By: Ryan Lee
To What Extent is Section 8 (5) AHS 1985 are enforced? And how are the rights of Strata Property Owners being protected before “Developers” goes bankrupt?
The strata scheme is a type of property development that divides buildings or lands into parcels, accessory parcels, and common property which has a management system on its own. The example of strata schemes are flats, apartments, condominiums, townhouses, and houses in gated & guarded community.
Individual titles or Strata titles are issued under section 16 of the Strata Titles Act 1985 for each unit (Parcel) of a multi-story building or parcel of land for a strata scheme. Strata title is registered in the name of the person who was the last registered proprietor of the said land lot/plot. Thereafter, strata titles will be transferred by way of registration of ownership on the deed to a beneficial owner or purchasers,
Strata title is the proof of exclusive ownership of a subdivided property that can be legally registered and transacted at the Land Office. For example, a strata title proprietor is able to transfers, mortgage, and inherit the ownership of the title in accordance with the law.
The Master Title is normally known as a land ownership document for a large area in a development scheme. This master title often registered under the name of the developer or a joint venture partner. The master title is a document of ownership that yet to be subdivided according to the Strata Title Act. A parcel or a property usually will be transacted in the form of a Deed of Assignment (DOA) to transfer the ownership during the Master title period. Transaction by way of Deed of Assignment (DOA) requires notice to and consent by the developer. Master title transactions can sometimes be complicated if the buyer or the developer does not have the original purchase record of the previous sales transaction or if the developer goes bankrupt. Ownership of the property in the form of a Deed of Assignment also can be challenged if there is a dispute on multiple claims on the property as the confirming party is the master title proprietor or the developer.
Whereas, Strata title is a document of subsidiary ownership of the master title which is registered and regulated by the Land Office. Owners of the Strata titles do not get confirmation from the developer for the purpose of transfer and the ownership is protected by the Strata Titles Act 1985 and the National Land Code. The transfer of ownership of strata title is done through Memorandum of Transfer or form 14A at the Land Office. This form 14A confirms all the law of transfer of title(s) from one person to the other.
What are the reasons a multi-story building has yet to receive strata ownership?
There are multiple issues contributing to the matter. Such as, failure of the developer to make a subdivision application for the issuance of a strata title or the subdivision application does not meet the approval requirements under Section 10 of the Strata Titles Act 1985, or the developer went bankrupt before the application or issuance of strata title. In some scenario the issues are will be a combination of the same.
According to the Strata Title Act failure to apply for strata title within the period specified in subsection 8 (5) of AHS 1985, by a proprietor (Landlord, including his representative, executor, trustee) is an offense and may, on conviction, be fined not less than ten thousand ringgit (RM10,000) but not more than one hundred thousand ringgit (RM100,000) or imprisoned for a term not exceeding 3 years or both and a further fine of not less than one hundred ringgit (RM100) but not more than one thousand ringgit (RM1,000) for each day the offense continues to be committed.
But there are some questions that are often asked by the public such as – to what extent is Section 8 (5) enforced? What is the action of the enforcement authorities against developers who fail to obtain a strata title, especially for cases for more than ten years? Are fines issued continuously every year or only occasionally at the discretion of the enforcement? Or are fines issued when there are new complaints? And if the developer goes bankrupt, what appropriate action should be taken by the authorities so that the interests of the parcel owner will be secured like any other creditors after the developer becomes bankrupt/insolvent?
This article is contributed by DKK Academy and all rights are reserved.