New Fee for Malaysian Estate Agents

Dear All,

At a seminar held for the property professionals at Hotel Istana yesterday morning (Oct 6), the Board of Valuers Appraisers & Estate Agents of Malaysia (a.k.a "BOVAEA" or Lembaga Penilai Pentafsir dan Ejen Hartatanah Malaysia) announced, among others, the new scale of fees for Malaysian estate agents applicable to any sale or purchase land, buildings and chattels by way of private treaty, tender or other mode of disposal or acquisition as follows:

* 3% (an increase from 2.75%) for sale or purchase of land and buildings;

* 10% (like before)of the proceeds for sale or purchase of chattels (or, movable properties) including plant and machinery.

Subject to a minimum fee of RM1,000 per property.

The new scale of fees does not apply to:

1) Project marketing; and
2) Marketing of foreign properties in Malaysia or Malaysian properties in foreign countries - In both cases, the agency fee chargeable will be on negotiated basis between the agent and his client;

Professional fees, commissions or agency fees chargeable by Malaysian real estate agents on tenancy or leasing remain unchanged.

The new scale of fees were introduced by the Board in the exercise of the powers conferred by section 32 of the Valuers, Appraisers & Estate Agents Act 1981 (Act 242) with the approval of the Minister of Finance and the due process (gazette, etc.) - The full text by the Lembaga Penilai on the new scale of fees may be read at HERE!

Regards,
Douglas GT Tan

P/s: A representative from MITI also briefed the property professionals about Malaysia's commitment to Asean to liberalise the propety sector (re: services under codes CPC 821 & 822) up to 70% by year 2015; however, to hasten the contribution of the services sector to Malaysia's economic growth or GDP, the Malaysian Cabinet has recently made the decision to full liberalisation of the sector by end of 2012. Many participants felt that they have not been adequately prepared to face this eventuality in so short a time - it's like going to war (read: marketing or business war) in just a few years' time without concrete or comprehensive plans/programmes to prepare the foot-soldiers to face it. Your comments, please.