Property valuation plays a quiet but important role in strata development. It is not about market price or selling value. It is about protecting the building and the people who live or work in it.
In strata developments, many owners share one building. That means shared risks too. When something goes wrong, such as a fire or structural damage, the question is simple: is the building insured for the right amount?
This is where property valuation matters.
A proper valuation shows the reinstatement value of the building. In simple terms, this is the cost to rebuild the property if it is badly damaged or destroyed. Without an updated valuation, insurance cover may fall short. And when that happens, owners may need to pay the difference themselves.
Legal Requirement Under the Law
Property valuation in strata buildings is not optional. It is required by law.
Under Section 94, Strata Management Act 2013 (Act 757):
- Any building shall be insured for at least the reinstatement value of the building indicated by the last valuation obtained for the building.
- For the purpose of determining the reinstatement value of the building that is required to be insured under this Part, a reinstatement valuation of the building shall be obtained from a registered valuer at least once every five years.
- The cost of such valuation shall be paid out from the maintenance account.
This section makes three things clear. First, the building must be insured based on the latest valuation. Second, the valuation must be done by a registered valuer and updated at least once every five years. And third, the cost is a shared cost, paid from the maintenance account.
Why Regular Valuation Is Important
Building costs change over time. Materials, labour, and compliance requirements all increase. A valuation done years ago may no longer reflect today’s rebuilding cost.
If insurance is based on an outdated figure, the building may be underinsured. That risk usually only becomes visible after a major incident. By then, it is too late.
Regular valuation helps the Management Corporation or Joint Management Body make informed decisions. It supports proper insurance coverage and reduces disputes among parcel owners.
Good Governance and Accountability
Getting a valuation on time also shows good management practice. It demonstrates that the management body is meeting its legal duties and protecting owners’ interests.
Most owners may never read the valuation report. And that is fine. What matters is knowing that the building is properly insured and managed responsibly.
And that’s why property valuation matters in strata development.
Property valuation is not just a compliance item. It is a practical step to protect the building, the insurance cover, and the interests of all parcel owners.
Done properly and on time, it helps avoid financial gaps and unnecessary disputes later on.
At Ziyad, we offer this service for property valuation. Please contact us via email at contact@ziyad.com.my or fill up our contact form at www.ziyad.com.my/contact.
