TO DO OR NOT TO DO STRATA MANAGEMENT ACT 2013 STRATA MANAGEMENT (MAINTENANCE & MANAGEMENT) REGULATIONS Issues and impacts of

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1 TO DO OR NOT TO DO LEE KIM NOOR, KNLEE & ASSOCIATES, PENANG Issues and impacts of STRATA MANAGEMENT ACT 2013 STRATA MANAGEMENT (MAINTENANCE & MANAGEMENT) REGULATIONS 2015

2 Strata Management Act 2013 Old Era Initial Interim Final VP 12 months 1 st AGM for MC SPA BCPA STA Developer JMB MC New Era SPA SMA Developer MC Commissioner of Buildings DISPUTES AND STRATA MANAGEMENT TRIBUNAL

3 Strata Management Act 2013 TO DO Section 6 -Schedule of parcels (before sale) File SiFus (sijil formula unit syer) ( including provisional block) with land office and COB for approval before launching - - Show proposed share units of each parcels, to file with Location plans, legend of all parcels, certificate by Surveyor that the building is capable of subdivided, certificate by architect/engineer that the building is to be constructed in accordance with approved plans and capable of being subdivided. Strata Titles Act NO DO NO DO Section 9 & 10 application for subdivision of buildings & in the case of phased development, provisional block, to discharge existing charge -NO DO NO DO

4 Strata (M & M) Regulations 2015 Section 7 -Amended Schedule of parcels In case of any phased development, before the developer sells any parcels in any provisional block, the developer file amended schedule of parcels, can only amend Schedule of Parcel if the building plans are altered or revised a. due to requirement of a local authority; or b. agreement of all purchasers of all affected provisional blocks. - Provided there is no change in the proposed quantum of provisional share units for the affected provisional block.

5 Strata Management Act 2013 TO DO HOW TO DO HOW TO DO - Section 8 Allocated share units ( after sale) for property management purposes i.e collection of service charges S21(2)(a) and voting purposes. If presently managing under a set of weightage and after introduction of SMA change weightage then the management has to call EGM to notify everybody Who to file Allocated share units? Section 9 of Strata (M&M) Regulations 2015 Any person or body who has a duty or is responsible to maintain or manage any building or land intended for subdivision into parcels and the common property

6 Strata Management Act 2013 NO DO NO DO Section 9 of Strata (M&M) Regulations 2015 Shall within 90 days from the date of commencement of SMA or within such extended time as the COB may grant,assign the share units for each parcel. COB appoint any other person or body to assign, if a. If fail to assign at the cost of the person who is supposed to assign or b. if the purchaser is not satisfied with the assignment of share units (i) variance less than 10% then purchaser to pay cost (ii) variance more than 10% then management pay NO MAIN NO MAIN

7 Strata Management Act 2013

8 Strata Management Act 2013 WEIGHTAGE old practise in Penang 1. Residential : Commercial : Industry : Covered car park : 20% 5. Uncovered car park :10% With the new weightage, Conflict of interest?? In future, Limited Common Property

9 Strata Management Act 2013 NOT TO DO 1. Do not buy an apartment next to office block under one management 2.Do not share an office block with an industrial block 3. Increase in Penang Car Park fees/decrease in KL parking fees?? 4. land parcel next to strata parcel, what is not applicable? No share unit?? what if share common facilities??

10 Strata Management Act 2013 TO DO, HOW TO DO Limited Common Property and Subsidiaries Management Formation under S17A Strata Titles Act Comprehensive resolution 2/3 aggregate share units of Proprietors; 2. Not available during JMB 3. designated limited common property design of building whether suitable

11 Strata Management Act 2013 Damage Policy for Insurance Part VIII rebuilding building, repair, restoration, removal of debris, remuneration of architect. Reinstatement value Subsidiary management- insured separately Each parcel owner shall be responsible to insure his building on the land parcel Public Liability/ Error and Ommission NO NO DO To do valuation every five years

12 Strata Management Act 2013 Strata Management Tribunal Single sitting out of 23 committees on panel Jurisdiction <RM250, Limitation Act 1953 not applicable Decision final, No appeal, refer to Judge of High Court ONLY on question of law Not comply fine RM250,000 or jail 3 years NO NO DO FULL Compliance in development and management otherwise see YOU in Tribunal

13 Strata Management Act 2013 THIS TO DO Recovery of Service Charges 1. Recovery vide Court S78(2) 2. Recovery by attachment of movable property (warrant issued by COB) S79 can be challenged in court 3. Recovery vide Tribunal S78(3) If fail to comply with payment notice, liable to a fine < RM5,000 or jail 3 years or both, if continuing office RM50/day, Limitation Act 1953, continuing entity

14 Strata Management Act COB HOW TO DO COB-legal officer, law enforcer, mediators at AGM, registrar, record keeper, defect investigator, debt collector and now part time surveyor, MACC officer S6&8 check Schedule of Parcel/Allocated Share Units S14(2) COB to send auditor to investigate Developer's account at its expense and under Part X, like MACC S79 To issue warrant of attachment S86 to appoint Managing Agent accept bond S92 To monitor deposit from developer to rectify defects on common property To regulate 30 forms under SM (M&M) Regulations

15 Strata Management Act 2013 By-laws Third Schedule Strata Management ( Maintenance and Management) Regulations Commercial Complex HOW TO DO JMB/MC may made additional by-laws by special resolution but cannot contravene the by-laws as prescribed under the Act S2 Special resolution : passed at AGM, at least 21 days notice and carried by a majority not less than three-quarters of the valid votes

16 Strata Management Act 2013 By-laws THIS TO DO Third Schedule Strata Management ( Maintenance and Management) Regulations Effective service charges collection S6 May display the list of defaulters' list on notice board PROVIDED update at the end of every following month. May deactivate electromagnetic access device May stop from using the common facilities including tenant Can clamp vehicle improperly parked, fine <RM250 S25 Shall not keep animal that may cause annoyance or nuisance or dangerous to the safety S14 May require any person to identify himself for security S17

17 Strata Management (M &M) Regulations 2015 THIS TO DO Provisions for Management Corporation (also for JMB) 1. Executive Committee Not more than 2 terms Management Committee (natural person) Not more than 3 terms 2. Now owner of more parcels can have more representatives 3. Now all meetings only one calling 4. Notice for AGM all 14 days with a standard form 5. to send out Notices by Registered Post accompanied by past year minute and audited account

18 Strata Management (M &M) Regulations 2015 THIS TO DO Provisions for Management Corporation (also for JMB) 6. On show of hand, One Parcel One vote On poll correspond with share units 7. 7 days before AGM, close account and put up the list of proprietors entitled to vote 8. a person may act as proxy for only one proprietor at any one general meeting. NO DO NO DO Wrong do, fine fine fine

19 Strata Management (M&M )Regulations 2015 Inter-floor leakage/damage to Party Wall Assumption : the defect is in the parcel above HOW TO DO by Management 7 days(asap) 5 days Inspect certificate of inspection 7 days rectify If deny access, fine <RM50K or jail 3 years

20 Strata Management (M &M) Regulations 2015 HOW TO DO Bond for Unregistered Property Manager S32(2) If the person or agent is not a registered property manager, he shall not act to undertake such maintenance and management of the common property unless he has lodged with the management corporation a bond in Form 12 to be given by a bank, finance company or insurer. S32(3) The amount of the bond shall be a sum that is equivalent to the remuneration or management fees for a period of twelve months or a sum of fifty thousand ringgit whichever is higher.

21 Strata Management (M &M) Regulations 2015 THIS TO DO Deposit by Developer To rectify Defects on Common Property S46/47 A developer shall, within 21 days prior to the delivery of vacant possession.. give written notice to COB...in Form 25..with a certificate of estimate cost of construction..the amount of deposit shall not be less than zero point five per cent of the estimated costs of construction or fifty thousand ringgit, whichever is higher...in cash or bank guarantee valid for the defect liability period.

22 Strata Management (M &M) Regulations 2015 HOW TO DO Section 80 MONEY NOT REQUIRED FOR IMMEDIATE USE All moneys in the accounts required to be opened and maintained under this Part which exceeds Ringgit 5,000 and which are not required for immediate use, shall be placed or deposited by the management corporation, as the case may be, into an income-bearing deposit account with a bank or financial institution. MUST PLACE INTO FIXED DEPOSIT