No light in the tunnel

12/07/2003 Published in NST-PROP A Buyer Watch Article by National House Buyers Association

Even with the creation of the Strata Title Board, owners are no closer to receiving their titles

According to our statistics, problems related to the issuance of strata titles are on the rise. Some might wonder what's the big deal about this piece of paper, and why we at the National House Buyers Association are giving it so much importance.

These are the reasons: Firstly, the strata title is the ultimate and conclusive proof of ownership for any stratified property, be it a condominium, commercial unit in a complex or shop-building, or just a simple apartment. When owners of these types of premises have obtained their titles, they are not encumbered with the attendant legal that has to be carried when no strata title is available.

What legal baggage? For one, without strata titles, owners won't be able to sell their properties with a straightforward Sale and Purchase Agreement - any transaction and transfer has to be done by way of an "assignment".

When unit owners don't have their titles, it also means that somebody else - usually the developer or building owner -  is holding the master title, making this third party an important part of any sale or transfer. So important, in fact, that its consent is required before an adjudication process can commence. And if this third party is the project's developer, a unit's vendor would need to pay its fees for aspects such as consent and administration before deals can be acknowledged.

The second consideration has to be do with security. There is nothing more reassuring than having physical custody of a title, especially with all the news reports today highlighting the fraudulent transfer of certain properties without their owner's knowledge.

Then there's the issue of maintenance. We at the HBA have received several complaints regarding the unsatisfactory standard of upkeep for the common areas in many stratified buildings.

The Strata Title Act has vested this responsibility upon the developer which built the project. Only upon the issuance of the strata title can the owners form their own management corporations and run their own shows. Until then, the sole right to charge a fee for the provision of the necessary maintenance is given to the developer.

Most of the grouses lodged with the HBA are because of this issue. Owners say they don't pay their maintenance fee because of the unsatisfactory level of upkeep given, as well as the lack of transparency in revealing the actual expenses incurred.

Developers (through management companies they would have invariably set up) on the other hand, argue that they are unable to give satisfactory maintenance because the owners haven't paid their dues.

It isn't difficult to see that the issuance of strata titles would end such disputes and put owners in the position of managing their own maintenance without the mud-slinging.

So much for the importance of strata titles. On its governance, we have the Strata Title Act to turn to, which prescribes severe penalties for those who don't take the prerequisite steps leading to issuance of the titles.

However, in countless cases, those responsible for enforcing the law and meting out the discipline are not doing their job, thereby letting down the public at large.

We will justify this statement. According to the Act, a technically-erred submission for strata titles is deemed to be no submission at all, and is subject to the same penalties. Yet, why is there a dearth of reported cases to highlight the outfits which have been disciplined? It certainly isn't because they don't exist, as the scarcity of issued strata titles throughout the country will reveal.

We feel it is because the Act lacks enforcement. And without enforcement, offending culprits will think their failure to apply and obtain the necessary titles won't result in any prosecution much less punishment. It therefore isn't surprising why many companies continue to flout the law, causing property owners to live in frustration.

Realising the issue, our lawmakers have created a body called the Strata Title Board to specifically attend to problems. But until today, how many people know how this Board operates, or how aggrieved owners can use it to seek remedy for their grievances? Not many, we suspect.

This has to change; effort must be more than just lip service and bits of legislation. Otherwise, we foresee the issues plaguing stratified developments to cases aspersions, and it might not necessarily be just on errant builders.