Condo owners versus management firms

08/01/2007 The Star By K.W. MAK

Condominiums are a statement of luxury, but behind the facade, residents complain of the lack of services from their management companies (MCs) while MCs complain that the residents who refuse to pay management fees are the ones preventing such services from being provided.

This “chicken and egg” scenario is causing a lot of dissent among condominium property owners, so much so that a group of such affected owners decided to form the Condominium, Apartment and High-rise Committee (CAHC) to champion the rights of condominium owners.

There are no quick fixes to the problems, however, as residents who got together to fight their issues discover numerous hurdles and obstacles before them.

“There is a lack of transparency in the way things are done presently and residents are tired of being taken for a ride,” said CAHC pro tem chairman Tengku Nazaruddin Zainuddin.

Arguments between residents and MCs are often the result of money matters. Residents are already paying a premium on their service charges and when such services are not up to expectations, complaints would ensue.

Most MCs do not make the matter any easier to resolve because they do not allow the management accounts and the sinking fund accounts to be viewed, citing excuses that the accounts could not be shown.

“Don’t let them cheat you. Withholding such accounts from residents is a violation of the Housing and Development (Control and Licensing) Act 1966 that many MCs and condominium owners themselves are not aware of,” said CAHC pro tem assistant chairman Khong Chee Seng.

Section 19 of the Act states that the developer shall provide the purchaser with a copy of the Annual Audited Accounts for the expenses incurred for the provision of the said services.

Section 20 (sub-clauses 3 and 4) meanwhile provides for the Sinking Fund accounts to be made available to the purchaser.

CAHC through the residents associations has used this Act to apply for the accounts from two MCs of condominiums located in Petaling Jaya and Klang. However, they have yet to provide a copy to owners.

Part of the reason MCs do not want to disclose their accounts is the fact that some of them charge management fees illegally.

Prior to the acquisition of the strata title, the developer is either supposed to manage the condominium or outsource the management to another person or corporation.

“Any person who undertakes property management practice is required by law to register with the Board of Valuers, Appraisers and Estate Agents,” said Board of Valuers, Appraisers and Estate Agents registrar R. Mahaletchumi in reply to a query on management fee charges.

“Nevertheless, if the condominium concerned has not been issued with strata titles, then the developer may manage the condo himself, provided he does not charge property management fees.”

The right to charge such fees lies with those registered with the Board, as stated in Section 21 of the Valuers, Appraisers and Estate Agents Act 1981.

Developers who outsource the management to a third party must ensure that the person or company is registered with the Board.