revision of TR3 to elevate it to a Singapore Standard.

9. This new industry standard is expected to raise the quality of service and professionalism of MAs as well as help to improve transparency. It will also reduce significantly opportunities for contention between MAs and MCs as to what is required of the service. This will free the MCs to focus on other equally important issues that warrant their attention and which cannot be delegated to the MA.

Accreditation Schemes for MAs

10. I am also glad to learn that there are plans for SS519 to play a significant role in the accreditation of MAs in Singapore. Accreditation of MAs is voluntary and industry-driven, which is consistent with our policy to promote self-regulation. Currently, there are two accreditation schemes of MAs in the industry.

11. Now that a common national standard is available for use, I encourage the industry to align both accreditation schemes to this set of standards. Both SPRING Singapore and BCA will also help to promote the use of SS519. I am sure the industry, and ultimately everyone living in strata residential properties, will reap the many benefits that the standard has to offer.

Conclusion

12. In conclusion, it is heartening to note that the industry has taken great strides to drive the formulation of the SS519. It is an excellent example of the industry taking active ownership of issues related to promoting higher level of professionalism and industry standards. It is also a testimony of the industry’s commitment to want to serve its customers better. Indeed, such active involvement of industry players bodes well for the future as it reflects the dynamism and vibrancy of the industry.

13. I wish all of you a fruitful seminar. Thank you.

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