Non-payment of maintenance and service fees a problem

The Star 18/04/2001

Non-payment of maintenance and service charges by owners and dwellers of strata properties has developed into one big headache for property developers.

Real Estate and Housing Developers Association (REHDA) president Datuk Eddy Chen Lok Loi said non-payment of maintenance and service charges had become so rampant that in many schemes, half of the parcel owners had defaulted or did not pay at all.

"As a result, there will not be enough funds to carry out the required day-to-day maintenance and management, let alone provide for sinking fund and refurbishment activities,'' Chen said at a strata properties seminar in Kuala Lumpur yesterday.

He said the non-payment of fees and charges would not only affect the quality of the services provided but in turn irritate owners who had been paying dutifully.

"In no time at all, developers will be left in the lurch as owners who previously paid their dues will abstain from paying the maintenance charges, blaming poor maintenance services.

"This problem is even worse in low-medium and low-cost schemes where parcel owners are really not in a position financially to fork out additional resources for maintenance charges,'' he added.

In 1993, the Housing Developers Association (HDA) conducted a survey of 30 developers with a total of 26,150 units of sub-divided dwellings on the status of arrears in maintenance fees which found that this totalled more than RM8.78mil.

"By end-2000, there was a stock of 588,785 units of strata properties. Assuming that the floor area for these units is 850 sq ft, maintenance fees chargeable at 20 sen per sq ft and 50% of the total unit owners have defaulted for six months, total maintenance fees in arrears could easily total to over RM300mil.