Why some people don’t comply
IT’S not just people earning low incomes who are defaulting on maintenance fees. Even those who can afford it are guilty.
Pet groomer Mary Poo, 29, is “absolutely miffed” at her neighbour who has never paid the RM80 monthly security fee for their housing area in Cheras, Kuala Lumpur. The neighbourhood’s residents agreed to hire security guards last year due to rampant crime. Before the guardhouses were set up, mat rempit would come in every weekend, Poo says, adding that a pregnant neighbour was robbed at knifepoint in front of her house.
Claiming that the defaulters are a well-off family, she is angry at the “cheapo freeloaders”.
“The residents’ committee can’t force the defaulters to pay. Those people want the security but they refuse to pay.”
A dentist who wants to be known only as Singam, 37, lives in Damansara Utama, Selangor. He’s finally settling his arrears after months of not paying for security in his housing area. He was annoyed at having to pay at first because the initial security plan forced him to “go through a maze” to get home. The committee has since taken heed of his grouses.
“They wanted me to pay RM600 a year for a security plan that would inconvenience me. I have a dog. I don’t need the added security but I’ll be a team player. I don’t want to be that one problematic resident,” he shrugs.
Richard Chan, a Building Managers Association of Malaysia (BMAM) committee member, clarifies: Unless it’s a gated community, the residents’ association cannot compel you to pay for security measures implemented by the residents themselves, nor are they allowed to fix boom gates to block road access to the area.
Richard Chan, Building Managers Association of Malaysia committee member and Malaysian Association for Shopping and High-Rise Complex Management past president
A public relations executive who declined to be named admits to not having paid her RM77 maintenance fees since September last year. Her access card has been barred so she has to park outside. And when she asked the management body to repair a leak in her wall and ceiling, they said she’d have to settle the arrears first.
But the Penangite living in Sungai Ara, George Town, denies she’s a cheapskate.
“I owe RM462 in arrears but I’ll settle it as soon as I can. I feel bad because I always try to pay my bills on time but right now, this is beyond my budget. I could use my credit card but there will be extra charges.”
Another apartment dweller in Tanjung Bungah, Penang, pays almost RM1,000 in charges and sinking fund collections per year. The businessman recently stopped paying because he is unhappy with the condo’s management body.
“It’s not that I cannot afford it but why should I? The common area is dirty. The lifts are constantly out of order. I’ll only pay when things improve.”
In every society, there are bad paymasters, BMAM deputy president Tan Sri Teo Chiang Kok says matter-of-factly. If you own a stratified unit, you have to pay. You can’t argue that the place is not managed properly to escape paying. Serve on the management bodies to make sure your interest is protected and things are done properly, he advises. Or refer problems to the Commissioner of Buildings. There shouldn’t be any resistance to paying, he states, noting that more high-rise dwellers are coming to realise that a well-maintained property preserves value.
Agreeing, Chan – who is also Malaysian Association for Shopping and High-Rise Complex Management past president – warns that rising living costs could lead to more defaulters. When your neighbours don’t pay, and you decide not to also, it starts a vicious circle and maintenance goes downhill, he says.
“Location is important when it comes to property value but good management is even more crucial,” he points out.
The failure of some neighbours to fork out maintenance fees has undoubtedly irked residents who pay up regularly like Casey Wong, who lives in an apartment in Petaling Jaya, Selangor.
“Even though I pay my fees, the condition of my apartment’s facilities is unsatisfactory because the management is unable to collect fees from all residents,” laments the 31-year-old bank executive.
Citing the example of frequently faulty lifts in her building, Wong says some amenities currently cannot be fixed or upgraded due to insufficient funds collected.
“Sometimes, I feel that residents like me are being ‘punished’ even though we abide by the requirements. We have done our part by paying our fees but because of uncooperative residents, we have to bear with the problems,” she says.
Wong says many of her neighbours do not pay up and the management corporation decided to publish their names on the apartment’s notice board.
“Some even have outstanding amounts of up to five figures!” she remarks, adding that other owners are also upset with the management body for not maintaining the building properly.
However, there are some who are fortunate to have cooperative neighbours.
Teh Eng Hock, who is the secretary of the management body in a condominium in Petaling Jaya, says only a handful of unit owners have outstanding sums and have not paid over the years.
“We are fortunate to regularly collect in excess of 90% payment from residents,” he says.
Teh, 34, says any default in payment affects the joint management body’s (JMB) budget and ability to improve the condominium.
“The JMB has to manage our expenditure very carefully as the surplus we register is marginal. The introduction of the Goods and Services Tax has also impacted the JMB’s operational expenditure,” he adds.
Royal Institution of Surveyors Malaysia fellow Ishak Ismail estimates that there are some 15,000 strata schemes amounting to 1.5 million parcels in Malaysia. And a new scheme is born every day.
If the collection is poor, the management bodies will have problems paying the utilities and maintenance bills, he says. Poor maintenance affects rental and sale demand.
Eventually, property value will depreciate, he says, adding that tenants and buyers are reluctant to stay in a poorly maintained area due to safety issues.
“When someone buys property, it’s not just about location and accessibility. Building condition, safety, health, a clean environment and sufficient parking are also important.”
Wong Kok Soo thinks it’s in the best interest of defaulters to pay up. Wong is an adviser to the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia and consultant to the National House Buyers Association.
He says: “If your unit is on the 20th floor, how can you get a good price when the lifts aren’t functioning well and keep breaking down.”
Although the management and maintenance cost of common properties went up by 4% to 6% due to the Goods and Services Tax (GST), Wong says it doesn’t have much impact on defaulters. Problematic collections are mostly in low, low-to-medium and medium-cost stratified buildings, he observes.
While defaulters aren’t a big problem in high-end properties yet, he cautions that they could become an issue as more foreigners buy such properties for investment. Tracing foreign defaulters around the world to take debt recovery action against them would be an uphill task.
BMAM’s Teo adds that there are lots of high-end condos being sold to “flippers” – people who speculate in property. When these property speculators cannot service their bank loans because there are no buyers, paying maintenance is the last thing on their minds, he says.
He says the GST, however, hasn’t resulted in a rise in charges simply because “it’s not easy asking for more money from residents because any hikes must be justified at the AGM”.