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A NEW STRATA REGIME

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INTRODUCTION The Strata Management Act 2013 ("the SMA") repeals the Building and Common Property (Maintenance and Management) Act 2007. The implementation of the SMA is complemented by two by-laws, namely, the Strata Management (Maintenance and Management) Regulations 2015 and the Strata Management (Strata Management Tribunal) Regulations 2015. Further change includes the amendment to the Strata Titles Act 1985, whereby provisions for management of subdivided buildings as well as the Strata Title Board have been moved to the purview of the SMA.

THE COMMISSIONER The SMA provides for the appointment of the Commissioner of Buildings ("the Commissioner"), Deputy Commissioner of Buildings and other officers. The duties, powers and functions of the Commissioner are stated in the SMA.

SCHEDULE OF PARCELS The SMA imposes an obligation on the developers to fi le a schedule of parcels, which show the proposed share units of each parcel and the total share units of all parcels, with the Commissioner, before proceeding with the sales of parcel.

DEVELOPERS’ DUTIES AND OBLIGATIONS The developers' duties are clarified. These include their responsibilities to maintain and manage the buildings and the common property from the date of delivery of vacant possession to a purchaser to a month after the establishment of the Joint Management Body ("JMB") and Management Corporation ("MC"). The SMA also imposes statutory obligations on the developers to establish and manage the maintenance account and sinking fund account before the establishment of the JMB and MC. The time frame for the developers to hand over the administration office and assets of the development area, as well as monies in the maintenance account and the sinking fund account to the JMB is before the expiry of the developer’s management period.

THE DEFECTS ACCOUNT Section 92 of the SMA requires the developers to deposit a sum of money with the Commissioner for the purpose of rectifying defects in the common property of the development area after completion of the same. The amount of deposit to rectify defects is set at the rate of not less than 0.5% of the estimated cost of construction or MYR50,000, whichever is higher.

INTER-FLOOR LEAKAGE AND DAMAGE TO PARTY WALL New provisions covering interfloor leakage and damage to party wall14 are also introduced via the Strata Management (Management and Maintenance) Regulations 2015.

STRATA MANAGEMENT TRIBUNAL The Strata Management Tribunal ("the Tribunal") is established under the SMA to hear and determine claims specified in Part 1 of the Fourth Schedule. The total amount that may be awarded by the Tribunal is limited to MYR250,000. An award made by the Tribunal in a settlement and after a proceeding is final, which binds on all parties and is deemed to be a court order which is enforceable. However, the award can be challenged on the ground of serious irregularity.

SUBDIVISION OF BUILDING OR LAND The Strata Titles Act 1985 is now amended, requiring developers to obtain a certificate of proposed strata plan ("CPSP") before applying to subdivide A BUILDING OR LAND. The timeline to apply for the CPSP is summarized below:
  • Where the sale of the parcel has taken place and the document certifying the super structure stage is issued after 1 June 2015, the timeline to apply for the CPSP is three months from the date of the document certifying the super structure stage;
  • Where the building is completed after 1 June 2015 and the sale of the parcel has taken place before 1 June 2015, the developers are required to apply for the CPSP three months from the date of issuance of the certificate of completion and compliance (CCC);
  • Where the building is completed, and the sale of the parcel has taken place after 1 June 2015, the CPSP’s application is three months from the date of issuance of the CCC, or the date of the first sale, whichever is later;
  • Where the building is completed before 1 June 2015, but the first sale has taken place after 1 June 2015, the period for the CPSP application is three months from the date of the first sale of the parcel;
  • Where the building is completed, and the sale of the parcel has taken place before 1 June 2015, the period to apply for the CPSP is three months from 1 June 2015.

After obtaining the CPSP, the developers shall apply for subdivision within a month from the date of issuance of the CPSP, accompanied with the schedule of parcels and other documents.

TRANSFER OF STRATA TITLES TO THE PURCHASER The developers are required to transfer the strata title to the purchaser within 30 days of the date of issuance of the strata title by the Land Administrator, while the purchaser is required to execute the complete documents of transfer of the strata title within 30 days of the date of notice of transfer of the strata title being served to the purchaser or 30 days of the date of purchase of the parcel, whichever is later. Noncompliance of the provisions mentioned above is an offence and shall attract a fi ne of between MYR1,000 and MYR10,000 per parcel.
 

The SMA is a victory to the National House Buyers Association (HBA) and those who fought for the well-being of stratified property owners in addressing the cumulative problems related to the proper maintenance and management of buildings and common properties. It also ensures uniformity of laws and policies when it concerns the local governments. This SMA legislation includes all stratified properties, residential and commercial. – Chang Kim Loong (Honorary secretary-general of the National House Buyers Association)


LIMITED COMMON PROPERTY AND SUBSIDIARY MANAGEMENT CORPORATION The Management Corporation may create a subsidiary management corporation to manage and maintain the limited common property. The role of the subsidiary management corporation is to represent the interest of a group of parcel owners who are entitled to the exclusive benefits of the limited common property. The subsidiary management corporation shall maintain a maintenance account and a sinking fund account.

CONCLUSION The changes led by the new strata regime are very welcoming as they address the inadequacies and shortcomings faced by the old strata laws, and provide adequate protection to the owner of a stratified property

For further insight in this area of law, please contact our Partners:
Tang Ai Leen
Leong May Ling
Ainal Marlinda Md Said