HOUSEBUYERS who bought units in condominiums built on commercial land are in a bind over their water tariff.
Their water bill is based on commercial rates and they need to pay a minimum of RM36 a month regardless of whether they use the water.
One such buyer is Olivia Lee, who bought her apartment late last year and received the keys to her unit in January this year.
In February, she was surprised to receive pending water bills which amounted to RM72 from the condominium management.
She said she was caught unawares as she had not moved into the apartment.
Upon meeting the condominium management, she found out that her property was built on commercial land.
Hence she would need to pay the commercial rate for her water and abide by the minimum charges as per the rule set by Syarikat Bekalan Air Selangor Sdn Bhd (Syabas).
Lee said she was unaware that her residential property was on commercial land and she said was not informed by the salesman regarding the commercial rate for utility bills.
“As a first-time housebuyer, it did not occur to me to ask about the land type and the water rate.
“All I knew was the basic freehold or leasehold property.
“I did not know residential condominiums could bear a commercial land title,” she said.
Property investor Dr Adrian Wong said he avoided buying residential property built on commercial land.
He knew about the commercial rate utility charges that he would have to pay.
“We avoid such properties. The salesman will not tell you about the rates unless you ask,” said Wong.
Syabas and SPAN
Syabas corporate communications head Amin Lin Abdullah said there were three types of water tariffs applied to high-rise apartments.
This is defined by the Water Supply Enactment 1997, Water Supply (Selangor) (Charges) (Amendment) Rules 2006.
High-rises such as condominiums and apartments that are non low-cost fall under Tariff Code 17 while low-cost flats are under Tariff Code 18.
Service apartments are classified under the commercial category and they fall under Tariff Code 11.
“High-rise apartments built on commercial land, known as service apartments, with water supplied through a bulk meter would need to pay a minimum monthly water bill of RM36.
“It is the responsibility of the Joint Management Body (JMB) to serve the individual bills to apartment owners and collect payment from the unit owners for the water supplied from the bulk meter,” said Amin.
However, those living in properties in Tariff Code 17 and 18 categories are eligible to participate in the migration programme with certain conditions.
Through the migration programme by Syabas, residents enjoy the domestic water tariff rates, which are the rates paid by owners of landed residential properties.
Service apartments are not eligible to participate in the migration programme.
Amin emphasised that it was the responsibility of the houseowner to check and find out the relevant utility tariff code before or after the purchase of the property.
National Water Services Commission (SPAN) corporate communication director Carol Pelly said condominiums sited on commercial land under the Tariff Code 11 were not included in the bulk-to-individual water meter migration process.
She said that generally if the development order was classified as commercial property, then those living in condominium built on commercial land would not enjoy domestic water rates.
When asked if developers had the duty to inform their buyers of the commercial rate they would need to pay, Pelly said it was not required.
She added that purchasers were bound by the gazetted rates.
What the experts say
Local government and development laws expert Derek Fernandez confirmed that buyers of residential property with commercial titles had to pay commercial rates for water, electricity, land taxes and assessment.
He said this form of development was originally justified on the basis of serviced apartments, or properties operated as a hotel-type facility for short and medium-term stay.
“But over the years, due to lack of a proper legal mechanisms to allow mixed development on commercial plots of land such as apartments on shopping centres, developers justified the use of commercial titles for essentially residential development,” he explained.
He said commercial land category did not require as much green and open spaces as well as other infrastructure that were imposed on residential strata development.
“However, this is no longer the case in Petaling Jaya as the same open space requirements are now imposed.”
He said all property buyers must be aware and understand the significantly higher costs in buying commercial property for residential use.
“Previously, these types of properties were called serviced apartments but now condominiums have all kinds of names that do not indicate the type of property.
“It does not help the buyer to identify if it is indeed a commercial land property.
“Sometimes buyers are caught unaware,” he added.
Fernandez advised buyers to always ask the appointed lawyer acting for them or the salespeople about such details before buying the property.
“Ask whether it is residential or commercial.
“Ask for copy of the master title, quit rent as well as assessment receipts, and relevant planning approvals.
“All these are stated in the sales and purchase agreement.
“If you have doubts, ask for help and do some research online on how to buy property.
“There is a lot of good articles on these matters,” he said.
He said perhaps it was time for the Housing Ministry to look at ways to insist that all residential properties on commercial land to be called serviced apartments.
“The ministry can regulate that all advertisements of such property carry the land use in the advertisements,” he said.
National House Buyers Association secretary-general Chang Kim Loong urged housebuyers to always look at the sale and purchase agreement to understand the terms and conditions.
He also advised buyers to appoint their own lawyers.
“When you have your own lawyers, they would look into your interest and guide you,” he said.
He added that a buyer could not claim they did not know what they were signing.
“Ignorance does not count.
“You must understand or ask your lawyer to guide you through the sale and purchase process,” he said.