Condo Conundrums

Strata owners' rights and responsibilities pt2

HAVING run a series of articles on the plight of condo dwellers, we end our series with advice from Chris Tan of Chur Associates.

Strata owners should be aware of their rights and responsibilities now more than ever, Tan stresses.

"Developers will not be managing the strata property forever, hence, the owners will have to take full responsibility for the entire building eventually," he reasons.

Furthermore, with the new Strata Management Act 2013 (SMA 2013) redefining the basis of strata living and warranting self-management and self-sufficiency, Tan feels strata owners should be aware of their basic rights and obligations as owners of this property type.

10 basic rights of strata owners

1) Provide mandate direction to the management

A Joint Management Body (JMB) is tasked to manage and maintain the common property in strata developments from the time of delivery of vacant possession by the developer to the purchasers until the Management Corporation (MC) is formed.

The MC can only be established after strata titles have been issued and at least, a quarter of the aggregate share units have been transferred to the owners. This gap in time of forming the MC is also meant to be a grace period for the owners to learn the trade of managing their own property while holding the hand of the developer.

As a strata owner, you effectively own a part of the "company", hence, you have a say in its matters. Strata owners should attend their Annual General Meeting (AGM) as the condominium (strata property) is their investment, and they should play an active role in appointing the board of members and the representatives for condo owners.

As an owner, you will have access to the financial accounts and if you are unhappy over a matter, operating manner or other issues, you are able to do something about it collectively.

Another important reason to attend the AGM is the meeting will also see the tabling of the maintenance budget for the following year.

Owners will want to ensure that a good budget is planned – one which will generate sufficient income collection of service charge (SC) in order to accommodate the required maintenance works in the year.

2) Right to request for an Extraordinary General Meeting (EGM)

To provide timely intervention in any issues, the chairman of the committee council shall convene
an EGM within six weeks of receiving requisition in writing from strata owners who are together entitled to at least a quarter or 25% of the aggregate share units.

There have been instances where owners are disgruntled due to biases such as the awarding of maintenance work contracts to family members/friends of the management and the misuse of funds. If the management does not oblige or entertain the request for an EGM, owners can then seek help from the Commissioner of Building (COB) or the Strata Management Tribunal (SMT).

3) Right to request for inclusion in the agenda

Owners also have the right to voice their opinions and discuss any matter they find important, by requesting for an inclusion in the agenda of an EGM or AGM, provided they hand in a notice at the management body's registered office no less than seven days
before the meeting.

4) Right to vote during AGM and EGM

In order to exercise this right, owners will have to settle all their outstanding service charges prior to the AGM or EGM. Those who fail to do so will not be allowed to vote for any resolution. Each parcel of land (unit) will be entitled to one vote, on a show of hands, and on a poll, the number of votes shall correspond with the number of share units or provisional share units attached to the parcel or provisional block.

A co-strata owner may vote by means of a jointly appointed proxy or by appointing any one of them. For example, a proxy who is representing his wife who owns a unit will be able to cast a vote on her behalf.

One matter to take note, however, is the proxy is not allowed to be a committee member if he is not an owner.

5) Right to request for review of SC and SF

In the event owners are dissatisfied with the service charge or sinking fund (SF) being implemented by the management, where they do not agree to an increase in SC, they could apply for its review to the COB. The COB will then determine the right amount that should be charged or get a registered property manager to recommend an amount.

6) Statutory presumption

Should there be any inter-floor leakage like dampness, moisture or water permeation on the ceiling or any furnishing material attached to the ceiling, the owner of the upper floor shall be responsible in the absence of proof to the contrary. This means that the owner of the above unit will have to foot the bill for repair works.

7) Right to file a claim under the SMT

Every strata owner's rights are protected under the SMT, where any dispute related to strata management falls under the jurisdiction of the SMT.

Established under the Urban Wellbeing, Housing and Local Government Ministry, the SMT was formed to provide feasible solutions to disputes on the failure to perform a function, duty or power imposed by the SMA 2013.

With a pecuniary jurisdiction up to RM250,000, the SMT enables for the solving of disputes at minimum cost as no legal representation is allowed (thus eliminating high legal costs) and it has cheaper filing fees compared with a court proceeding.Strata owners will be glad to know that an award will be made without delay and where practical, within 60 days from the first day of a hearing.

Another plus point is there is no time frame in filing a dispute claim. Strata owners are eligible to claim for the recovery of charges or for any defect at any given time.

8) Right to file a claim against common property defect account

Common property has a defect liability period of 24 months for residential property, similar to the one for your strata unit. Strata owners have the alternative to claim for any defect in their common property such as leakage or faulty elevators within the defect period.

Before the handing over of units, developers will have to submit 0.5% of the estimated construction cost or RM50,000, whichever is higher, to the COB. This amount is to be deposited into a statutory account as a provision for any possible defect in the development. Should the sum be insufficient to cover any expense, the developer must remit the remaining amount.

9) Right to set up a Subsidiary Management Corporation (SMC)

The MC may establish SMCs to represent the interests of a particular group of parcel proprietors who are entitled to the exclusive benefit of a limited common property. These areas must be clearly defined and marked on a special plan, which must be submitted to the director of survey.

This is especially useful for mixed developments, where the owners of commercial units do not utilise certain common property. For instance, an office unit owner will not use the swimming pool facility.

Hence, it would be feasible to assign separate sub-management corporations which will be
in charge of the respective group, besides enabling the implementation of specific SC for residential, office and retail owners respectively. A sub-MC could also be created for the limited use of a common property. For instance, the allocation of a private rooftop garden for the use of penthouse owners only.

10) Right to dispute the legality of attachment of moveable property

The COB has the right to issue an attachment for strata owners who fail to pay their service charge on time.

A Warrant of Attachment (Form A in the third Schedule of the SMA 2013) will be issued, following which the COB will hire people to confiscate the defaulter's removable property (car, settee, television etc). If the attachment is done in error, however, owners can then apply to a magistrate's court for the release of their property within 14 days from the date of attachment.

With that, Tan concludes with this simple but "weighty" piece of advice for owners of strata property – Love thy neighbours!

"The community of strata residents must realise the importance of living in harmony and cooperation, besides taking charge to protect the very investment that they live in. After all, a "company" will function optimally only when all its owners participate," he says.

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