MAINTENANCE PAYMENTS: AN INCONVENIENT TRUTH
Contributed by : Wan Hilmi
 
INTRODUCTION

Communal living is a concept which has become increasingly common with the rise of multi-level strata developments in West Malaysia. The working folk of the day prefer to work closer to home as opposed to “raging” through everyday traffic. In cities like Kuala Lumpur and Penang, where land is scarce, developments are aplenty. Luxury high-rise condominiums tower these cities, offering a wide range of facilities from a children’s playground to an infinity swimming pool. But alas, the typical unit owner has obligations which do not befall that of the common landed property owner. These obligations stem from the Strata Management Act 2013 (“SMA”) and the Strata Management (Maintenance and Regulations) Regulations 2015 (“SMR”) and include duties to the management corporation to pay for maintenance and contributions towards the sinking fund.

THE LAW

The procedure in determining the amount to be paid is two-fold. First, the amount of Charges (money collected to be deposited into the maintenance account) will be determined by the developer in proportion to the share units assigned to each parcel. Thereafter, the amount of the contribution to the sinking fund shall be a sum equivalent to ten per cent of the Charges. The proprietor will be given a notice to pay the Charges and contribution to the sinking fund and such payment must be paid within fourteen (14) days of receiving such notice.

What about proprietors who ignore and/or fail to adhere to their obligations in paying for maintenance and contributions towards the sinking fund? The SMA and SMR contain provisions on how recalcitrant proprietors are to be dealt with, including:- (i) granting the right to the management body to impose late payment interest not exceeding 10% per annum until the date of settlement of outstanding amounts; (ii) extending any restrictions or actions against a defaulter’s family or any charge, assignee, successor-in-title, lessee, tenant or occupier of his unit (iii) displaying the list of defaulters and the unpaid amounts; and (iv)  the right to deactivate the defaulter’s access card and suspend the use of common facilities or common services, including car park bays.

The recalcitrant proprietor does not only have to worry about civil repercussions as under the SMA, the managing body may demand payment of arrears by issuing a notice of demand and a defaulter who fails to comply with such notice commits an offence where, upon conviction, can be fined up to RM5,000.00 or imprisonment for not more than three (3) years, or both. Alternatively, the managing body may request for an authorization from the Commissioner of Buildings to recover the arrears by way of seizure and public auction by allowing a warrant of attachment authorizing the attachment of any movable property belonging to the defaulting proprietor which may be found in the building or elsewhere in the State. If the arrears are not paid within the stated 14-day period in the notice, the managing body may file a claim in the Strata Management Tribunal (“the Tribunal”). Failure to comply with an award made by the Tribunal is an offence which, upon conviction, the defaulter may be liable to a fine of up to RM250,000.00 or imprisonment for not more than three (3) years, or both. The defaulter can also be further fined up to RM5,000.00 for every day the offence continues upon conviction.

Has there been enforcement of these provisions? On 5.9.2017, it was reported that seizures under the SMA had already begun where several units of an apartment in Bangi were raided following defaulters’ failure to pay arrears amounting to thousands of ringgit and the defaulters’ movable items were seized by the apartment’s management body, the Kajang Municipal Council and the Urban Wellbeing, Housing and Local Government Ministry. It was reported that the seized items were subsequently auctioned off to settle the arrears or reclaimed by the defaulters who eventually paid up.

CONCLUSION

In summary, the SMA and the SMR is an exhaustive piece of legislation. The joint management bodies are governed by a plethora of obligations and duties of which it must necessarily comply with. This would include ensuring that unit owners have peaceful enjoyment of their unit and the common property. Joint management bodies do everything they can to ensure the smooth running and peaceful living within the building community. However, the proprietor must not take advantage of such generosity. The joint management bodies have the power to enforce such provisions against the errant proprietor. The obligation to pay maintenance payments, howsoever inconvenient, is a truth legally avowed and acknowledged. 

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