PETALING JAYA: Home rental platform Speedhome has urged the Malaysian Institute of Estate Agents (MIEA) to change its perspective on seeing tech companies as illegal brokers.
Speedhome CEO Wong Whei Meng said while it welcomed MIEA’s Landlord Insurance as a big advancement for market maturity, he vehemently disagreed with MIEA CEO & past president K. Soma Sundram’s statement on tech companies trying to bypass the law.
“Soma is viewing the property industry from a narrow lens that only real estate practitioners are allowed to serve the public, undermining the hard work and innovation of tech companies who have created new solutions and value for the market,” Wong said in a statement today.
By having more diverse backgrounds of people and industries to look at the market, Wong said it spurs new ideas to old problems by taking different perspectives. Speedhome, for example, has pioneered the concept of Landlord Insurance in the region together with Allianz General Insurance Bhd to offer insurance in the market.
With more players like Speedhome participating in the industry, it has resulted in a more cohesive environment – from transaction, safety and transparency. In Landlord Insurance specifically, Speedhome claimed that it has created far superior protection compared to the traditional deposit model.
Wong explained that for an insurance company to underwrite and mitigate the risk associated with tardy tenants, an insurance agent needs to properly assess the tenant’s profile. For that to work, a new process was introduced to adhere to more stringent Know Your Customer requirements like checking payslip, bank statement and credit checking. This is unheard of in the traditional deposit market; hence the new process is more objective in screening tenants and ultimately safer transactions for the landlord.
“MIEA did not take a more progressive view to include more aspiring players, be it tech or non-tech, to build a more mature market. Speedhome is a licensed general insurance agency and generates income through selling insurance policies. Real estate practitioners are entitled to a commission for a property rental transaction as permitted by the law; Speedhome on the other hand is a free-to-use platform with the option to purchase insurance. From a business revenue point of view, an insurance agency is at a disadvantage. Yet, it did not deter Speedhome from serving the market because we passionately believe we are providing value to the market through a different lens,” added Wong.
While Speedhome deducts payments for the insurance purchased by landlords from their first month’s rental, Wong said it is factually incorrect to say that this practice is overcharging the landlords. At the end of the day, landlords enjoy greater protection than the price of the insurance they pay as the insurance coverage can go up to RM42,000.
“Speedhome is a licensed insurance agency and under no circumstances should it be labelled as a real estate agency; hence MIEA must change its habits of calling tech companies that participate in the real estate industry as ‘illegal brokers’.”
Wong urged MIEA to double down effort in combating the players that are truly contravening the law instead of turning down tech companies that are trying to provide innovative solutions towards the market’s long-existing problems and ever-changing demand.
On Tuesday, MIEA launched the Landlord Insurance policy which will help landlords gain independence against the risk of runaway tenants, rent arrears together with potential damages to their asset or property when faced with bad tenants.
Soma had highlighted that tech companies guise as insurance brokers to bypass the law thus avoiding enforcement by the authorities.
“Their modus operandi is to attract tenants by not collecting deposits from them and ask landlords to take up an insurance scheme to protect them against tenant. The premiums they collect for this policy are far higher than the actual cost of the premiums to be paid. For example, they collect one month rental and after deducting the premiums they use the balance as their fees. This is clearly a strategy to bypass the Valuers, Appraisers, Estate Agents and Property Managers Act which only allows registered agents to collect and hold deposits and collect fees for service rendered in a real estate transaction,“ Soma said.