STRATA TITLES ACT 1985  (ACT 318)

PART IX
PROVISIONS FOR LOW-COST BUILDING

58.Classification of low-cost buildings.
59. Application for subdivision by proprietor of low-cost building.
60. Application for this Part upon opening of a book of the strata register.
61.Duties and powers of the original proprietor before the establishment of the management corporation.
61A.Restrictions imposed on original proprietor during period before management corporation comes into existence.
62.Applicability and modification of by-laws in Third Schedule during the period before the establishment of the management corporation.
63.Management fund established by original proprietor.
64.Establishment of management corporation.
64A.Application for establishment of management corporation.
65. Duty of original proprietor to convene first annual general meeting.
66. Management fund established by management corporation.
66A.Breaches of provisions of this Part.
67.Duties and powers of persons or body appointed by State Authority.

(1) The State Authority may, on an application by a proprietor of any alienated land or at any time on its own motion, having regard to the location, nature of construction and the cost of the building, classify it to be a low-cost building.

(2) Without prejudice to subsection (1), the State Authority may by rules made under section 81, classify any type of buildings to be a low-cost building.

(2A) No building erected in a provisional block shall be classified under subsection (1) or (2) to be a low-cost building.

(3) Upon classifying any building to be a low-cost building under subsections (1) or (2), the State Authority shall issue a certificate to the proprietor of the land.

Upon receipt of the certificate by the State Authority under section 58, the proprietor of the land may apply for the subdivision of the building under section 10.

Upon approval of the subdivision of the low-cost building and the opening of a book of the strata register in respect of the  subdivided building the provisions of this Part shall apply.

61. Duties and powers of the original proprietor before the establishment of the management corporation.

(1) During the period before the management corporation comes into existence, it shall be the duty of the original proprietor -

(a) to control, manage, administer, and keep the common property in good repair;

(b) to pay the rent of the lot;

(c) to insure the building to its replacement value against fire and to keep it so insured;

(d) to effect such other insurance policies of the buildings as may be required by law;

(e) subject to any order may by a court of competent jurisdiction, to apply insurance moneys received by it in respect of damage to the building in rebuilding and reinstating the building, so far as it may be lawful to do so and to pay the premiums on any policy of insurance effected by it; and

(f) to perform any other function as may be necessary for the discharge of its duties.

(2) The original proprietor may -

(a) purchase, hire or otherwise acquire movable property for use by proprietors in connection with their enjoyment of the common property; and

(b) do all things reasonably necessary for the discharge of its duties under this Part.

(3) The original proprietor shall be deemed for the purposes of effecting any insurance policies under paragraph (d) or (e) of subsection (1) to have an insurable interest in the building to its replacement value.

(4) A policy of insurance taken out by the original proprietor in respect of the building shall not be liable to be brought into contribution with any other policy of insurance except if it is another policy taken out in respect of the same building.

61A. Restriction imposed on original proprietor during period before management corporation comes into existence.

(1) Notwithstanding, any other provisions of this Act, the original proprietor shall not, during the period before the management corporation comes into existence -

(a) use the lot concerned or any part thereof as security for any loan of moneys; or

(b) enter into any maintenance or service contracts for any periods extending beyond the date when the management corporation comes into existence.

(2) If the original proprietor contravenes subsection (1), the original proprietor shall be liable for any loss suffered by the management corporation or any parcel proprietor as a result of the contravention and the management corporation or any parcel proprietor as may recover from the original proprietor, as damages for breach of statutory duty, any loss suffered by it or him in consequence of such contravention.

(3) Where any dealing in contravention of paragraph (a) of subsection (1) has been registered, such registration shall not pass any title or interest in the lot concerned or any part thereof, and the Registrar shall, upon discovery of the registration, cancel the registration, and no person or body affected by such cancellation shall be entitled to any compensation.

62. Applicability and modification of by-laws in Third Schedule during the period before the establishment of the management corporation.

(1) The by-laws set out in the Third Schedule shall during the period before the management corporation comes into existence, have effect in relation to every subdivided low-cost building and shall apply by substituting for the word "corporation" wherever it appears the words "original proprietor".

(2) The said by-laws shall bind the parcel proprietors and the original proprietor to the same extent as if they constitute properly executed agreements - 

(a) on the part of the original proprietor with each proprietor; and

(b) on the part of each proprietor with every other proprietor and the original proprietor,

to observe and perform all the provisions thereof.

(1) The original proprietor shall establish and maintain a management fund for the control, management and administration of the common property, payment of any rent, rates, premiums of insurance and the discharge of any other obligations.

(2) For the purposes of subsection (1) the original proprietor may -

(a) determine from time to time, the amounts to be raised;

(b) raise amounts so determined by levying contributions on the proprietors in proportion to the share units of their respective parcels; and

(c) by an action in any court of competent jurisdiction, recover from any parcel proprietor any sum of money expended for rents, rates, premiums, maintenance or repairs done.

(3) Subject to the provisions of subsection (5) -

(a) any contribution levied under the provisions of subsection (2) shall be due and payable if the original proprietor serves a written notice on the proprietor; and

(b) the contributions may be recovered from the parcel proprietors who may be sued either jointly or severally by the original proprietor in any court of competent jurisdiction.

(4) A certificate of the original proprietor shall be conclusive evidence of the amount that may be due to him under the provisions of paragraph (a) of subsection (3).

(5) The original proprietor shall on the application of any proprietor of a parcel or any person authorised in writing by the proprietor certify -

(a) the amount determined as the contribution of the proprietor;

(b) the manner in which their contribution is payable;

(c) the extent to which his contribution has been paid by the proprietor; and

(d) the amount of any rates paid by the original proprietor and not recovered by him,

and such a certificate shall be conclusive evidence of the matters certified therein.

(1) Upon completion of the transfer of strata title in respect of all the parcels by the original proprietor, or upon the making of an order under subsection (2) of section 64A by the Director, there shall come into existence a management corporation consisting of all the parcel proprietors and the provisions of subsections (2), (3), (4) and (5) of section 39 shall apply.

(2) Upon the coming into existence of the management corporation as provided in subsection (1), the Registrar shall -

(a) having regard to subsections (3) and (3A) of section 15, enter in the index in Form 2 the name of the management corporation and the address for service of documents thereon;

(b) make on the register and issue documents of title to the lot in question a memorial to the effect that the common property is vested in the management corporation; and

(c) return the issue document of title to the management corporation.

(3) No entry shall thereafter be made on either of the documents of title except one affecting the common property.

(1) The proprietors, other than the original proprietor, of parcels having share units totalling more than half of the total share units of all the parcels may apply to the Director for an order that a management corporation be established.

(1A) Where the original proprietor has transferred parcels having more than half of the total share units of all the parcels, he may also apply to the Director under subsection (1) for an order that a management corporation be established.

(2) Upon receiving the application, the Director -

(a) in the case of an application by proprietors other than the original proprietor, if satisfied that the original proprietor has failed to discharge his duties or exercise his powers under this Part satisfactorily; or

(b) in the case of an application by the original proprietor, if satisfied that good grounds exist in support thereof,

may order that a management corporation be established.

(3) The Director shall cause copies of the order to be furnished to any one of the applicants and the Registrar.

(4) Upon receiving a copy of the order, the Registrar shall -

(a) file the copy of the order;

(b) enter a memorial in the index in Form 2 that the management corporation is established pursuant to an order under this section; and

(c) take action as specified in paragraphs (a), (b) and (c) of subsection (2) of section 64.

(5) No entry shall thereafter be made on either of the documents of title except one affecting the common property.

(1) It shall be the duty of the original proprietor to convene the first annual general meeting of the management corporation within one month from the establishment of the management corporation.

(2) The original proprietor shall give a written notice of the first annual general meeting to all parcel proprietors constituting the management corporation not less than fourteen days before the meeting.

(3) If the original proprietor fails to comply with subsection (1), he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding one thousand ringgit.

(4) Without prejudice to the provisions of subsections (1) and (3), if the original proprietor fails to convene the first annual general meeting within the specified period, the Director may on application by the management corporation, a parcel proprietor or chargee of a parcel, appoint a person to convene the first annual general meeting within such time as may be specified by the Director.

(5) The agenda for the first annual general meeting shall include the following matters:

(a) to decide whether the management corporation shall manage the subdivided building in accordance with Part VII or apply to the State Authority under section 67 to appoint a person or body to be charged with the duties, powers and functions of the original proprietor as provided for under this Part.

(b) in the event the management corporation decides to operate under the provisions of Part VII, to decide -

(i) whether to confirm, vary or extend insurances affected by the original proprietor;

(ii) whether to confirm or vary any amounts determined as contributions to the management fund;

(iii) the number of members of the council, and to elect the council where there are more than three parcel proprietors; and

(iv) whether to amend, add or repeal the by-laws in force immediately before the holding of the meeting.

66. Management fund established by management corporation.

(1) The management corporation shall establish a management fund sufficient in the opinion of the management corporation to meet the administrative expenses as may be incurred for the purposes of controlling, managing and administering the common property, paying rent, rates and premiums of insurance and discharging any other obligation of the management corporation.

(2) Upon the establishment of the management fund under subsection (1), all moneys in the management fund established and operated by the original proprietor under section 63 shall be transferred to and form part of the management fund established under subsection (1).

(3) The provisions of subsections (2), (3), (4), (5) and (6) of section 45 shall apply.

(1) If the original proprietor or the management corporation commits a breach of any of the provisions of this Part or makes default in complying with any requirements of, or duties imposed on it by, any of the provisions of this Part, the original proprietor or, as the case may be, the management corporation and every member of its council, and any other parcel proprietor, who knowingly is a party to the breach or default shall be guilty of an offence and shall be liable, on conviction, to a penalty expressly prescribed for such breach or default, or if no penalty is so prescribed, to a fine not exceeding two thousand ringgit.

(1) The State Authority may, upon application by the management corporation, appoint a person or body to exercise the powers, duties and functions of the management corporation and the said person or body so appointed shall exercise the powers, duties and functions of the original proprietor provided for under this Part.

(2) For the purposes of subsection (1), the provisions of subsections (2) and (3) of section 50 shall apply.