FAQs
- What is Pool-Rental Management Agreement (PMA)?
The PMA is a scheme of asset management where FLH will manage the property for the purchaser together with other purchasers of the project to be operated as properly managed and operates service apartments. Hence the collection of the properties being labeled as a Pool.
FLH will use its expertise in the hospitality industry and marketing skill to operate the Pool as a service apartment akin to a hotel. - How FLH manage the unit/property?
Leveraging on the strong "Fairlane" brand to promote and market serviced apartments owned its customers.
Offered as an "after-sales" service to help enhance asset value of properties owned by investors/customers.
Generating higher rental yields for these properties by establishing a high standard of quality management and hospitality services.
FLH target mid to long term stays but will promote short term stays during peak seasons to optimize on market returns.
FLHSB will inspect and maintain the unit of property to ensure it is in good leasable condition - What is the different between PMA and the other scheme?
The primary difference is the PMA is performance orientated as opposed to a fixed return scheme. In a lease-back or guarantee return scheme the return for the Owner is stagnant without any revision. - How does the Pool scheme generally operate?
In essence the Owner must be prepared to fit the unit Furniture and Fittings to the description of the Manager to collectively operate the Pool as single hospitality centre.
This will involved an initial capital injection by the Owner. There a re provisions for the Manager to advance such capital expenses at his discretion. But this discretion is not a compulsory obligation of the Manager. The Manager is under no obligation to make any such advancement and is unlikely to accede to any such request.
The Manager will then generate income from the rental receipts of the Pool and then apportion the earnings after deduction of cost to the Owners. - How is the earning of an owner calculated?
Stage 1:
Gross Income = Gross Revenue Generated x Square Footage of Parcel / Aggregate by the Pool over an sq footage agreed period of the Pool.
Stage 2:
Net Income = (Gross Income) – (Service Tax) – (Management Fee of 3% from Gross Income) – (Operating Expenses) – (Management Incentive of 7%)
*Base on the contract FLH will supply to the Owner a quarterly statement with payment of Income.
- What is Maintenance Contribution?
- What if the pool does not generate income? will the owner still have to bear cost of the pool?
In strict theory the answer must be in affirmative
In reality base on market study perhaps that prospect would be minimal if non-existence - How does the Manager control the Pool?
The Owner will have to grant to the Manager a power of attorney to manage the subject parcel. - How does one exit from the Pool?
Where there is no long term tenancy in place for the parcel of the Owner.
By Owner:
3 months' notice plus liquidated damages of: the un-expired period of contract x Average Management Fee collected
Where there is a long term tenancy in place:
3 months' notice plus a liquidated damages of: the un-expired period of contract x Average Management Fee collected + 50% of the monthly rental of the unexpired period of the tenancy contract in place for the Owner's Parcel - What is the duration of the contract?
3 + 3 (automatic extension unless refused by the Manager) - Can the owner sell in between the contract?
Yes, but FLH has a first option to purchase base on:
• Origin Price < Market Value;
the purchase price shall be the Market Value
• Original Price > Market Value;
the purchase price shall be the Original Price
• Offer by Third Party > Original Price;
the purchase price shall the offer price by the Third Part. - What is the difference between the Sinking fund for Pool & Management (JMB)?
It is a fund maintained by the Manager to refurbishing, repairing, restoring or replacing the Furniture and Fittings as it wears down due to ordinary wear and tear.
Payment to the management of the building is for maintenance of the common property of the building - What are the charges should the owner decide to terminate the contract before the maturity date?
The liquidated ascertained damages as provided in the above is agreed to be the actual loss of the Manager that would not impose any obligation whatsoever on the Manager to prove its actual loss to stake a claim or the same.
Total management Fee ÷ 3(Three) months ÷ 30 days x days of the total unexpired days (excluding 3 months termination notice) = (to be claimed as liquidated damages. - Can the owner have a copy of the details statement?
The Owner may subject to prior written arrangement with the manager and to pay to the Manager a reasonable fee in the accommodation of the request of the Owner to inspect the books of account of the Operating Account and the OPEX to the extent that they relate to the calculation of the Owner's Income.
The Owner shall not be entitled to request for the making of any copies of books of accounts of the Operating Account and the OPEX. The Manager shall give all reasonable information and explanation relating to the preparation of the books of accounts of the Operating Account and the OPEX and the business of managing the Property as the Manager may reasonably determine - What are the charges incurred for Administration, Capital Expenditure, and Staff Cost?
Admin - Actual
Capital Exp - RM100 per member per month Staff Cost - RM50,000 - How do you calculate the management fees and incentive fees?
Management Fees - 3% of Gross Revenue
Incentive fees - 7% of Gross Operating Profit - How to calculate return of investment?
Gross Operating Profit - Management Fees - Incentive Fees
_________________________________________ x 100%
Average Investment per Quarter - How do you sell the units?
Owner can sell but to ensure that new purchaser agree to comply to the PMA.
It is a fund maintained by the Manager to refurbishing, repairing, restoring or replacing the Furniture and Fittings as it wears down due to ordinary wear and tear.
This is to ensure that the Pool managed by FLH will be maintained at the highest quality and level at all times
The regularity of the exercise will be determined by the Manager using prudence and reasonableness.
The fund will be maintained as a trust fund and any excess unused fund will be returned interest free upon the termination of the Pool or the Owner withdrawing from the Pool.
It is important to stress that this is not equivalent to the maintenance fee payable to the management of the building.
It is also important to advise that the OPEX does not mean that the Owner does not need to pay the management of the building as the OPEX is intended to manage in the Pool or in other words the interior of their units while payment to the management of the building is for maintenance of the common property of the building.
