MANY believe the legal draftsman had perfected the strata law in Peninsular Malaysia when the Strata Titles Act 1985 (Act 318) was amended in 2013 (vide Act A1450) and the new Strata Management Act 2013 (Act 757), was enacted.
Both came into force on June 1, 2015. Act 757 repealed the Building & Common Property (Maintenance & Management) Act 2007 (usually referred to as Act 663).
These two primary statutes were then followed by two subsidiary legislation – P.U.(A) 103 and P.U.(A) 107. The former contains provisions relating to the newly-established Strata Tribunal whilst the latter contains provisions relating to strata maintenance and management.
This immense legislative exercise was intended to achieve the following significant objectives:
1. The developer must apply for strata titles early in the day (at super structure stage);
2. Strata titles can be issued by the time the project is completed (within 36 months);
3. The developer can thus hand over vacant possession to the purchaser together with the strata title;
4. The developer can execute a transfer of the title, enabling the purchaser to be the registered proprietor; and The registered parcel owners can then form a Management Corporation (MC).
Four years later, the results on the ground were not as envisaged by the lawmakers. A recent report showed that 90 percent of new strata properties in the country are still under the management of a Joint Management Body (JMB) because of the delay in the issuance of strata titles.
Without strata titles, parcel owners cannot form their own MC. So, what went wrong?
Real Estate and Housing Developers’ Association (REHDA) president Datuk Soam Heng Choon said that feedback from the association’s members revealed that ‘none of them were able to obtain strata titles upon receiving the certificate of completion and compliance (CCC) for their projects.’
He added that strata titles are issued by the respective states’ PTG (Land and Mines office). “So, if the state government is slow and the e-Tanah (electronic land administration system) does not work in that state, nothing will come out”.
Soam explained that this is one of the reasons the JMB still exists and remains relevant today and why REHDA wants the government to carry on further amendments of Act 757.
Section 17(3) of Act 318 states “Upon the opening of a book of the strata register in respect of a subdivided building or land, there shall by the operation of this section come into existence a management corporation consisting of all the parcel proprietors …”
In other words, without a strata title registered in the name of a parcel owner, it is impossible to form a MC. Without a MC to take over the management of a strata building, the JMB has to exist and carry out its work.
In Palm Spring Joint Management Body & Anor v Muafakat Akat Kekal Sdn Bhd & Anor [2016] 3 CLJ 665, the issue before the Federal Court was whether a JMB can co-exist with a MC ? The facts of the case were that a JMB for a condominium project was established on 5 April 2008, four months after a MC was established on 8 January 2008.
At the trial stage, the High Court held that the two can co-exist, but on appeal to the Court of Appeal, the court held that they cannot do so. On further appeal to the Federal Court, the court held that under Act 663, the JMB is intended to be an interim body to carry out the functions of MC pending its establishment.
Once the MC has been established under Act 318, the JMB is automatically dissolved. Law reform, to be effective, requires strong institutional support. Without it, it is dead in the water.
The writer is a former federal counsel at the Attorney-General’s Chambers, and is deputy chairman of the Kuala Lumpur Foundation to Criminalise War