As communal living becomes a way of life, take a close look at SMA 2013

By Jonathan Roberts

COMMUNAL living is here to stay as the urban population continues to grow rapidly. Today, there are about 5,500 strata properties in the Klang Valley alone.

Hence it is important for city dwellers to understand the legalisation regime that has evolved throughout the years. The latest law governing strata properties is the Strata Management Act (SMA) 2013 which came into effect on July 2015, superseding the Building and Common Property (Maintenance and Management) Act 2007.

Get to know the SMA 2013
While homeowners are often cautious about defects within their units, they should also pay attention to defects at the common areas.

“Homeowners should never forget to join hands with the management to identify all the defects at the common areas before the defects liability period expires," said Malaysian Institute of Professional Property Managers president Sarkunan Subramaniam.

“If homeowners do not pay attention to the liability period, the repair costs will be transferred to the Joint Management Body (JMB) or Management Corporation (MC) two years after the developer hands over the keys,” he said.

According to Sarkunan, homeowners should note that under the SMA 2013, the first annual general meeting must be convened no later than 12 months from the delivery of vacant possession.

“In the past, some developers tried to hold off the AGM to maintain control over the property instead of passing it on to the JMB or MC.

"This is common when the development happens to have many unsold units. The developers hoped to avoid bearing the maintenance fees for the unsold units.

“However, the Commissioner of Buildings Division (COB) can forcibly ensure that an AGM is called under the new act. Recently, the COB of Klang served a notice to a developer to convene an AGM within the proper time frame.

“If an AGM has not been called after a long time, residents must take action by lodging a report with the COB and ensuring that a notice is issued to the developer,” added Sarkunan.

He said that control of the communal area must be in the hands of the homeowners as soon as possible to safeguard against any mismanagement by the developer.

What’s in it for me?
Endah Promenade chairman Siew Yee Hoong said that while the SMA 2013 empowers the paying proprietors, many strata residents still have not embraced the culture of communal living.

“Residents who do not pay the service charge cannot vote during the AGM. However, many residents are not interested in taking part in the AGM or EGM,” said Hoong.

In terms of dealing with homeowners who refuse to pay their maintenance fees, Hoong reckons that the best the JMB or MC can do is to make life difficult for the defaulters by cutting off their access to the parking bays or the common areas.

While different parties seek different legal recourse, Homebuyers' Claim Tribunal president Datuk Pretam Singh said that the establishment of the Strata Management (SM) Tribunal should put an end to the non-payment of service charges.

By law, any parcel owner or tenant who fails to pay service charges, including quit rent and sinking fund, can be hauled before the tribunal with the implementation of the SMA 2013, Strata Management (Maintenance & Management) Regulations 2015, and Strata Management (Strata Management Tribunal) Regulations 2015.

Sarkunan added that SMA 2013, along with the Strata Management Tribunal, has given the COB more powers, though it is still lacking in some aspects.

“Under the SMA, if a person does not pay his service charges, all we can do is seal the unit and sell what is inside the unit. Whereas in Singapore, you can seal the place and sell the entire unit.

“Today, we have many absentee owners - people who buy several units for investments may not have anything inside their units. As a result, the law is rendered useless,” he explained.

In his opinion, it would be better if the quit rent billings could be charged directly to the strata owners rather than the JMB or MC.

The government is calling for consultants and representations to propose amendments to close off further legal loopholes.

Why property managers?

For a homeowner or property investor, it is essential that the entire development is well-maintained to ensure the value of the homes do not take a dip, which is why the value of well-qualified property manager should not be underestimated.

Subramaniam said that having a property manager is pivotal as their job is to ensure that the building is managed, up kept at the most optimal level and thus prolonging the life cycle of inventories and reduce the replacement cost.

This will ultimately improve the return on investment (ROI) through better yield income and capital appreciation.

According to Hoong, there are many unlicensed property managers who are competent at doing the job, but these firms cannot carry a professional liability insurance cover as they have not been registered.

“Under the SMA 2013, they need to deposit a 12-months bond to the JMBs or MCs in case they do not meet their Key Performance Index (KPI) and so on.

“It is worth noting that many JMBs and MCs are hiring unlicensed property managers without insisting on the 12-month bond as they are unaware that the act demands it.

Understanding the roles of MIPPM

Subramaniam said that MIPPM was formed in the year of 2011 to upgrade the professionalism in property management and become a spokespeople for licensed property managers.

Realising that there are many competent property managers who are not licensed under the Board of Valuers, Appraisers & Estate Agents Malaysia, MIPPM are supporting an amendment in the relevant act to embrace these firms into their property management fraternity.

Hoong, who is also a member of MIPPM, urged the public to attend more public talks as many are still in the dark when it comes to the SMA 2013 and property management.

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