Are Ipohlites ready for Strata Living? – Mr Yee Seu Kai & Tham Kuen Wei

Growth of Strata Properties in Ipoh City

Land is known to be scarce and limited. With its limited supply and increase in demand over time, Ipoh is not exempted from the effects of urbanization and city growth. As land costs increases periodically overtime, Ipoh witnessed a growth of strata residential properties which had been growing like mushrooms throughout the city. We can see there are both premium and luxurious condominiums being developed in Ipoh city center, and then the Walk Up apartments in Menglembu, Bercham and Tambun followed by another generation of strata properties at Taman Botani, Pengkalan, Pasir Puteh and government backed PRIMA apartments.

As the growing number of strata properties can be observed in Ipoh, there is a dire need of qualified property managers and legal professionals to undertake the maintenance and management of these properties. Buildings not maintained will cease to fulfill their intended functions. Wear and tear set in immediately after buildings are constructed. Individual components eventually fail, in turn causing damage to other components. Failing components have to be repaired or a building’s ability to protect against foul weather, to keep safe equipment and furniture, etc. will eventually be lost. Regular maintenance, attending to defects while they are still minor, is the most cost-effective strategy for providing well-functioning buildings and will reduce operating costs.

It should be noted that buildings not maintained have a limited life span. Maintenance can prolong their useful life almost indefinitely. Replacement will be required less often, resources will be conserved and the environment protected. Still, buildings might need to be replaced for reasons such as obsoleteness, changes in space requirements, etc. A poorly maintained building is a poor living environment that reduces the quality of life for strata dwellers in Malaysia. More importantly, it boosts the building’s public image and conserves its value; which will fetch a higher re-sale value!

Difficulty in Collecting Service & Management Fees

One of the common problem that Management Committee of Apartments or Condominiums face is that there are always some people who stay in these strata units failed or are reluctant to pay service & management fees, thus making it difficult for Management Committee (who are elected from unit owners by the unit owners – consist of not less than 3 and not more than 14 natural persons) to properly manage the maintenance of the residential building along with the common area under the Master Title.

A host of problems will arise due to the constraint cause by lack of financial resources which will abruptly disrupts the proper management and maintenance of the residential building in concern. Aside to the facilities being poorly managed, the residents also risk being susceptible to diseases caused by Dengue Mosquitos and pests such as rats and bugs.

Previously under the The Building and Common Property Maintenance and Management Act 2007, there is limited enforcement power given to Management Committee (MC) to take against the dwellers of the same building. However, the New Strata Management Act 2013 (Act 757) and Regulation made thereunder; is enacted with the sole interest and main objective to protect parcel owners on the proper maintenance and management of the building and common property free from unscrupulous developers and illegal property managers. Currently, the Board of Valuers is the only regulatory body that governs the practice of Property Management with a code of standards that are being followed by licensed property managers. Due to the liberalization of the property management practice in Malaysia, the Board had allowed members from other profession with experience in property management to apply to the Board for a license in order to govern the property management practice in Malaysia to higher standards.

Recovery of Sums by Attachment of Movable Property

New Strata Management Act 2013 (Act 757) and Regulations made thereunder; power for enforcement of non payment of arrears of Service & Management Charges given to COMMISSIONER OF BULIDNGS (the head of Municipal Councils).

The State Authority may, in respect of a local authority area or any other area, appoint an officer to be known as the Commissioner of Buildings (“COB”) and such officers as may be necessary for the purposes of administering and carrying out the provisions of this Act. The Commissioner, subject to any general or special direction of the State Authority, shall have charge of the administration and shall perform such other duties as are imposed and may exercise such powers as are conferred upon him by the Strata Titles Act 1985. If any sum remains due after expiry of statutory notice, Developer or any member of committee of Joint Management Body (JMB) or MC or Sub-MC may apply for warrant of attachment. The Warrant is to attach any movable property of defaulter found in the building or elsewhere in the State. Warrant is to be executed by developer or member of committee or person specially employed, in the presence of COB or officer. After attachment, make inventor and serve Form B (as provided in the Regulations) on person in possession of Property. COB may request assistance of police officer. During attachment, may, in daytime effect forcible entry.

The Tenant or occupier may pay sum due to avoid attachment (NOTE: the management and service charges are payable by the Landlord unless otherwise agreed to be paid by Tenant in the Tenancy Agreement). Tenant may deduct amount paid from rent due or to become due and may retain possession of property until amount reimbursed by Landlord. Any person whose property is attached may dispute attachment by applying to Magistrate for release of property. If arrears remain unpaid within 14 days from attachment, and no order from Magistrate, property attached shall be sold by auction.

Management Corporation and its Role

The Management Corporation (MC) is the medium in which the proprietors of strata parcels in a strata development eventually control the management of the strata scheme. MC is defined in the Strata Titles Act 1985 (STA) as “in relation to any subdivided building shown in an approved strata plan, means the management corporation established under section 39,64 or 64A. Pursuant to STA, the MC of a strata development would come into existence upon the opening of the strata register (issuance of strata titles). It consists of all the parcel proprietors including in the case of phased development, the proprietor of the provisional block or blocks.

The MC is a statutorily created body corporate having perpetual succession and a common seal. Being a body corporate the MC may sue or be sued and the MC will be known by the name appearing in the book of strata register of the strata development. The importance and relevance of the MC is that upon coming into existence, the MC would become the proprietor of the common property of the strata development and the custodian of the issue document of title of the lot. Among the duties of the MC are:-

a) to control, manage and administer the common property of the strata development for the benefit of all the proprietors.
b) To insure the subdivided building to the replacement value thereof against fire and such other risks
c) To comply with any notices or orders given by any competent authority requiring the abatement of any nuisance on the common property, or ordering repairs or other work to be done in respect of the common property or other improvement on the lot
d) To prepare and maintain a strata roll for the subdivided building; and
e) To pay the rent of the lot

Deed of Mutual Covenants

A Deed of Mutual Covenants (“DMC”) is an agreement under seal. It binds on all owners of a multi-unit or multi-storey building. It basically sets out rules to regulate the rights and liabilities of co-owners and establishes management machinery for the common property. The provisions of any written law, contracts and deeds relating to maintenance and management of buildings and the common property, in so far as they are contrary to the provisions of the Act, shall cease to have effect and the provisions of the Act shall have effect notwithstanding anything to the contrary contained in any agreement or contract entered into after the commencement of the Act. Further, no agreement or contract entered into after commencement shall operate to annul, vary or exclude any of the provisions of the Act. Hence, there is a need to look into the Deed of Mutual Covenants to ensure the MC could undertake its activities smoothly without any potential obstacles in the future. Among the crucial community rules includes the usage of common areas, letting out of such areas by the MC, guests and invitees access, issues concerning the usage of workers or maids of the occupants, rights to facilities, limitations of sound and noisy devices, restrictions of business use (for residential strata properties), parking facilities, security regulations & policies, renovation works, working hours, charges & deposits for appointment of consultants and professional works by the MC, usage of lifts (prohibition of other lift usage etc), limitations of offensive materials (smoke, burning etc), objectionable fittings (prohibition of painting, furnishes on the exterior without prior consent etc), and other additional rules.

There are many instances where a strata residence would face problems such as an increase in foreign workers stay (which its policies should had been covered under the community rules) that is in contrast with the community rules, usage of strata property as a hotel or homestay, misuse of management funds and disputes between residents and the MC.

Hence, it is utmost important to appoint a good Legal Professional and Property Management Team to ensure good and proper professional management practices are done for comfortable and high quality living.

About Mr. Yee Seu Kai
Ex-State Assemblyman of Perak, Pokok Assam-Taiping 2008-2013

Mr Yee Seu Kai holds a LLB (Hons) degree from the University of London (External) and Malaysia’s Certificate of Legal Practice (CLP). He was called to the Malaysian Bar on 10-10-1998 and is the Managing Partner of Messrs Yee Nantham Leong & Partners. He practises in the area of the Housing Law, Law of Contract vis-a-vis Commercial Contract. i.e., Sale of Shares, Shareholders’ Agreement, Joint-Venture Agreement, Outsourcing Agreements, Licensing Agreements, Marketing Assistance Agreement, Land Law with particular interest in Forced Sales and Removal of Private Caveat, Law of Bankruptcy, Banking Law, Industry Relation, Labour law and Debt Collection.

He has presented the following Papers Presentation:
• China-South East Asia Overland Route Economic Development Forum
Chong-Zuo, Guangxi, China 29-30 August 2004
• Globalisation & The Roles of Professionals When Malaysia Becomes A Maritime Hub, Perak Bar – 2007

He is the legal advisor to the following trade Associations and Guilds:
• Perak Gold Merchants Association
• Perak Incense & Prayer Items Association
• Persatuan Kebajikan San Teik, Pokok Assam, Taiping, Perak.
• Persatuan Kebudayaan Tarian Dan Nyanyian Cina, Menglembu, Perak.

Among others have specialty knowledge and close working relationship with government and non-government agencies in Guangdong province and refractory manufacturers in Shansi province in China. He is a Consultant with Zest Business Consultants based in Guangzhou that provides consultancy & advisory services to Malaysian businesses who is looking into entry to the China Market and Investors from China looking for investments opportunities in Malaysia. Besides, he keeps close contact with housing developers, rubber glove manufactures, oil palm by-products millers, Arowana fish breeders, agar wood and durian plantations in Malaysia. As State Assemblyman, he had developed good working relationship and contacts with Government Departments & Agencies of Perak State and Federal Government of Malaysia as well as private Chinese school board of directors, trade & commerce & Chinese clans associations in Perak.