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Strata Management Act, 2013: An Introduction

Posted By: The National House Buyers Association (HBA)


The National House Buyers Association examines the Strata Management Act, 2013 which is due to be implemented by April or May this year.
The National House Buyers Association (HBA) applauds the positive response from YB Dato Wira Chor Chee Heung, the immediate past Minister of Housing and Local Government, in addressing the cumulative problems related to the proper maintenance and management of buildings and common property as well as ensuring the uniformity of laws and policies with respect to the local government in this area.
The Strata Management Act, 2013 (Act 757) (SMA) is an excellent legislation which is comprehensive and forward-looking. It explicitly states the respective roles of developers, joint management bodies (JMBs) and management corporations (MCs) as well as the obligations of parcel owners.
It is a holistic Act that relates to the maintenance and management (M&M) of strata developments as compared to the previous Act in the Building and Common Property (Maintenance and Management) Act 2007 (Act 663) which has outlived its effectiveness.
There were previous allegations of Act 663’s ineffectiveness as the issue in relation to M&M was split between two Ministries – the Ministry of Housing and Local Government and the Ministry of Natural Resources and Environment. There were visible boundaries that divided the effectiveness of the laws governing M&M.
HBA is pleased that the Ministry of Urban Wellbeing, Housing and Local Government has assumed the task of being the caretaker of M&M but is dismayed that the word ‘registered property manager’ was removed from the then proposed legislation at the second reading of the Strata Management Bill in the Dewan Rakyat which invariably opened the floodgates to unregistered property managers.
Credit to the Ministers
HBA would like to first thank YB Tan Sri Ong Ka Ting, the then Minister of Housing and Local Government for having the courage to first table Act 663 which gave “power back to the owners” in 2007. The previous Act instilled in developers the mind-set of recognising the rights, benefits and entitlement of the owners upon delivery of vacant possession. The developers’ duty is to sell property whilst owners’ is to form a community.
The said Act has worked “with some teething problems” for the past six years. There were many uncertainties and ambiguities that Act 663 could not resolve and thus it has since outlived its usefulness. The intention is for this Act to be repealed upon the implementation of the new Strata Management Bill.
YB Dato Wira Chor Chee Heung is responsible for tabling the current wholesome legislation that is the SMA in Parliament in 2012. The HBA would like to congratulate him and his team at the Ministry of Housing and Local Government for working with the numerous stakeholders in the related industry to tweak and tune both the M&M aspects in the Strata Titles Act, 1985 (Act 118) and the Building and Common Property (Maintenance and Management) Act 2007 (Act 633) to create the SMA. Equally important is his counterpart, the immediate past Minister of Natural Resources and Environment YB Dato Sri Douglas Uggah Embas who simultaneously tabled his law the Strata Titles Act,1985 (Amendment 2012) at the Parliament sitting to make the SMA a reality.
The SMA, which was passed in Parliament on 19th December 2012, received the Royal Assent on 5th February 2013 and gazetted on 8th February 2013 as an Act, heralds the creation and clearly defines the scope and jurisdiction of the Strata Management Tribunal. The HBA vehemently hopes the Minister will expeditiously invoke his power to issue Regulations under Section 124 (Regulations in respect to the Tribunal) and Section 150 (Regulations for the proper standard of M&M, payment of deposits, offences and penalties, power to compound and general effective performance) of the SMA to make the law work effectively and efficiently and along the motto “Efficient, Cheap and Speedy Justice”.
It now rests upon the shoulders of the current Minister of Urban Wellbeing, Housing and Local Government YB Dato Abdul Rahman Dahlan to announce the implementation of the SMA laws. There have been an inordinate number of delays in its implementation for several reasons, one of which is the finalization of the governing regulations.
Condominium owners and perhaps even potential buyers of strata title properties wait with bated breath for the implementation of the SMA, but given how past Acts related to this issue have turned out, owners and potential buyers will not be able to let out a collective sigh of relief just yet. Until the SMA is implemented, condominium owners and property managers will have to deal with the problems of managing the building the best they can.
Though the efforts to draft and table the Bill in Parliament is to be lauded, any delay only serves to emphasise the increasingly pressing need for it due to a higher occupancy of stratified units especially in land-scarce urban centres. Coupled with a greater awareness of the need for such properties to be well-managed, delays will also accentuate the inadequacies of other existing legislations regarding homeownership and property management.
A Three-fold Legal Relationship
Any person who purchases a unit in a strata development enters into a three-fold legal relationship. Firstly, he is the individual owner of his unit; secondly, he is a co-owner with all other owners of the common property and the land of the strata development; thirdly, he is automatically a member of the owners’ body to whom the management and maintenance of the scheme is entrusted. Harmony can only be achieved if the strata development is managed properly and the common property and facilities maintained adequately and regularly.
The proper maintenance, efficient management and success of the strata development will depend on a steady flow of payments to the coffers of the common fund of the owners’ body. Repeated failure to contribute to common expenses may hinder timely maintenance and efficient management and ultimately wreck the whole strata development scheme. Every strata property purchaser or owner should read and equip themselves with the newly minted SMA in order to understand his or her duties in all three roles.
We have repeatedly stated that laws are only as effective as their degree of enforcement. This has been the primary bane of the whole situation. Errant developers, JMBs, MCs and managing agents know all too well that the chances of them getting away with their malicious deeds are extremely high. Thus, enforcement is the key to more protection.
HBA’s fundamental belief is that even the best legislation for countering a particular situation is no better than an ornamental piece unless strict enforcement is carried out against offenders without fear or favour, be they big or small developers, a member of a defiant joint management committee (JMC), management committees (MComs) or even rogue managing agents who fail to protect the interest of the body or corporation they represent and/or exercise due fiduciary duty of care.
These comments are supplementary to HBA’s overall stand that no amount of legislative work will be able to eliminate or solve the problems at hand unless they are strictly enforced. As the saying goes, “The law is only as good as its enforcement”.