Standard procedures for management bodies of stratified properties (Part 1)

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Contributed by property valuer Mary Lau

Owners have come forward with problems at their properties – and the common themes centre on non-adherence to procedures by management, a lack of enforcement, and confusion on regulatory matters

Slogans have a weird way of getting mocked and our national catchphrase “Malaysia Boleh” (or “Malaysia Can”) has not been spared. Over the years, what was meant to inspire citizens to achieve greater heights has evolved to reflect the ineffectual ways of getting things done in certain sectors. As some say, “In Bolehland, anything goes”. The sentiment projected is one of indifference: "anything is allowed" is apparently now our unofficial national slogan – and that sentiment is sometimes expressed in the way strata properties are managed. In time, I hope proper procedures will be observed not only by the management bodies of stratified properties but by owners as well.

Photo by Mark Duffel on Unsplash.

Photo by Mark Duffel on Unsplash.

The Act that puts them in place is the Strata Management Act 2013 (SMA) which governs stratified living in Peninsular Malaysia and Federal Territory of Labuan. Property managers (PM), joint management bodies (JMB), and management committees (MC) need to follow what is prescribed for uniformity.

Property management companies that are still practising their own procedures, which are not in accordance with the Act, have to change. Though some are simple procedures, abiding by them would reduce conflicts between management and residents.


Motions

Photo by rawpixel.com from Pexels.

Photo by rawpixel.com from Pexels.

An urgent question from a reader, whose management gave him incorrect information on when owners can submit motions, reminded me of my own predicament. Last year, when we wanted to submit a motion before the AGM pack was issued at my condo, my manager was unsure of this situation as well. Since the Act does state this situation clearly, one can hardly impart blame.

The Second Schedule of the SMA, para 13 (1) provides that the deadline to submit a motion is not less than seven days before an AGM is held, but the act is silent on when motions can be submitted.

Under para 13(2), the management has to include the motion in the agenda of the AGM and post the motion on the notice board. One practice, following instructions from an authority, allows owners to submit motions anytime, even months before the AGM – and the management has to display it upon receipt. The outcome: we submitted early before the pack was issued and our motions were posted soon after.

The entire motion should be included in the pack that is handed out before the AGM begins, or on the day of the AGM itself for those who didn’t read them prior to the AGM. Please check with your management.

Our motions were not included in the AGM packs sent to owners. The AGM pack needs to be out either 14 days, for ordinary resolutions, or 21 days if there are special resolutions before the date of the AGM (Para 12, Second schedule, SMA. Section 2, SMA, see Special resolution).


Minutes of AGM

Photo by Headway on Unsplash.

Photo by Headway on Unsplash.

Within 28 days of a general meeting, the management committee shall extend copies of the minutes to all owners or display them on the notice board.

They also need to submit a copy of the minutes together with the audited accounts, auditor's report, and resolutions passed to the Commissioner of Building (COB) within this time frame. (Second Schedule, SMA, para 7(8) and (9)).


MC members to vacate after three consecutive terms

In practice, although not written in the SMA, the list of newly elected members ( as recorded in the AGM minutes) need to be submitted to the COB soon after the AGM. Upon receipt of this list, COB will issue a verification letter to the MC to confirm the appointment of the elected members. COB will check the list of elected members if they have been elected for more than three consecutive terms. If they have, COB will issue a letter asking them to step down. Additionally, if any member resigns immediately after the AGM, his name should not be included in the list.

The Second Schedule of the SMA, paragraphs (5) and (6), provides that key office bearers can hold office for only two consecutive years and all MC members can hold office for only three consecutive terms. After two years, a key office-bearer can be an ordinary committee member for another term only. After that, he needs to vacate for one term before he can serve again.

NOTE: A "term" is the period from one AGM to the next. It can be a maximum of 15 months. Proposals have been submitted for the amendment of SMA to replace the word ‘years’ with ‘terms’ so that there is no confusion that key office bearers can remain until the next AGM.

What if an MC member resigns, but not immediately, after he has been elected at the AGM? Depending on when he resigns, he is considered to have served for the whole term. For example, an MC member resigns sometime during the third consecutive term, after getting elected, and he is elected again at the coming AGM for the fourth time in a row. The COB would decide if he is deemed to have served the whole third consecutive term. If he is considered to have done so, he would need to step down. The COB would then advise when he can be elected again.

In the minutes of the MC meeting, his removal needs to be recorded and the minutes have to be posted within 21 days.


Accidents within the compound of the property

Photo by Artyom Kulakov from Pexels.

Photo by Artyom Kulakov from Pexels.

Diverting from the rudimentary provisions for MC, owners and residents ought to be aware of what to do if they get into an accident in the common areas of the property. Recently, I came to know of a traffic accident between a resident and a driver employed by another resident. The driver was on his motorcycle and he hit a resident’s car shortly after he entered the premises. The accident was caught on CCTV and showed that he was reckless.

If you are in a similar situation, ask your security supervisor or one of the personnel to accompany you and the other party to the police station if need be. If you suspect that the other party could be under the influence of drugs or alcohol, request for a drug test immediately. Besides informing your management, check the provisions of your house rules under the rules of conduct on this matter. If you need to, seek a legal opinion – as I understand that in some cases, the employer can be held liable.

On moral grounds, if there is no insurance, I would think that his employer should bear the responsibility. Had it not been for him, the driver would not be inside the premises to cause the accident. Unfortunately, in this case, the employer did not even speak to the affected resident. Should the management intervene?


There will be more on standard procedures in Part 2 of this article. In the meantime, read about Mary Lau's day at an AGM here.


About the contributor

Mary_Lau_picture

Mary Lau graduated from the University of Reading, England, with a BSc Land Management (Valuation Specialisation) in 1991. In 2002, she was appointed High Court Assessor in Sarawak for compulsory acquisition and compensation cases and sat on the bench with the judge. She began her training with CH Williams and later held senior positions in valuation firms such as Henry Butcher, City Valuers and was a Director at Hasmi and Associates in 1999. She began her own setups in real estate investment and other ventures by 2007. She is a licenced valuer with the Board of Valuers in Malaysia.


Disclaimer

This article is intended to convey general information only. It does not constitute advice for your specific needs. This article cannot disclose all of the risks and other factors necessary to evaluate a particular situation. Any interested party should study each situation carefully. You should seek and obtain independent professional advice for your specific needs and situation.


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