Time to be savvy about stratified properties

It’s risky for property owners not to know how strata management can impact them

By Joseph Wong josephwong@thestar.com.my

“I think it does create more opportunities for registered property managers and other service providers,” said Lai.

“I think it does create more opportunities for registered property managers and other service providers,” said Chee Hoe & Associates founding partner Lai Chee Hoe.

With more and more residential properties becoming stratified, it has become extra imperative for property owners to know and understand what their rights are where stratified living is concerned.

The number of stratified projects will not just continue to grow but will be the next way of life for many property owners especially with so many mixed-used developments in the works. 

Malaysians in general are used to non-stratified homes as this was the order of the day but times are changing. 

Many property owners are still unaware that strata living differs much from non-strata properties, said Lai, a CLP book-prize winner.

The main difference is that strata living empowers the owners to essentially self-regulate the common properties of a development area, he said.

“Non-stratified lack empowering provisions to do so, for instance, determine how much to charge [for maintenance], having control to [the security aspects like] CCTV or use of common property, change of façade and so on,” he said.

The Strata Management Act 2013 (SMA 2013), under Act 663, provides statutory duties to the joint management body (JMB) or management corporation (MC) and grants them powers. 

The JMBs and MCs are formed to take over management and maintenance of the sub-divided building and common property in strata developments such as condominiums, apartments or gated and guarded strata landed property. 

Simply put, a JMB is formed if the MC is not formed yet. After that, the MC is formed only after the developer of the land on which the strata development stands, successfully applies for subdivision of the building and the land office issues the strata titles for the respective parcels in the building.

“Duties [of the JMB or MC] are made known clearly and powers are given, for instance to issue invoice and charge both maintenance charges and sinking funds,” said Lai who specialises in both civil and corporate litigation. 

Lai, who also provides corporate advisory works and advises corporates on pre-emptive actions, pointed out that there are many ways that buyers and owners will be affected by the SMA 2013.

The more owners are aware of their strata management rights, the better off they are as they will not be taken advantage of by unscrupulous developers, he said.

There is also legal implications to the JMB or MC that many are unaware of, he informed.

That is why owners, members of JMBs or MCs, managing agents and developers should familiarise themselves with the legislation, he said.

Lai will be giving a one-day intensive seminar primarily covering the must-know topics within strata management.

It covers duties and responsibilities to more complicated subjects like use of funds, whether can we transfer moneys from maintenance account to sinking fund account, raise one off charges, apply different rates of charges, and paving the way to create a subsidiary management corporation for AirBnB issues.

The seminar will be held on Sept 5 at Hotel Istana, Kuala Lumpur.

Lai, one of the sought after speakers providing trainings and talks, said there are many positive aspects of the SMA 2013 like the creation of job opportunities for professionals.

“I think it does create more opportnities for registered property managers and other service providers,” he said.

However, this is not to say that there are no issues, he said.

Among the negativity is that the SMA 2013 has been criticised forlacking bite. 

“I think it has a mixture of both. The lack of enforcement is an issue and also lack of awareness to the existing legislations (and existing responsibilities and duties),” he said.

“The SMA 2013 does address many issues that were never addressed before but this is an evolving legislation,” he said.

To date, there has been two updates with more in the making to strengthen and tie up the loose ends. “We have seen two updates so far. The Ministry od Housing and Local Government (KPKT) has called for various meetings with the stakeholders to amend SMA. 

“The exact amendments cannot be disclosed at this moment. But there are several areas which require updating: 1 voting rights (for multiple parcels) 2. Adopting multiple rates (at the time of developers management period, JMB),” he said.

For those attending the seminar, Lai hope that they will be able to understand what can be done and what cannot be done within the existing statutory regime. 

“So we will discuss issues like what is the voting right for a multiple parcel owner, can he or she still vote if there are arrears in one of the many parcels. Can he seek election? 

“What about corporate parcel owner, can they continue to take office after the expiry of three years by switching the corporate representative person. Can a JMC stop or regulate AirBnB activities? Can a JMB or MC apply different rates to parcels of different use. 

“Can the developer charge a discounted rate to its own parcel which are not currently being used and many more?” says Lai.

These are some of the issues that will be covered, he said.

Want to get savvy about strata properties? Take part in an intensive one-day seminar on the subject of strata management here.