Management of a strata titled
development (Part 2)
23/02/2007 The Sun - Law & Realty By Nicholas Chang Chen Seng
IN Part 1 of this article, which appeared last week, the various duties of a
management corporation of a strata development were briefly examined and
explained. In Part 2, the writer will attempt to explain the various powers
of the management corporation.
Each proprietor is liable to pay the amount lawfully incurred by the
management corporation in the course of the exercise of its powers,
functions or in the course of carrying out its duties or obligations, in
such proportion as the share units of his parcel bear to the aggregate share
units. The contribution levied on the proprietors by the management
corporation is commonly referred to as the maintenance charges.
If any proprietor fails to discharge his liability to pay the maintenance
charges, the management corporation is empowered to initiate a legal suit
against the defaulting proprietor to claim for such outstanding as a debt
due to it. To recover such sum due to it, the management corporation is
further empowered to apply to the Land Administrator to issue a warrant of
attachment authorising the attachment of any moveable property belonging to
the defaulting proprietor which may be found in the building or elsewhere in
the State.
It is also important to note that any proprietor who fails to pay the
contribution lawfully demanded by the management corporation shall be guilty
of an offence and be liable on conviction to a fine not exceeding RM5,000
and to a further fine not exceeding RM50 for every day during which the
contribution remains unpaid after conviction.
The mutual duties, responsibilities and functions of the management
corporation and the proprietor, and in certain instances, vis-à-vis other
proprietors, are found in the Third Schedule of the Strata Titles Act 1985
(the Act). For example, a proprietor is restricted from using the common
property in such a manner that may unreasonably interfere with the use and
enjoyment of the common property by other proprietors or their families or
visitors. An illustration of such an instance would be, a proprietor
conducting swimming lessons in the swimming pool, thus preventing free and
unlimited access to the pool by other proprietors during the time such
lessons are conducted.
Any amendment of the By-Laws by the management corporation must be effected
by a special resolution and such amendment must be consistent with the
provisions in the Act. Non-compliance with such a requirement will render
any such addition or amendment of the By-Laws invalid.
A special resolution means a resolution which is passed at a duly convened
general meeting of the management corporation of which at least 14 days’
notice specifying the proposed resolution has been given by proprietors, who
together are entitled to not less than one-quarter of the aggregate share
units, and who together constitute not less than one-quarter of the
membership of the management corporation. The passing of a special
resolution by a management corporation is therefore no easy feat.
A purchaser of a parcel for which strata title has been issued must obtain a
certificate from the management company, certifying amount of contribution
of the seller, time and manner of payment, extent to which the contribution
has been paid, the amount then recoverable by the management corporation,
the sum standing to the credit of the management fund and the amount
reserved for expenses already incurred, and the estimated amount of any
expenditure likely to be incurred. Such a certificate can be obtained from
the management corporation either by the parcel proprietor, or a prospective
purchaser or a prospective lender. If the amount certified as due to the
management corporation is not paid by the seller, the purchaser who
subsequently becomes a parcel proprietor will be liable for the amount due
to the management corporation.
If the management corporation fails to function satisfactorily, a proprietor
or any other person having a registered interest in a parcel may make a
complain to the Director of Lands and Mines for the State, and the Director
may, if he is satisfied that it is in the interest of the parcel
proprietors, to appoint a managing agent to exercise the powers and
discharge the duties and functions of the management corporation. Depending
on the nature of scope of appointment made by the Director, the managing
agent may be appointed to exercise all the powers, duties and functions of
the management corporation or any one or more of those powers, duties or
functions.
In conclusion, it is pertinent to note that there will be significant
changes to the duties and powers of the management corporation when the
Strata Titles (Amendment) Act, 2006 comes into force. First and foremost,
the authority of the Director to regulate management corporations will be
transferred to a Commissioner of Buildings. Other changes include the right
given to a proprietor who is not satisfied with the amount of contribution
determined by the management corporation to apply for a review, and that the
management fund account must be audited by a registered auditor and
presented to the Commissioner. The full effect of the amendments will
require a separate and an exclusive examination.
Parcel proprietors will also benefit substantially when the Building and
Common Property (Maintenance and Management) Act 2006 comes into force.
Proprietors will be able take an active part in the management of the strata
development prior to the formation of the management corporation by the
setting up of the Joint Management Body. It is contemplated that this will
constitute an efficient platform to address the continuing and growing
grouses by parcel proprietors relating to the management by the developer
before the formation of the management corporation. The full effect of these
significant changes made in the management of a strata titled development
before the formation of a management corporation will, again, require a
separate and exclusive examination.
The writer is a member of the Solicitors’ Remuneration Enforcement
Committee, Bar Council Malaysia www.malaysianbar.org.my
