If you own a property or looking to purchase, most likely you came across certain ‘strata’ terms which can be very much confusing. Contrary to popular belief, strata properties are not limited to only high-rise units such as condominiums and apartments. Gated and guarded landed developments could also fall under this category. A strata property is defined in the Strata Management Act 2013 (SMA) as ownership or co-ownership of part of a (strata) property. The strata property is divided into lots or parcels for property owners, who will share the same common facilities, and the land usually belongs to the developer.
Who manages and maintains my strata property?
It is either the Management Corporation (MC) or the Joint Management Body (JMB), depending on the strata titles status. MC can only be established after strata titles have been issued and at least a quarter (25%) of the units in the property have been transferred to the owners. In the meantime, JMB is formed between the developer and owners as an interim body tasked to manage and maintain the common property until the Management Corporation (MC) is formed.
The MC is represented by the strata unit owners, voted by other owners who attended the Annual General Meeting (AGM). Main responsibilities of the MC include enforcing rules and regulations, managing and maintaining common properties, paying quit rent, obtaining insurance and complying with relevant laws and policies.
Why do I have to pay for my strata unit?
Basically, to maintain and up-keep your strata property. The money collected monthly will be utilised from common repairs to long term building maintenance. The amount of management fee often depends on the built-up per square foot of your strata unit times with an amount set by the MC or JMB.
There are two types of fees:
- Maintenance Fee
Monthly payments for maintaining common share facilities such as swimming pools, elevators, and security services
- Sinking Fund
Covers capital expenses – such as the painting works, refurbishment or replacement of fixtures. The fund’s amount must be enough to cover all the development’s expenses; it is usually collected in advance and a charge of 10% of the service charge is customarily applied.
If you fail to settle the monthly fee, the JMB or MC may display your name in common areas, suspend services to your unit or stop you from using common facilities, to the extent of blocking your entry into the building by deactivating your access cards.
Should a defaulter still refuse to pay up the amount due, the management body will then file a claim with the Strata Management Tribunal (SMT), where the errant strata owner will be brought before the SMT for an order to pay up. The management could even obtain a warrant from the Commissioner of Building (COB) that allows them to rescind movable property from the defaulter’s unit (television set, refrigerator, etc) and auction it off.
What are my rights as a strata property owner?
You have various rights as a strata property owner. These include:
- Request for an Extraordinary General Meeting (EGM)
Upon request, the Chairman of the committee should convene for an EGM within 6 weeks of receiving the requisition in writing from at least 25% of the strata owners.
- Vote during AGM and EGM
To exercise this right, owners will have to settle all of their outstanding service charges prior to the AGM or EGM. Those who fail to do so will not be allowed to cast a vote for any resolution. Each parcel of land (unit) will be entitled to one vote.
Request to review of Service Charges & Sinking Fund
In the event where owners are unsatisfied with the fees being implemented by the management, including any increase in charges, they could apply for its review to the Commissioner of Building (COB). The COB will then determine the right amount that should be charged or get a registered property manager to recommend the said amount.
File a claim under the Strata Management Tribunal (SMT)
You are protected under the SMT, where any dispute related to strata management falls under the jurisdiction of the SMT. The SMT was formed to provide feasible solutions for disputes regarding the failure to perform a function, duty or power imposed by SMA 2013. Disputes under the SMT can be handled at a minimum cost as no legal representation is allowed (thus eliminating high legal costs) and it has cheaper filing fees as compared with a court proceeding. However, the SMT has a pecuniary jurisdiction not exceeding RM250,000.