B & CP

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BUILDING AND COMMONPROPERTY (MAINTENANCE AND

MANAGEMENT) ACT 2007

Strata Title

5/14/2012 1Jamaludin Yaakob

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CONTENT

Introduction

Objective of B & P (M & M) Act 2007

Significant Provisions

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Building and Common Property (Maintenance and Management) Act 2007
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Introduction

the common property of a strata development is owned bythe developer until the handover of such on or after thefirst annual general meeting stipulated under the StrataTitles Act, 1985 (Act 318).

However, the issuance of individual strata titles, leadingto the handover of the common property, takes years andresulted in numerous complaints on maintenance andmanagement issues.

It is for this reason, that the Building & Common Property(Maintenance and Management) Act, 2007 was passed byParliament in December, 2006 and in operation from12th April, 2007.



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Objective of B & P (M & M) Act 2007

The main aim of the Building and Common Property(Maintenance and Management) Act, 2007 (Act 633)[BCP Act] is to regulate the maintenance andmanagement of common property in strata developmentsby providing a framework for the establishment of a JointManagement Body (JMB) and the appointment of aCommissioner of Building (COB) to administer the Act.The BCP Act is designed to complement Parts VI and VII

of the Strata Act with regards to rights and obligations ofowners and management issues.



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Significant Provisions

Share units

Common property

Accessory parcel

COB JMB

BMA

BMF

Contribution on unsoldparcels

Purchasers right toinformation



House Rules
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Share Units

Sections 8(1)(a) and 23(2) requires that contributions formaintenance and management charges be collected inproportion to the allocated share units. The allocatedshare units is defined in this Act as share units to beassigned to each parcel by a developers licensed landsurveyor.



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Common Property

Section 2in relation to a development area, means so much of thedevelopment area as is not comprised in any parcel, such asthe structural elements of the building, stairs, stairways, fire

escapes, entrances and exits, corridors, lobbies, fixtures andfittings, lifts, refuse chutes, refuse bins, compounds, drains,water tanks, sewers, pipes, wires, cables and ducts that servemore than one parcel, the exterior of all common parts of thebuilding, playing fields and recreational areas, driveways,

car parks and parking areas, open spaces, landscape areas,walls and fences, and all other facilities and installations andany part of the land used or capable of being used or enjoyedin common by all the occupiers of the building



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Accessory Parcel

Section 4 (Strata Title Act)means any parcel shown in a strata plan as an accessoryparcel which is used or intended to be used in conjunctionwith a parcel

Of interest car parks and parking areas are normallyincluded under common property.

Does this mean that once the developer has assigned carparks intended for use with parcels as accessory parcels

and comply with the necessary allocation of visitors bays,those extra car parks are common property?

From the definition given in this Act, it would appear so.



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Commissioner of Building

In a seminar entitled "Defusing the Property Management

Time Bomb" a questioned as to the criteria for the person to beselected as the Commissioner.

The Act conferred many duties, including conducting recoveryprocedures against errant parcel owners but the power of his

office seems limited. The procedure for recovery of servicecharge arrears differs between the Act and the STA, which maycause problems in the future

Finally, the Commissioner including any of his officers oragents are protected in carrying out his tasks bySection46 of

the Act where it states the Public Authorities Protection Act1948 applies to any suit, action, prosecution or proceedingsinstituted against him. It includes any act committed by him oromission by neglect or default committed in good faith in hiscapacity.



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Section 3. Appointment of COB

(1) The State Authority may, in respect of a local authorityarea, appoint a Commissioner of Buildings to administerand carry out the provisions of the Act.

(2) The Commissioner, shall have charge of the administrationof this Act and Parts VI and VII of the Strata Titles Act 1985and shall perform such other duties as are imposed and mayexercise such powers as are conferred upon him by the

Strata Titles Act 1985.



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The Commissioner of Building has;

a. the power to hear any dispute arising in respect of the BMA;

b. full and free access to the accounting and other records of theBMA;

c. right to appoint an approved company auditor to investigatebooks, accounts and transactions of a BMA and the developermust pay all the expenses incurred for that purpose;

d. under Section 17(4), the developer must insure and keep insured

the completed building against any loss of the building andagainst fire and other risks until the JMB is formed.



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Joint Management Body

High rise residential building owners had to wait for yearsand decades for developers to convert master titles intoindividual strata titles.

During the wait, developers controlled the upkeep of theproperty, appointing subsidiaries or business associates asthe management company.

The role and responsibilities of developers in regard tostrata titled properties including the duty to insure the

building against fire and other risks was regulated by theSTA.

Amendments to the STA recently provide:



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an online system for registration of strata titles;

strata titles to be issued for houses within the gatedcommunity;

strata titles to be issued for old buildings (special buildings); a mandatory requirement that the proprietor and

purchasers do not delay the transfer of ownership of stratatitles;

the removal of requirements on management corporationssuch as to table audited accounts during the initial periodand engaging registered property managers to decide thechargeable amount of maintenance fees on parcel owners;



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coordination with the Act;

for the establishment of the Strata Titles Board (STB) at thefederal level instead of the state authorities and to providethe STB additional powers to hear disputes and decidedisputes and

the deterrent factor of the increase of the fine for someoffences.



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Section 12 requires the JMB or the developer to maintain aregister of purchasers and unsold units and Section 17(b)requires the developer to contribute equally for the unsoldunits as if the units have been sold to purchasers.

This resolves the problem of owners of the past where thereis no transparency on whether developers have contributedtheir portions or when the units are gradually sold off or ifthe developer actually intends to hold the units as

investment properties.



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Section 15(3) stipulates that if the JMB fails to comply withSection 15, every member of the JMB commits an offenceand shall on conviction be liable to a fine not exceeding tenthousand ringgit and shall also be liable to a further fine not

exceeding one thousand ringgit for every day during whichthe offence is continued after conviction.



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Building Management Account

Part IV Section 16: the developer must, before the deliveryof vacant possession open a BMA in the name of the stratadevelopment for each development.

For developments where vacant possession has been given

but the MC has not been established and the developer hasbeen collecting charges for the maintenance andmanagement, the developer can continue to do but it mustcomply with Section 21, which is to submit to the COB

audited accounts of all moneys including sinking fundcollected and expended within six (6) months from thecommencement of the Act.



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BMA is maintained by the developer until the JMB isformed.

The duties of the developer as to the BMA includes:

a) deposit all collections (e.g. deposits, service charges, sinkingfund charges, etc) within two working days of receiving themoneys into the BMA account;

b) pay all charges for unsold units;

c) cause proper accounts of the BMA to be kept in respect of allsums of money received and payments made out



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d. appoint a professional auditor to audit the BMA annually orone month before the date transfer to the BuildingManagement Fund set up by the JMB.

e. within fourteen days of the accounts being audited, file with

the Commissioner of Building (COB) a copy of the statementof accounts certified by the auditors and a copy of theauditors report.



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Building Management Fund

The developer must transfer any surplus moneys in the BMA tothe JMB not later than one (1) month from date of establishmentof the JMB.

Such moneys shall constitute the funds of the JMB which is

called the Building Management Fund which shall beadministered and controlled by the JMB.



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Building Management Fund

The JMB must open and maintain a separate sinking fund,which shall pay such portions to the BMF for the followingmatters:

a) the painting or repainting of common property;

b) the acquisition of any movable property for use in relation tothe common property;

c) the renewal or replacement of any fixture or fitting comprisedin any common property; or

d) any expenditure as the Committee deems necessary.

This section gives powers to the Committee elected by theJMB to decide on expenditures deem necessary by theCommittee.



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Contribution from developer on unsold parcels

Section 12 requires the JMB or the developer to maintain aregister of purchasers and unsold units and Section 17(b)requires the developer to contribute equally for the unsoldunits as if the units have been sold to purchasers.

This resolves the problem of owners of the past where thereis no transparency on whether developers have contributedtheir portions or when the units are gradually sold off or ifthe developer actually intends to hold the units as

investment properties.



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Purchasers Right to Information

Section 13 provides purchasers and intending purchasers theright to information such as:

the amount of charges payable by a purchaser

the time and manner of payment of the amount of charges the extent, if any, to which the charges have been paid

the amount, if any, then recoverable by the JMB in respectof the parcel

the sum standing to the credit of the BMF and the sum thathas been committed or reserved for expenses alreadyincurred by the JMB



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Purchasers Right to Information

Section 13 (continues):

the nature of the repairs and estimated expenditure, if any,where the JMB has incurred any expenditure or is about toperform any repairs, work or act in respect of which a

liability is likely to be incurred by the purchaser of theparcel under any provision the Act, and

the amount paid and to be paid by the developer for unsoldparcels.

This makes it easier for a subsequent purchaser to check onthe financial health of the development as a whole and tomake informed decisions on their intending purchase.



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House Rules

House Rules is the governing document for the propermaintenance and management of the building; whereas thesame is called the by-laws in the Strata Act

Section 8(2)(f) gives JMB the power to make and amend

the house rules. This document must be lodged with theCOB within 14 days of the passing of the resolution of theJMB.

The duty and power of the to enforce Rules lies with JMB.

When the Management Corporation is formed, it mayadopt these Rules for long term used; the JMB would bewise to spend time on the drafting this document.



B & CP

Documents

Transcript of B & CP