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Managing together (Part I)
02/02/2002 Published in NST-PROP A Buyer Watch Article by National House Buyers Association

The much-awaited Building and Common Property (Maintenance & Management) Bill augurs well for strata unit owners

The proposed Building and Common Property (Maintenance & Management) Bill, which is expected to be tabled in Parliament some time this year, is aimed at alleviating the maintenance and management problems that have become a way of life for stratified property owners.

The Bill will provide the regulatory framework for subdivided building management during the transition period after delivery of vacant possession and prior to the establishment of Management Corporation under the Strata Titles Act. The Bill calls for the establishment of joint management establishment (JME) which is a committee comprising developerís representatives, managing agent and residents.

The JMEís task is to undertake maintenance and management of the sub-divided building (such as flats, condominiums and town houses) and common areas and to ensure the good condition of the building is preserved so that the potential for capital appreciation is not adversely affected.

The spirit of the proposed Act is good and the Minister of Housing and Local Government should be empowered to make rules that are fair for the purpose of providing a proper standard of management and maintenance in respect of buildings and common property.

However, one of the first things that should be determined if the proposed Act is to be effective is the ration of the owners' to developer's representatives in the JME. The JME would have defeated its purpose if there should be deadlocks when it comes to inevitable decision making matters.

The House Buyers Association (HBA) urges the Ministry of Housing and Local Government to allow the appointment of Commissioner of Buildings for each housing zone or district and to empower him or her with sufficient authority to resolve the various issues in a strata-scheme management. This will enable the JME to seek immediate recourse in case of disputes. There should be a reasonable time frame for the Commissioners of Buildings and their officers to take action when a complaint is received.

The HBA has embarked on an "experiment", whereby we have recommended the setting up of a JME in several stratified residential projects in an effort to resolve disputes between owners and developers. One of our recommendations for transparency in the management of of the building was that owners' representatives should be made signatory to the maintenance and sinking fund accounts. The results of our efforts appear to be encouraging in most cases, except when owners' representatives do not see eye to eye with one another and chase after their own interests instead of aiming for a "win-win" situation.

In our experimental efforts, we have recommended that the duties of the "pro-tem" JME include the following:

  1. To properly maintain the common property and keep it in a state of good and serviceable repair.

  2. To determine and impose charges that are necessary for the repair and proper maintenance of the common property.
  3. To comply with notices or orders given or made by the local authority or any competent public authority requiring the abatement of any nuisance on the common property, or ordering repairs or other works to be done in respect of the common property or other improvements to the property.
  4. To prepare and maintain a register of all purchasers of the building.
  5. To maintain the building maintenance account, to ensure it is audited and to provide audited financial statements  to unit owners.
  6. To enforce house rules for the proper maintenance and management of the building.
  7. To ensure developers insure the building to the replacement value thereof against fire and such other risks as may be determined.
  8. To be informed of action to apply any insurance moneys received by the Developer in respect of damage to the building so as to rebuild and reinstate it.
  9. To promote and educate building owners on the concept of communal living.

If all goes well, and the Bill is passed, owners can look forward to having a greater say in the management and maintenance of their buildings. However, the promise of better things to come will depend very much on the extent of the authority given to the Commissioner of Buildings and the JME's.

Ideally, as a representative body for house buyers, HBA feels the JME's powers should extend to these areas:

  1. To enter into contracts.
  2. To collect from purchasers, maintenance and management charges in proportion to the provisional share units of their respective parcels.
  3. To authorize expenditure for the carrying out of the maintenance and management of the common property.
  4. To inform the developer to recover from any purchaser any sum expended by the establishment in respect of that parcel in complying with any such notices or orders.
  5. To seek developer concurrences in order to hold, enjoy, convey, assign, surrender, yield up, charge, mortgage, demise, reassign, transfer or otherwise dispose of or deal with, movable and immovable property and interest vested in the Establishment.
  6. To do all things reasonably necessary with the concurrence of the developer for the carrying out of its duties.

Managing together (Part II)

 

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