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Strata Living
01/11/2003 Malaysian Business-Housing & Property By National House Buyers Association of Malaysia
Own a strata property?
Know your rights and responsibilities
Most people are not aware
that in buying a strata title property,
they become a member of a corporate body
called the management corporation. Under
the Strata Titles legislation, as a
member of this corporation, one will
involve assuming certain obligations,
duties, restrictions and liabilities as
well as various rights, entitlements and
privileges apart from the ownership of
their own parcel.
Pre-management
corporation
In Malaysia, strata
titles are not issued immediately upon
vacant possession. Pending the issuance,
it is the housing developer's duty to
manage and maintain the building and
common areas. The developer would have
signed a 'Deed of Mutual Covenant' with
the purchasers at the time of the sale
and purchase agreement signing. Once you
have signed this document, you have
agreed to comply with the developer's
by-laws (or house rules). If the rules
say you cannot fix any iron grilles on
your windows, you cannot do it, or you
would face substantial fines or
penalties. Forming the management corporation
When the Registrar of
Titles (Land Office) opens a book in
respect of the subdivision of building,
in the strata register, a newly created
legal entity comes into existence. This
corporate body is now known as 'XXX
(name of strata scheme) management
corporation'. The name is a little
misleading as it is actually an owners'
corporation and has nothing to do with
the management agents.
The original proprietor
From the time the strata
plan is registered, the original
proprietor, usually the developer, will
control the management corporation. The
principal duties imposed on the original
proprietor during the initial period
include the following:
- Exercise and
perform the powers, authorities,
duties and function of a council
until such positions are filled at
the council's first annual general
meeting election (AGM)
- Fulfill the duties
of the owners' corporation contained
in the Strata Title legislation,
subject to restrictions.
- Convene and hold
the first AGM of the management
corporation in the prescribed manner
within one month after the
expiration of the initial period.
Although it is not
provided for in the Strata Titles
legislation, it makes sense for the
original owners to provide certain plans
(building, engineering and drainage),
specifications (building contract and
land survey), diagrams (location of
pipes, wires, cables and ducts), list of
owners, accounting records and other
documents. We hope that the lawmakers
would include this requirement in the
next amendment to the legislation to
allow for smooth transition in the
control, management and administration
of the strata scheme from the original
proprietor to the parcel owners.
Time is given for the
transition of control from the
developer to the owners during the
'initial period'. This initial
period commences the day the
management corporation is formed and
ends the day when at least one-third
of the parcel owners (calculated as
one-third of the aggregate share
units) have registered their
individual strata titles.
By-laws
During the initial
period, the by-laws as legislated in
the Strata Titles Act,1985 (Third
Schedule) are enforced. This means
that the 'Deed of Mutual Covenants'
you have signed earlier is not
legally binding anymore. This
regulated by-laws cannot be amended
by the management corporation;
however, the management corporation
can make additional by-laws or
amendments to additional by-laws by
special resolution.
First AGM
The developer has to
give written notice of the first AGM
to all parcel owners not less than
14 days before the meeting and
prepare the agenda. The items of the
agenda, fixed by the Strata Titles
legislation, includes decisions to
be made on insurance, service-charge
contributions, sinking-fund
contributions, the number of council
members, election of council,
by-laws. After the first AGM, the
transition for control from
developer to owners takes place.
Who owns the
common property?
The management
corporation is now the owner of the
common property and the custodian of
the issue of document of title to
the lot (land). This is one issue
that most parcel owners have
forgotten. Although you have bought
an apartment unit, you can still be
part owner of the piece of land on
which the building stands, albeit
you cannot deal with it on a
personal basis.
The management
corporation being a corporate body
has perpetual succession and a
common seal, with an elected council
as compared to appointed board of
directors. For an insight of the law
on strata schemes you can buy copies
of the Strata Title Act, 1985, and
any amendments from the Government
Printers or check with the
information available on the
National House Buyers Association's
website. |
