If you live in a condominium or apartment, you and your neighbours each own a piece, or “parcel”, in the building.
Hence, the building would have to be subdivided, and you each get a separate title, called a “strata title”, to prove your ownership of your part of the building.
When lots of people live together, share and manage a property together, there can be lots of legal, financial and social issues that need to be handled according to certain policies and rules.
For a long time, Malaysia did not have a single comprehensive law covering strata titles until the Strata Titles Act 1985 was introduced. This governed the subdivision of buildings and the issuance of strata titles, but not the management of that subdivided building.
So there was another Act — the Building & Common Property (Maintenance & Management) Act 2007 (BCPA 2007) — introduced to address the maintenance and management of high-rise buildings and their common property, whether by developers, joint management bodies or management corporations.
With overlaps and even contradictions in these laws and policies (parts of which were under different ministries), and changes in the property landscape, the Acts became inadequate and in need of an overhaul.
The New Strata Regime
Significant changes were made with the Strata Titles (Amendment Act) 2013 (STA 2013) and the new Strata Management Act 2013 (SMA 2013), which have been in force since June 2015.
It has been seen as a big step forward to increase efficiency and give buyers better protection.
Our lawyer friend Geraldine, from Teoh Pek Wei Advocates & Solicitors, helps us explain 5 main legal changes to Strata Laws that you need to know:
1. The Proprietor (registered land owner, not necessarily developer) must apply to sub-divide the parcels in the building at “super structure stage”
Previously, the Proprietor would apply for separate strata titles after the building is completed, that is:
- within 6 months from the issuance of the Certificate of Completion and Compliance (CCC) if the property was sold before it was completed; OR
- within 6 months from the date of the Sale and Purchase Agreement (SPA), if it was sold after it was completed.
Under the new changes, the Proprietor has to apply for a Certificate of Proposed Strata Plan (CPSP) within 3 months from the “super structure stage”.
What is “super structure stage”? Generally, that’s the point where the walls dividing the different parts of the buildings are completed to such a stage that is necessary for measurements of your unit, your neighbour’s unit, the common property, etc.
Once the Proprietor gets the CPSP, then it has to apply for sub-division of the individual parcels and common property within a month. A Certified Strata Plan will be issued, followed by the opening of the book of strata register.
How does it affect you: With the head start, hopefully, your strata titles will be ready by the time you get your keys; unlike before, when it could take up to several years after the building is completed.
2. Time Periods for Perfection of Strata Title Has Been Reduced
Once the strata titles have been issued, buyers will now have to transfer the strata titles to their names within 30 days, instead of 12 months previously.
This is so buyers don’t take their own sweet time to do the transfer. This move is also expected to curb speculative activity for investors who buy properties under construction, with the intention to flip once it’s completed.
How does it affect you: You would need to have enough money to pay the stamp duty for the transfer sooner than before. So start saving up!
3. Limited Common Property & Subsidiary Management Corporation
With the many upcoming mixed-development projects in Malaysia — combining residential units with offices and retail shops — it’s now possible to manage the various components separately.
The concept of “Limited Common Property” means certain common areas can be designated for the exclusive use of a certain group of owners, such as a resident-only swimming pool or an office-only lift.
The Management Corporation (MC) can also create subsidiary management corporations (SMC) to better manage different types of Limited Common Property. For example, a residential SMC would manage the resident-only facilities, the office SMC would be manage the office block amenities, while the shop lot SMC would manage the shop lot facilities for owners, such as the central air-conditioning.
How does it affect you: This system is meant to better serve owners’ interests by improving management efficiency and use of resources, such as the maintenance fees you pay. However, it is still a relatively new concept, and owners need to be educated on their rights and responsibilities.
4. Presumption of Defect
You know the situation where the bathroom in the unit upstairs is leaking into your ceiling and nobody wants to be responsible for it? This common problem is known as an “inter-floor leakage”.
The supplementing regulations to the new Strata Laws — the Strata Management (Maintenance and Management) Regulations 2015 — make it easier to determine who is responsible to fix the problem and how long they have to do it.
Firstly, you must give a notice to whoever is in charge of managing your property — the Joint Management Body (JMB), MC or SMC — of the inter-floor leakage. The management would have seven days to carry out an inspection to determine the cause of the leakage and the party responsible for rectifying it.
(Under the new Strata laws, it is presumed that there is a defect in the unit or common area above, unless proven otherwise, and this has to be taken into account by the management bodies)
If the property is still within the defect liability period, the developer may be responsible.
After the defect liability period, the owner may claim from the Common Property Defects Account if it is due to a common area.
Or if the leakage is found to be from the unit above, the owner of that unit is responsible to make the repairs. If he or she refuses to do so, the management body may fix it and have a right to recover all cost and expenses from the party responsible for the inter-floor leakage.
How does it affect you?
Hopefully you won’t have to live with the drip, drip, drip longer than necessary anymore.
5. Increased sanctions on owners who fail to pay Maintenance Charges
Previously, the Joint Management Body (JMB) or MC could only file a civil suit against owners who fail to pay maintenance and service charges. Now, free-loading owners may have to face criminal charges and fines.
The JMB or MC would first issue a notice for payment, with at least a 2-week window for the errant owner to pay up. If the owner fails to do so and is convicted, he or she will be liable to a fine of up to RM5,000, or imprisoned for up to three years, or to both. And the fine meter continues running at up to RM50 per day after conviction, until payment is made.
How does it affect you? Don’t play play. Quickly pay!
In conclusion, the new amendments to the Strata Act are good and much needed to protect buyers and to keep up with changes in the property construction and development industry.
However, implementation and enforcement are key for the success of any law and to ensure we do not end up with lots of run-down and badly managed high-rise properties.
* The information in this article is for general information purposes only and is not intended to be a substitute for legal advice. Propertypricetag.comand/or our solicitors accept no liability for any loss whatsoever arising from your reliance of the information in this article. If you have any questions regarding legal matters or legal issues, you are advised to obtain consultation and professional legal advice from a lawyer.
