Strata Properties Managers – What are their Duties and Powers?

Due to the scarcity of lands in the Klang Valley, there has been a boom in high rise developments such as condominiums and apartments. These developments are called strata properties as it is constructed on a single piece of undivided land (the master title) which will later be subdivided into individual strata titles for each respective unit. 

Unlike owners of landed property, owners of these strata properties are responsible for the maintenance and management of the common facilities of the development in addition to the units they actually own. To this end, the law has created statutory bodies in the form of a Management Corporation and a Joint Management Body who are responsible for the maintenance and management of the building. 

Main legislations dealing with strata management issues are the Building and Common Property (Maintenance and Management) Act 2007 (“BCPA”), the Strata Title Act 1985 (“STA”) and the Strata Management Act 2013 (“SMA”).

The Management Corporation (“MC”) is created under Section 17 STA to, not only manage the subdivided buildings (“Parcels”) but also to manage and maintain the land and common properties in the strata property. The MCs consists of parcel owners who have been voted into the committee by other owners during an Annual General Meeting.

Common properties essentially include the hallways, gym, swimming pool, playgrounds, elevators, etc. Section 17 provides that the MC comes into existence upon the opening of a book of the strata register in respect of a parcel or land under the STA. 

The Joint Management Body (“JMB”) is a body corporate established under Section 17 of the Strata Management Act 2013 (“SMA”). The JMB consist of the developer and the purchasers after the vacant possession of the parcels have been delivered by the developer to purchasers.

The JMB exists prior to the issuance of the individual strata title for the Parcels. Once the strata titles are issued and the strata book of register is opened, the MC will then be incorporated to take over from the JMB. This is provided in Section 17 (5) of the SMA. 

Powers and Duties of a Management Corporation

Section 143 (2) and (3) of the SMA (which encapsulates the section 76 (1) of the previous STA) empowers the MC to sue for any matters in respect of common property so long as it authorised by the resolution signed by all council members of the MC.  The relevant provision is reproduced as follows:

“(2) Where all or some of the parcel owners or proprietors of the parcels in a development area-

(a) are jointly entitled to take proceedings for or with respect to the common property in that development area against any person or are liable to have such proceedings taken against them jointly;

The High Court in The Summit Subang USJ Management Corporation v Koh Kim Beng [2018] 1 LNS 907, has explained that resolutions of MCs are those which are voted and passed during annual general meetings and/or extraordinary general meetings amongst the management committee pursuant to section 56(2) of SMA, specifically the Second Schedule of the Act.

The powers of the MC in relation to the parcels, land and the common properties are provided in Sections 56(2), 59(2) and 70(2) of SMA. Essentially, the MCs have the duty to properly manage and maintain the strata building and to enforce the by-laws of the respective building. The extent of ‘maintaining’ the individual parcels, land and common properties can be seen specifically under section 59(2) of SMA which authorises the MCs to, among others:-

(i) enter upon any Parcels or the common property to carry out repair or maintenance work; 

(ii) to collect the contribution of sinking fund from Proprietors; 

(iii) to recover from the Proprietors, any money spent for repairs or any work as well as to recover any sums due; 

(iv) take legal actions, at its own expense or as agents to the Proprietors if there are structural defects to the parcels in question

Meanwhile, the extent of the MC’s powers in managing the individual parcels and common properties are provided in section 70(2) of SMA which essentially authorises the MCs to implement By-laws for regulating the control, management, administration, use and enjoyment in the parcels, land and the common properties by way of resolutions passed at general meetings. 

The duties of MC with regard to day-to-day administration are contained under, among others, Sections 59(1), 60, 61, 70(4) and the relevant provisions in the Second Schedule of the SMA and in the Strata Management (Maintenance and Management) Regulations 2015 (“SMMAR”). 

Under section 59(1) of SMA, the duties of a MC includes, among others:-

(i) to properly maintain and manage the parcels and the common property and keep it in a state of good and serviceable repair; 

(ii) to determine and impose the charges to be deposited into the maintenance account for proper maintenance and management of the parcels or lands and the common property; 

(iii) to determine and impose the contribution to the sinking fund to be deposited into the sinking fund account and more. 

Powers and Duties of a Joint Management Body

The duties of a JMB are set out in Section 21(1) of the SMA, which includes, among others:-

(i) to maintain and manage the parcels and common property of the building, and keep it in a state of good and serviceable repair; 

(ii) to determine and impose the charges for maintenance and management of the parcels and common property of the building; 

(iii) to determine and impose contribution to sinking fund;

(iv) to do such other things as may be expedient or necessary for the proper maintenance and management of the parcels and common property of the building;

(v) to comply with any notice or order given or made by local authority or any competent public authority. 

Similar to the MCs, the general powers of a JMB are set out in Section 21(2) of the SMA which includes collecting charges and contribution to the sinking fund from parcel owners based on the allocated share units, carrying out maintenance and management of the buildings and to recover any cum expended by the JMB from parcel owners. 

Like the MCs, the JMB also has the power to impose interest for non-payment or late payment and a penalty sum for any breach of the by-laws.  However, Section 32(3)(i) of SMA very clearly states that any fine imposed on breach of any by-laws shall not exceed RM200.

The powers set out in the Act are non-exhaustive. Even though the Building and Common Property (Management & Maintenance) Act 2007 (now replaced by the SMA) did not specifically spell out the power of JMB to sell, lease or rent out common property, the Court of Appeal in Badan Pengurusan Tiara Duta v Timeout Resources Sdn Bhd [2015] 1 MLJ 110 held that such power is implied under the general provision in s 8(2)(g) of the Act (which is now Section 21(2)(h) of the SMA)  as thing reasonably necessary for the performance of its duties.

There is however a limit to the powers of the JMB. A JMB is not entitled to fix and collect different rates of maintenance charges apart from the “amount per proposed share unit” basis as provided in the SMA. It is important to note that in Muhamad Nazri Muhamad v JMB Menara Rajawali & Anor [2019] 10 CLJ 547, the Court of Appeal held that the JMB and the JMC do not have the power to fix and impose different rates of the maintenance charges which are not sanctioned by the SMA, even if the approval was obtained in a unanimous resolution at the Annual General Meeting. 

Apart from the usual payment for maintenance and sinking fund, the JMB can also require parcel owners to make additional payment pursuant to Section 33 of the SMA.  This is for when the JMB has lawfully incurred an amount of money in exercising its powers to carry out its duties or obligations. Example, this can be expenses incurred to rectify defects to common properties or additional security measures.

Pending the establishment of the MC, the JMB has the responsibility to manage and maintain the common facility and common property. One question that often pops up is whether a JMB can still bring an action after the MC is established. This was answered by the Court of Appeal in Park Access Sdn Bhd & Ors v Badan Pengurusan Bersama Prima Avenue dan DPCC Fasa 1 (Block G, H, I) and other appeals [2018] 1 LNS 711, where upon scrutinizing Section 28(2) of the SMA, the Court held that Parliament clearly intended for the JMB to continue to have the rights to sue and be sued until the expiry of 1 month from the date of the first Annual General Meeting of the MC.

The MC and JMB are essentially bodies incorporated to ensure the living spaces, common properties and facilities of a strata development are well maintained. Looking at the powers and duties conferred upon the bodies, they are akin to a municipal council for each respective development. 

This comes to no surprise as these strata properties consequently create small communities amongst the parcel owners with a view to preserve the safe and harmonious living. Ultimately, instead of burdening the developer or allowing the developer to maintain their authority over the strata properties, the law enforces the parcel owners to be more responsible and mindful of their surroundings when living in a strata property. So when you want to buy a condo, please be ready to love thy neighbour!