Grey areas of joint management control

TWO of the four car park lifts were demarcated as belonging to the developer. But the joint management body (JMB) insists the maintenance charges be paid from the common maintenance fund.

This is clearly “an oversight on the part of the JMB”, says Malaysian Institute of Professional Property Managers (MIPPM) deputy president Adzman Shah Mohd Ariffin.

Lawyer Lai Chee Hoe, the founding partner of Chee Hoe & Associates agrees. He says: “You cannot take from the common fund when the lifts are part of a parcel belonging to the developer. It does not matter how big or small the parcel is.”

In another case, the joint management body wanted to use RM400,000 out of the total maintenance fund of RM500,000 and sinking fund of RM200,000 to build a clubhouse and a pool in an open area which is within a landed strata development. The clubhouse and pool was to be operated on a membership basis.

Lai says this is clearly a capital expenditure and an asset investment.

“It is not a general regular expenditure but a pooling together of funds to build the clubhouse,” says Lai.

Lai asks: “What does the law says about the sinking fund?”

Incidentally, a sinking fund is a contingency set up by owners of a strata development to provide for future capital improvements like lifts maintenance and painting.

The above two cases were brought up at the Strata Management Dialogue 2017 organised by Rehda Institute in mid-August. Clearly, just as there are issues with individual owners and tenants, there is also abuse on the part of developers.

The event, participated by lawyers, government officials and real estate personnel, underscores the importance for those who live in stratified properties to know their rights.

Housing during our parents and grandparents’ time was a lot simpler. One either lived in a flat, a terraced linked house, a semi-detached or a bungalow. One either owned or rented and each family was responsible for its respective properties while the local councils were responsible for public properties.

According to the Commissioner of Buildings, out of a population of 1.7 million in the city of Kuala Lumpur, 1.2 million live in strata developments as at Dec 31, 2016. That’s about 70% of the city’s population.

Commissioner of Buildings legal officer Mohd Azmi Mohd Shari, in his paper “Current Issues on Management and Maintenance of Multi-storeyed Buildings in Kuala Lumpur” says the city has more than 388,000 stratified units involving 677 developers and 5,655 projects. He says the completion of mixed integrated projects and transport-oriented projects are expected to bring about new challenges even as old ones remain unresolved.

He says these projects usually comprise a residential portion, a hotel element and a shopping mall. Some come with an office component.

Azmi says the hotel and shopping mall maintenance charges should be higher than the residential portion. “The establishment of the management committee was also vague and inconclusive.”

Azmi says various issues cropped up in stratified multi-storey developments and since the commission was set up, all sorts of complaints have been directed at them.

“But we are not the police or the Malaysian Anti-Corruption Commission.”

Instead, its role is to equip the people living in these stratified developments, via the different management committees and property managers, to self-regulate, he says.

Whether it is a single strata high-rise block or a large-scale mixed used development, Tunku Abdul Rahman University College lecturer Wang Hong Kok concurs with panelists and speakers that issues surrounding such projects will intensify.

Wang expects most issues to be about usage and sharing of costs.

In many instances, those from both sides of the divide – joint management bodies/management committees and owners – will have to be “courageous” as they exercise their respective rights and duties, he says.

Wang echoes concerns shared by dialogue speakers that maintenance issues at affordable and social housing is a problem that has been swept under the carpet for years.

With today’s emphasis on building more affordable housing, Wang asks: “Can the people who live in such housing self-govern?”