You’re really excited; the family and friends are all here for the housewarming in your brand new house. As you usher them into the lobby, you stride confidently to the lifts and tap your card.
Funny, it rejected your card. Must be a system error. You try again and…
As you feel your temper rise, your friend suddenly laughs and asks if that is your name and unit on...a list of defaulters. You rush over and realise that your name is up on the list of people who have failed to pay the management charges. You sheepishly realise that you did forget to pay your charges but they have no right to deactivate your access card...right?
Actually, they are allowed to do that
Before we delve into why and how they are allowed to do that, let’s take a couple steps backwards and look at what you’re supposed to pay to your condominium’s management committee.
Generally speaking, there are a few charges that would become due and payable to the management:
- Sinking fund – basically a fund that is used for big projects to maintain the property like repainting the building
- Maintenance fund – basically a fund for small and constant projects like cleaning the pool
Section 12(5) of the Strata Management Act 2013 (“SMA 2013”) provides that as purchasers of the house, you would have to pay the management within 14 days of receiving the notice from them and if you fail to do so, then the Strata Management (Maintenance and Management) Regulations 2015 (“SMR 2015”) defines you as a defaulter.
Regulation 6 SMR
“a defaulter is a proprietor who has not fully paid the Charges or contribution to the sinking fund in respect of his parcel or any other money imposed by or due and payable to the management corporation under the Act at the expiry of the period of fourteen days of receiving a notice from the management corporation.”
Now, as a defaulter, the Regulation allows the management to take certain steps against you and this can include your family members or anyone you rent the property out to.
In summary, this is what the management can do:
- Prepare and display a list of defaulters together with their unit numbers and amount owed
- Deactivate your access card without prior notice and charge you maximum RM50 to reactivate the card
- Require you to sign in to the building if your card is deactivated
- Suspend your use of the common property, including any car park lots that have been assigned to you
Under Regulation 6(2), the management is also allowed to charge you interest on the amount you owe them, starting from the end of the 14 days and extending until the date you pay up, at 10% per annum or any rate that the management decides on:
“If any sums remain unpaid by the proprietor at the expiry of the period of fourteen days...the proprietor shall pay interest at the rate of ten percent per annum on a daily basis or at such rate as shall be determined by the management...until the date of actual payment of the sum due.”
At this point of time, you may be despairing because you owe them a lot and they can do all these things which can make life a tad...unpleasant. However, you don’t have to fret too much because…
The law allows instalment payments
Regulation 6(6) of the SMR allows the management to enter into instalment agreements with you to allow you to settle outstanding debts. These agreements would be on the terms that the management would deem fit. For example, it may be a term of the agreement that if you pay your instalments diligently, the management will not deactivate your access card.
Suffice to say, it’s not the end of the road to not be able to pay your management charges. However, it would be best to take the honest approach and deal with the management on an upfront basis if you have any problems in paying them.