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5 things Malaysian condo owners can sue their management for

2020-01-01 691b2141 a707 421f 8f92 2bc2c1a7f386 Mikaela Anthony

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This article is for general informational purposes only and is not meant to be used or construed as legal advice in any manner whatsoever.

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Note: Although we mention “condo management” throughout this article, this law also applies to apartments, flats, any high rise property and also gated properties in Malaysia.

If you live in a condo, you would most likely have had your share of your problems with the management or developer. You’ve probably put up with a lot of things you aren’t happy about, and you might be sure if there’s anything you can actually do about it. But here we have 5 things that you may or not may have known you can sue your condo management for. At the end of this article, you’ll also find a link on steps to sue your developer.

Before we get into the list of things you can sue your management for, let’s take a step back and look at who actually is the management

  • The developer –  these are the people who bought the land and built your condo on it. For about the first year or so, they’ll be in charge of managing your property. 
  • Joint Management Body (JMB) – your developer is supposed to hold a meeting with the condo residents about a year after your home is to ready for you to move into. Once this meeting is held, a new management will be formed and the JMB will take over the role of managing your property.
  • Management Corporation –  Once strata titles are issued for the units in your condo, a Management Committee (MC) will take over the management. If you don’t know what a strata title is, no worries! We’ll explain it in detail below. But basically, a strata title is given to you to say that you are the sole owner of your house, and issuing this will usually take a little bit of time. 

It’s important for you to know exactly who is managing your property, so that you will be able to hold the right party responsible. Now that we’ve established this, let’s talk about some things you can sue them for:

 

1. Letting your property become run down

Image from MalaysiaGazette

You might have been putting up with a poorly maintained condo for awhile now. But, after awhile, what seems to be an inconvenience may become a hazard in your property. When things start to get difficult like this, we Malaysians are usually quick to complain. But thanks to the Strata Management Act 2013, instead of just going down to the management office and arguing with a worker, you can actually sue them for not doing their work

Section 48(1) of the Act states:

A developer shall, during the preliminary management period and subject to the provisions of this Act, be responsible to maintain and manage properly the subdivided building or land, and the common property.

Section 48(4) goes on to say:

 Any developer who fails to comply with subsection (1) commits and offence and shall, on conviction, be liable to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

What this means is that, if your management fails to do their job and take care of your property as they should, they can be fined up to RM 250,000 or be jailed for a maximum for 3 years, or even both. Yes, it’s that serious. We’ve actually discussed suing a condo management for poor upkeep in depth in another one of our articles, which you can read here.

 

2. Delay issuing your strata title

What a Strata Title looks like.
Image from Zhafir Razak

If you don’t know what a strata title is, the first thing to take note of is that it’s only given to people who live in buildings with two or more stories and landed properties in gated areas. Basically, it is for homeowners who share a piece of land with other homeowners. A strata title is issued to give you ownership of YOUR share in the whole property, i.e. your unit in the entire condo, and this is why it’s a big deal.

In some cases, the title can take years to be issued to homeowners, but this has in turn, caused other problems. If you remember, in the intro, we said that a Management Corporation (MC) cannot be formed until the strata titles of a property have been issued. So, if you don’t get your strata title, the natural flow of how a management should change hands will be disrupted. 

Another problem with not getting your strata title is that if you wanted to sell your condo, the process would be much more complicated compared to if you were sell it with the title.

Also here’s the most important bit: The Strata Title Act 1985 states in several parts of the Act that it’s actually a requirement under the law for your developer to issue your strata title within 3 months of the completion of your condo. So, if they’ve failed to do this, you do have the right to take action against them.

 

3. Not creating maintenance and sinking fund accounts

Image from The Henge Kepong via Facebook

Because your developers are the very first people to be your management, it’s their job to create a maintenance account and a sinking fund account. The fees in the maintenance account are used for the upkeep of areas that are commonly shared by the residents of your condo. On the other hand, the fees in the sinking funds account will be used to renovate any part of the condo whenever needed. As you can see, the maintenance fees and sinking funds play a huge role in ensuring that your condo is in tip-top condition.

[READ MORE: Why you should pay your maintenance fees and sinking funds]

Section 10(1) of the SMA 2013 states:

A developer shall open one maintenance fund account in respect of each development area with a bank or financial institution.

Section 11(1) of the SMA 2013 states:

A developer shall open one sinking fund account in respect of each development area with a bank or financial institution.

If your developer fails to do this, he may have to a maximum fine of RM250,000 or be jailed for a maximum of 3 years, or both. But this doesn’t apply to developers alone. When the JMB and MC take over as your management, they will also be subject to the same laws, and this can be found in Sections 23, 24, 50 and 51 of the SMA 2013.

 

4. Not having an AGM to form a new management

Image from PREBIU

As mentioned above, the developer will have to hand over the management to a newly formed committee after about a year of being in charge. Annual general meetings, or AGMs, are held to discuss any concerns or issued faced by an organization, and it would naturally be important for a housing management to hold such an AGM. The need for a housing management to hold a AGM every year is a requirement under the law.

Section 18 of the SMA 2013 states that the developer, being the first management, needs to convene the first AGM. Failure to do so can incur a pretty heavy punishment as well.

(1) It shall be the duty of the developer to convene the first annual general meeting of the joint management body within the period specified in subsection 17(1) *
(2) Any developer who fails to comply with subsection (1) commits and offence and shall, on conviction, be liable to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

*12 months from the time your house is ready to move into

A group of residents from a housing known as K Residence actually took their developer, Duta Yap to court for failing to form a JMB. There were other issues, such as misconduct within the management and maintenance funds being misused. The residents, however, were very unhappy because a new management was not formed although their homes had been ready to move in over 12 months ago. As the case is still ongoing, we don’t know the outcome yet, but it sure is good to know that these residents are ensuring that they get their rights under the SMA 2013.

 

5. Not insuring your property against damage

Image from Harian Metro

Most of us have insurance policies for things we consider priceless and usually, we buy these policies on our own. Some of us might have insurance for our homes too. But did you know that your condo management is also supposed to provide insurance for your property?

Section 93(1) of the SMA 2013 states:

Any person or body who has a duty or is responsible under this Act to maintain and manage any building shall insure such building under a damage policy with a licensed insurer in accordance with the part.

The Act then goes on to clarify that a damage policy is supposed to insure your building against incidences like “damage by fire, lightning, and explosion” as well as “bursting or overflowing of water tanks and pipes”.

So, you may be able to insure your particular unit itself when you buy your own home insurance policy. But a damage policy provided by your condo management is as important as it may cover a larger scope of things, such as the wiring and pipes in your entire condo.

If you don’t currently have your insurance policy with you, make sure to pop by the management office and get a copy of it. Or, if your condo management doesn’t even have such an insurance policy, then you might have to show them Section 93 of the SMA 2013… and possibly the rest of this article.

[READ MORE: 5 steps to take when you want to sue your condo developer in Malaysia]

Tags:
apartment
condo
strata management act 2013
sue developer
management
691b2141 a707 421f 8f92 2bc2c1a7f386

About the Author Mikaela Anthony

Don't talk to me until I've had my Milo

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