In general, the working atmosphere and pace of the past few weeks were relaxed probably because of the Lunar New Year. Although a bit late, let me wish all members a wealthy and healthy year of the Rabbit! On 26 January 2011, I accompanied the President to a lunch gathering with the Under Secretary for Home Affairs, Ms Florence Hui and Deputy Director of Home Affairs, Mr David Leung. I take this opportunity to thank David for his time in speaking at our Discussion Forum on 27 January 2011 in respect of the proposed "Regulation of Property Management Industry". I noted that the Home Affairs Department has an initiative to review the Building Management Ordinance (Cap 344) and a Review Committee chaired by Mr Chung Pui Lam was formed. Despite the fact that the Committee did not involve any representative from the professional property management institutes such as the HKIS, the Deputy Director kindly agreed to relay our Institute's views to the Committee whenever needed. Indeed, the HKIS had a Working Group which rendered comments to the government during the BMO Amendments in the year 2000 and 2007. I have raised my concern that it is quite rare for an Ordinance to be amended three times within a period of 11-12 years. I attended two Spring Receptions on 10 February 2011, one being hosted by the Home Affairs Bureau and the other by the Hong Kong Association of Property Management Companies, and both were held in the Hong Kong Convention and Exhibition Centre. Incidentally, I took the opportunity to chat with several property management professionals and noted that their views in respect of the proposed regulatory framework were generally positive. However, some were quite concerned about the BMO review particularly on factors that will affect the administration of DMC. The Panel for Home Affairs of the Legislative Council invited the Institute to offer its views in its Panel Meeting on 18 February 2011. I attended the Panel Meeting and expressed the views of the Institute. Generally, these views were gathered from the Discussion Forum held on 27 January 2011. Thanks to Professor Eddie Hui for his efforts in preparing the summary. The Institute's comments to the Panel are attached with this Chairman’s Message for members' reference. Our views had invited quite a lot of media coverage in some major newspapers published on 19 February 2011. As in the previous year, the Institute organised a Media Luncheon on 15 February 2011 in the World Trade Centre Club. Mr Dick Kwok and I attended the luncheon and had a thorough discussion with several journalists. Upon sharing with them the Institute's views, they raised an interest in the proposed statutory framework to regulate property management industry. By the time you receive this issue of Surveyors Times, it should be getting quite close to the Award Presentation Banquet of the Quality Property and Facility Management Award (QPFMA). Gold and Merit Awards will be presented to the short-listed finalists in the Ceremony. I do hope that I can meet as many members as possible in this important event of the Council. Last but not the least, may I remind members of the implementation of the statutory minimum wage in May 2011. For those members who need to prepare a budget for their clients with financial year beginning on 1 April 2011, you should note the huge impact of this new legislation on the management expenses, particularly the portions on cleaning and security services. Regulation of the Property Management Industry The following is a summary of views submitted by the HKIS to the Panel on Home Affairs on 11 February 2011: (1) Regulatory Level and Qualification Standards There is a general consensus that the proposed licensing regime at company level helps to promote property management companies' (PMCs) status and to raise service quality, even though it will increase practitioners' liability. A two-tier licensing regime is preferred because small-scale PMCs might be unable to afford expensive licensing fee. HKIS recommends that the new system should follow the registration of general building contractors/minor works contractors currently adopted by the Buildings Department whereby a certain number of Registered Professionals are appointed as senior members and managers of the company as one of the licensing criteria. Likewise, all other property management service providers including owners' corporations and non-government organizations should be regulated. Whilst small and medium-sized companies shall also be licensed without exception, a transitional period may be implemented in order to allow ample time for meeting the new licensing requirements. However, HKIS has reservation on the licensing of property management individuals. Members suggested that exemptions f rom licensing assessments (at individual level) shall be given to registered surveyors, registered housing managers as well as members of some other professional institutions. Currently, professional property managers are already regulated by the rule of conduct of their own professional institutes, such as HKIS. Further licensing of individuals becomes only a "Belt and Braces" job. The current practice of team work and collective decision making process generates extreme difficulty and unfairness, with a licensed individual personally being held liable for his/her managerial action. Owing to a wide variety of specialists involved (for example property manager, technical manager, security manager, etc.), it will also be difficult to establish a single and effective licensing system, not to mention the huge administration and licensing fees anticipated which may ultimately result in unnecessary increases in management fees. To summarize, members generally preferred a licensing regime at company level since property management often involves team work and collective decision making processes. Such licensing regime will help to protect practitioners' best interest whilst at the same time, fulfill their responsibilities. There has been a suggestion that the licensing regime at individual level is less preferable because in fulfillment of responsibilities as an individual licensee, practitioners might potentially tarnish the authority of their PMCs. (2) Roles of the Proposed Body and Scope of the Regulations The proposed body should act as a regulator, supervisor, as well as disciplinary body. It should set up an enforcement section to ensure that licensees provide property management services in accordance with the codes of practice and/or codes of conduct established by the body. Members suggested that the proposed regulatory framework should specify all the rights and responsibilities of licensees (at company level), penalty systems, offences and defences etc. Since the proposed regulations will increase the liability of practitioners, these details are helpful to licensed PMCs in supervising their employees, as well as to individual practitioners in exercising their authority. Besides, considering that the government actively promotes the use of mediation to resolve construction disputes, the proposed regulations shall include provisions which encourage the use of mediation mechanism in property management industry. (3) Transitional Period A transitional period is necessary. Government funds could be allocated to public education during the transitional period (i.e. from now until the planned date of implementation) such that the public get to know the importance of establishing a licensing regime and regulatory framework for PMCs. (A full copy of our submission can be downloaded from the HKIS website at http://www.hkis.org.hk/hkis/html/upload/NewsPosPaper/posp148_0.pdf)