Strata Management Act an eye-opener
ALTHOUGH the Strata Management Act (SMA) received its royal assent on Feb 5, 2013 and was gazetted on Feb 8, 2013, it was inordinately delayed because of the governing Strata Management (Maintenance & Management) Regulations and a host of other crossed referred laws in the Housing Development (Control & Licensing) Act, 1966 (amended 2012), its HD Regulations (amended 2015) and the new statutory Sale & Purchase Agreements.
It finally was implemented by the Housing Minister and came into operation on June 1, 2015.
Maintenance and management – the new regime
As the country enters a new era of democracy, we are beginning to realise the importance of information so that we can be aware of our rights, obligations and responsibilities.
This is especially true for owners who are concerned about the management and maintenance of their stratified properties, now governed by the Strata Management Act, 2013 (Act 757) and its governing Strata Management (M&M) Regulations, 2015 which has resulted in the repeal of the Building & Common Property (M&M) Act 2007 (Act 663) that has outlived its effectiveness.
With the passage of this piece of legislation through Parliament in December 2012 and its introduction to the property landscape on June 1 this year, a framework for the establishment of a joint management body (JMB), management corporation (MC), subsidiary MC and the appointment, duties and power of a Commissioner of Buildings (COB) to administer the new legislation are now in existence, as are rules relating to the rights and obligations of owners.
It is also supposed to be enforced against offenders, be they big or small developers, a member(s) of a defiant JMB, MC or even rogue managing agents who fail to protect the interest of the body or corporation they represent and/or exercise the due fiduciary duty of care. The legislation also saw the introduction of the new tribunal in the form of the Strata Management Tribunal – a quasi form of legal redress; an efficient, cheap and speedy justice where an aggrieved party may seek legal recourse without having to litigate in court.
The Strata Management (M&M) Regulations, 2015 is detailed, comprehensive and is forward-looking with pre-set format from Form of Proxy, Notice of Resolution(s), Notice of Demand to detailed check-list what the developer must “hand-over” to the JMB, etc. There is a total of 30 pre-set forms. Even a pre-set “by-laws” governing stratified property is available as a skeletal guide. However, there is room for further improvements in the near future.
The SMA is a victory to the National House Buyers Association (HBA) and those who fought for the well being of stratified property owners in addressing the cumulative problems related to the proper maintenance and management of buildings and common properties. It also ensures uniformity of laws and policies when it concerns the local governments. This SMA legislation includes all stratified properties – residential and commercial.
There were previous allegations of its ineffectiveness because part of the issue that relates to maintenance and management (M&M) were under different ministries i.e. Housing and Local Government Ministry and the Natural Resources and Environment Ministry. There were visible boundaries that divided the effectiveness of the laws governing M&M.
Down memory lane – ministers credit
HBA would like to firstly thank Tan Sri Ong Ka Ting, the then housing and local government minister, for having the courage to first table Act 663 that gives “power back to the hands of the owners” in 2007. The previous Act instilled on the developers the mindset and recognised the rights, benefits and entitlement of the strata owners upon delivery of vacant possession. The developers’ duty is to sell property while that of the owners is in forming community. The said Act 663 has worked “with some teething problems” for the past eight years. There were a lot of uncertainties and ambiguities. But it has since outlived its usefulness.
When Tan Sri Chor Chee Heung helm the Housing Ministry portfolio, he boldly took a notch higher in the succeeding years to table the current wholesome legislation named the Strata Management Bill in Parliament on Dec 19. 2012. Congratulations, to the immediate past minister and his team at the Ministry of Housing and Local Government who have worked through weekends with the numerous stakeholders (including HBA’s volunteers) in the related industry: tweeted and tuned both the M&M aspects in the Strata Titles Act, 1985 (Act 318) and the related Housing Development legislation. Hence, the birth of the SMA.
Equally important is his counterpart Minister at the Ministry of Natural Resources and Environment, Datuk Seri Douglas Uggah Embas who also simultaneously tabled his law i.e. Strata Titles Act,1985 (amendment 2012) at the previous sitting in Parliament to make the SMA a reality.
Credit too must be accorded to the current Housing Minister, Datuk Abdul Rahman Dahlan, for implementing the SMA whereupon his ministry has assumed the task of being the caretaker of M&M. We were afraid that he may do a “U-turn” as what happened to our (HBA) long-drawn proposal in the mandatory implementation of the Built Then Sell 10:90 (BTS 10:90) concept in the housing industry.
(We are, however, dismayed that the word “registered property manager” was removed from the SMA legislation which invariably opens the floodgates to unregistered property managers. This is another topic that I have written on numerous occasions)
Three-fold legal relationship
A person who purchases a unit in a strata development enters into a three-fold legal relationship. First, he is the individual owner of his unit. Second, he is a co-owner with all other owners of the common property and the land of the strata development. Third, he is automatically a member of the owners’ body to whom the management and maintenance of the scheme is entrusted.
Harmony can only be achieved if the strata development is managed properly, the common property and facilities maintained adequately and regularly. The proper maintenance, efficient management and ultimately the success of the strata development depends on a steady flow of payments to the coffers of the common fund of the owners’ body.
Repeated failure to contribute to common expenses may hinder timely maintenance and efficient management and ultimately wreck the whole strata development scheme.
Firstly, every strata property purchaser or owner should read and be conversant with the newly minted SMA and its related regulations to understand his duties, obligations and responsibilities as an individual owner. Secondly, he should be aware that he is a co-owner of the common property of the strata development and thirdly that he is a member of the owners’ body formed.
We have repeatedly stated that laws are only as effective as the degree of enforcement. This had been the bane of the whole situation. Wayward developers, JMBs, MCs and managing agents know that the chances of them getting away with their wayward deeds are extremely good. Thus, enforcement is the key to more protection. Our fundamental belief is that even the best of legislation to counter a particular situation would remain ornamental pieces unless strict enforcements are carried out against offenders, without fear or favour.
Our comments aforesaid are supplementary to our stand that no amount of law will be able to eliminate or solve the problems unless they are strictly enforced. As the saying goes, “The law is only as good as its enforcement”.
Education, empowerment and enrichment process
In achieving HBA aspiration towards education process, I am pleased to inform that G Prop Marketing & Management Sdn Bhd in collaboration with the HBA is organising a two-day workshop on Strata Management Workshop & What’s New In the Housing Legislation on Sept 2-3, 2015 at Bukit Jalil Golf & Country Resort, Bukit Jalil, Kuala Lumpur. Details of the seminar could be uploaded at our website: www.hba.org.my
Chang Kim Loong is the honorary secretary-general of the National House Buyers Association (HBA): www.hba.org.my , a non-profit, non-governmental organisation manned purely by volunteers.