The world is changing at a rapid pace, as we are all turning towards digitization of our lives.
Even industries not ready for this change, get the demand for a transition from their customers, as their customers have already invested in the latest technology, and that sits within their pants pocket or handbag, in the form of a mobile device.
It is the first time in the history of the world, where the end-user has invested earlier in the infrastructure required for a digital transformation, than some of the industries.
Some industries try to fight back in an opposite direction, as they never were interested in digitization yet. It seems they rather remain position, and hold on to old strategies they are familiar with for decades.
In Malaysian media an open fight is delivered by some of the country’s organizations as MIEA and BOVEA. Their stand seem to be, to openly slander solution providers, as obviously they are not on a route towards digitization yet.
What is hurtful to see, is that they put all property technology providers (read PropTech) in one basket, and sable the complete PropTech industry down to the ground. Labelling them as illegal. Because, these organizations must show muscle to the industry in order to keep some of their members content.
Legislation, Grey Areas & Trailblazers
Worldwide, legislation is always behind in fast growing markets, like selling property. Lawmakers are extremely slow to adapt, and even when new laws are put in place, the fast moving industry is five steps ahead.
This is especially true for industries which have not reached maturity yet.
Innovation requires trailblazers. Young companies with fresh ideas, bringing new products and services to the marketplace.
Knowingly or unknowingly these young companies might be on or over the edge of local laws. They might have entered, the so called grey areas of the local law.
Many of these new companies, lets call the startups from now on, have healthy business practices. They build solutions well within the realm of the local laws and regulations. Legal is even part of their development process.
However, startups are so fast moving, and full of creative ideas that sometimes the phrase; “build first, apologize later” applies.
In these new industries many jump on the bandwagon and try their luck, often not knowing what they get themselves into.
Trailblazers are a very interesting and innovative part of our new economy.
We have to admit, that some solution providers get in the market, without any other knowledge than web or app development, and think they can tap into a massive market they do not understand yet. Trailblazers yes, but without water one also does not survive the desert.
Dinosaurs & Market Protection
On the other end of the spectrum dinosaurs try to protect their market share, which they often have accumulated over many years.
The old-timers in the industry see all forms of technology as a treat to the industry. Without understanding the actual functionality of the various platforms.
Its fully understood that certain mechanisms in the property industry require licensed agents, and companies, in order to rent out, or sell property units.
According to MIEA only licensed agents with BOVEA are allowed to rent or sell properties.
Even in the media we read that only licensed agents are allowed to rent or sell property. And even if the local law stipulates this, then this statement is only partially true.
As any property owner can rent or sell his or her property, without the aid of a licensed agent.
Some platforms offer individual house owners to list their property for rent or for sale. That’s it. It’s just an advertising platform to aid property owners.
As long as the platform is not legally involved in the transaction, the law is adhered to.
A solution provider would be legally involved in the transaction if they take a piece of the proceeds, in form of a commission. In these cases the solution provider needs to be licensed. But nothing is stopping them to get a property agent license, and do their business online, instead of from a sales gallery, or roadshow.
Property & Network Marketing
There are now even property network marketing solution providers who are perfectly licensed have entered the Malaysian market. These companies share part of their proceeds of any sale in their mobile app with their members. As they are legally solid in both the property, as also part of the direct sales of the business. There is no stopping them. Click here for free membership.
Licensing & Funding
Obtaining the correct legal licenses for any type of business is essential for survival. Startups do need to check on their own legality, this is also important for their funding.
The startup sphere without funding would hardly survive. Investors, do due diligence on the legal aspects of companies too. Therefore it is important to spend some funds on having the legal aspects of a business checked.
New PropTech companies entering the market do need a long-term vision, sufficient funding, and adhering to possible legal requirements.
In The End
In the end, the market matures, rotten apples get shaken out, local laws adapt, and business is stable.
Until the next wave of trailblazers arrives to shake up the market a bit.
It is okay to seek the grey areas of the law. That makes a true trailblazer worthy. But there should always be an effort to comply with the law.