Strata law in this country began five decades ago as a small part of the National Land Code 1965 — Part Nine, Chapter 1, Sections 151 to 157, 161 to 163, 355–374 (subdivision of buildings and issuance of subsidiary titles). The code came into force on Jan 1, 1966.
In 1985, Parliament passed the Strata Titles Act 1985 (Act 318). It was a humble beginning, containing the usual components of strata law, fashioned after the corresponding legislation then prevailing in New South Wales, Australia.
There was no provision for the settlement of disputes, probably due to the belief that few problems would occur. Act 318 applies to Peninsular Malaysia only, because Sabah has its Land (Subsidiary Title) Enactment 1972 and Sarawak has its Strata Titles Ordinance 1974.
Following this, there was an amendment in 1990 (Act A753), again in 1996 (Act A951) and in 2001 (Act A1107). The objectives of these three amendments were to speed up the process of subdivision of buildings and the issuance of strata titles, strengthen the management corporation (MC) and establish the Strata Titles Board (STB), respectively. Later developments show that STB was a failure and a better alternative must be found.
On April 12, 2007, the fourth amendment came into force (Act A1290). It introduced the computerisation system of strata titles in the land registry, allowed the subdivision of land (which led to a dramatic rise in gated communities), required the developer to apply for strata titles within six months of the certificate of completion and compliance (CCC) being issued, required the transfer of strata titles to the purchaser to be done within 12 months, and added new provisions affecting the STB.
On the same date Act A1290 came into force, the government introduced a new law (Act 663) to “provide for the proper maintenance and management of buildings and common properties”. Act 663 sees the establishment of a Joint Management Body (JMB), Joint Management Committee (JMC), house rules, building maintenance fund and sinking fund, and managing agents. This new law lasted for only eight years, as it was repealed on June 1, 2015, when Act 757 (further described below) came into force.
On June 1, 2015, the fifth amendment of Act 318 came into force (Act A1450). A newly minted Section 8 speeds up the process of subdivision, as the developer must now apply for it within “three months from the date of issuance of the document that certifies the super structure stage”. The new amendment also shortens the period of the transfer of ownership of strata titles to 30 days (the period may be extended by the director). Act A1450 recognises, for the first time, limited common property and subsidiary MC. It repeals Part IXA of Act 318, thus ending the existence of the STB.
The replacement for STB came under the Strata Management Act 2013 (Act 757), in force on the same day as Act A1450. Act 757 establishes the Strata Management Tribunal, with jurisdiction to hear any claims not more than RM250,000. The parties who can file their claim include the developer, purchaser, JMB, MC, subsidiary MC, managing agent and “any other interested person with the leave of the tribunal”. At the hearing of a claim, every party is entitled to attend and be heard, but no party shall be represented by a lawyer unless the tribunal is of the opinion that the issue before it “involves a complex issues of law” (Section 110).
Section 112 empowers the tribunal to assist the parties to negotiate an agreed settlement. If the parties reach an agreement, the tribunal approves and records it, and it will then take effect as an award of the tribunal. Section 115 gives the tribunal a choice — whether to hold oral hearings for the presentation of evidence, or conduct it on the basis of documents and other material.
Parties involved in the dispute can hope for an early decision because the tribunal must give its award not later than 60 days from the first day of hearing. Before it makes its award, the tribunal “may, at its discretion” refer to a judge of the High Court a question of law that arose in the course of the proceedings. If the tribunal refers any question of law for the decision of a judge of the High Court, then its award must be in conformity with such a decision.
An award of the tribunal can be challenged by any party on the grounds of “serious irregularity affecting the award”. Unless the tribunal’s award is set aside by the High Court, its compliance is mandatory. Failure to comply is an offence and the penalty, upon conviction, is a fine not exceeding RM250,000, a prison term not exceeding three years, or both.
Under the Strata Management (Strata Management Tribunal) Regulations 2015 (P.U.(A) 103 of 2015), which came into effect on July 1, 2015, any person who fails to appear as a witness or to produce any document or records in his possession is guilty of an offence and can be subject to a fine not exceeding RM5,000, a prison term not exceeding three years, or both.
Alternatively, the tribunal may apply to a court for an order for committal or contempt of court.
At any stage of the proceedings, the tribunal can order any party to produce any documents or materials in his possession for the expeditious determination of the claim. If this order for discovery or production of documents is ignored, the tribunal can dismiss the plaintiff’s claim or strike out the defence, and make its award accordingly.
Looking at the scope and depth of the new law, the high expectations placed on the new tribunal seem to be justified, provided everyone plays his part in translating the letter of the law into reality. Our hope is that this new tribunal will not suffer the same fate as the earlier Strata Titles Board.
A law is only as good as its enforcement. Our strata law is no different.
Salleh Buang formerly served the
Attorney-General’s Chambers before he left for practice, the corporate sector and, then, the academia