PETALING JAYA: The Malaysian Institute of Estate Agents (MIEA) has identified up to 12 proptech companies that it says are illegally operating real estate practices and is in the midst of preparing to lodge police reports.
MIEA CEO Soma Sundram (pix) said since the release of its statement last week, more proptech companies illegally carrying out real estate agency work have been identified, based on information provided by its members.
“We have identified 12 companies that are directly and indirectly involved in real estate transactions. We are concerned as to them infringing on real estate practices. We’re going to make a police report and are now collecting information on these companies, to see how they have contravened Section 22c of the Act,” he told SunBiz.
According to Section 22c of Act 242, all real estate agents and negotiators are required to be registered with the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP) and any individual or firm (aside from property owners) collecting fees from real estate practices are deemed to be in contravention of the law.
‘If they (proptech firms) want to practise real estate, we welcome them. They just have to become a registered firm, then we won’t have an issue because they will follow the law. Any form of illegal estate practice is an issue with law and its practitioners’.
“Some proptech companies may hide it (fee collection) in different ways but as long as money is collected in whatever shape or form, it is considered illegal,” said Soma, adding that such proptech companies have been operating for as long as three to four years.
Last week, MIEA issued a statement voicing concerns over proptech start-ups claiming to provide real estate technology solution and circumventing the law by carrying out real estate practice illegally.
MIEA urged BOVAEP, the regulators of the profession, and the Finance Ministry to take the necessary action against these “proptech brokers” to protect the public and the laws of the country.
It is learnt that a proptech firm received a cease and desist order from the government late last year, but business operations resumed after talks with the government officials.
Speedrent founder Wong Whei Meng opined that such conflicts are unnecessary as real estate agents and proptech firms have the same goals.
“If we provide bad service, then there would be no traction for proptech start-ups. My stand remains the same, that the market decides what they want to use.”
He said Speedrent, a one-stop online rental platform, does not charge any homeowner fees, while homeowners choose whether to buy insurance from the platform only after a tenant has been found for the homeowner.
“Simply put, Speedrent is an insurance sales platform that provides free services to homeowners while assisting homeowners in finding tenants,” Wong said.
He likened the goals of proptech firms with start-ups such as Grab and Airbnb, which is to provide an enhanced customer experience for all via the use of technology.
“With the rapid advancement of technology, everyone should look at re-optimising their services. All industries have the potential to provide a more enhanced user experience. We’re living in a digital age and should innovate to keep up,” Wong said.
He said that the law is out of date and has not been amended for 20 years, and urged the government to revise it as soon as possible.
Established in 2015, Speedrent is a free-to-use automated platform connecting landlords directly with tenants with rental protection.
Meanwhile, PPC International Sdn Bhd managing director Datuk Siders Sittampalam said the emergence of proptech companies has not really affected his business but emphasised the importance of the regulator’s role.
“We are moving towards a digital economy. But there must be regulators, this is to protect clients. That is the objective of the act,” he said.
“The act can be adapted as technology advances but not at the expense of the clients or public. How the act should be adapted would be up to the authorities to decide and it would need to be amended at Parliament.”
He said under existing law, proptech companies should not be allowed to act as agents as they are not regulated by BOVEAP, thus members of the public are not protected if anything untoward happens.
“I would like to stress that those who are not registered with BOVEAP are against the law, against an act of Parliament,” he said.
Source: The Sun Daily