Archive for the ‘Property Management’ Category

Why Penang apartment and condominium purchasers need to aware about COB, JMB of ACT 663?

Tuesday, March 31st, 2009

All stratified buildings in Malaysia are required to form Joint Management Bodies (JMBs) during the initial period (whereby strata titles are issued and pending transfer to unit owners) before the deadline 12th April 2008 in accordance to the Building and Common Property (Management and Maintenance) Act 2007 [BCPMM Act- ACT 663].

In mainland Penang, the Commissioner of Building (COB),  who is also the council president of MPSP recently revealed that although there are a total of  existing 512 stratified housing schemes with a combined 57, 144 parcels, only 53 JMBs and 30 MCs have been formed (Refer chart 1 below).

Chart 1

The recent awareness seminar by the local council – MPSP on the need to set up JMBs(高楼须成立共管机) for high rise stratified buildings in Penang State revealed that despite the deadline is already over and is coming to one year by this 11th April 2009, there are still many high rise buildings have yet to form JMBs. The COB is giving more time to some 400 high rise buildings to set up a JMB for each building.

With the appointment of the local council presidents as COBs and the formation of JMB under the ACT 663, the Malaysian government hopes to address problems faced by high rise buildings as many high rise buildings in the country more particularly low and medium cost stratified housing schemes have been beset with maintenance woes and with some of them experiencing deteriorating stage of maintenance and upkeep after only several years of completion. The quality and standard of maintenance and upkeep of each building has major impacts on the market prices of these stratified housing units, those schemes with good stage of maintenance have been able to maintain or preserve their market values. Likewise, poorly managed schemes are experiencing declining property values. Read more : problems of managing high rise strata buildings and the impacts of ACT 663 and Update on high rise building maintenance - Whither improvement ?.

Chart 2

Chart 3

Chart 4

It is observed that the number of JMBs formed in mainland Penang is lower, only 53 compared to Penang Island’s 115 although both councils received about similar submissions of accounts and minutes of meeting  ie 187 and 184 applications respectively ( Chart 2 & Chart 3), indicating that the level of awareness to form JMBs by high rise building owners in mainland Penang is lower compared to those of Penang Island.

The formation of JMBs for high rise buildings is not progressing as fast as expected. The COB has received many appeals from housing developers to give them more time for establishment of JMBs. These are still many housing developers including PDC Properties – the Penang’s state development agency, have yet to submit their audited accounts to COB for their housing schemes. The COB has identified recalcitrant developers who did nothing on their schemes and will take action soon.

Some pertinent issues brought up at the recent seminar ranged from problems of collection of service charges, parking lots dispute, illegal extension, defects and leakages etc. On the issue of recovery of maintenance arrears, the JMB  in addition to the normal court action against the defaulters,  can now submit a list of defaulters ( arrears more than 6 months) to COB for recovery action and to issue warrant of attachment against the defaulters. So far no precedent action has been initiated by COB against any defaulters yet.

Below are some pointers to help increase apartment and condominium purchasers’ level of awareness on ACT 663:-

*KNOW the progress phase of strata titles registration of your housing scheme whether it is still at first or second or third phase of post-development ;

The first Phase refers to the period whereby in accordance with Strata Title Act(ACT 318), developers are required to submit application for strata title. JMB to be formed within 12 months of vacant possession or 12 months of act in force ie 11 April 2008.

The Second Phase refers to Initial period whereby strata titles are issued and in the process of being transferred to unit owners from the developer. At least one quarter of the aggregate share units of the strata unit owners have to be registered first to form Management Corporation (MC).

The Third Phase refers to the formation of MC where parcel owners takes over responsibility of MC and termination of JMB within 3 three months after formation of MC.

For guide on the phases in relation to ACT 663 & ACT 318, go to impacts of ACT 663 on management and maintenance of stratified properties in Malaysia

*FIND OUT whether your housing scheme is one of those schemes that has been issued with JMB certificate by COB or otherwise. What is the name of JMB and when is the date of issuance and who are the committee members (JMC) if JMB has been set up ?.

Kompleks Bukit Jambul is the first stratified scheme in Penang Island to set up JMB on 21/9/2007..

*CONFIRM your monthly service charge payment; Is it bank into Building Maintenance Account in the case where JMB has been set up or still the developer’s account ? If the payments collected go to developer’s account, has the developer created a separate account for each project or one master account for all projects?

*UNDERSTAND the functions of COB, duties of JMB, duties of developer as well as duties of unit owners to pay maintenance charges.To know more about ACT 663 and ACT 318,  get FREE print out/download on ACT 663 and ACT 318!(Thanks to HBA).

Under these two Acts, The COB Penang has the power to act on matters relating to building maintenance problems and disputes. The COB Penang has dealt with many cases such as ceiling leakages-A property nightmare faced by this Penang blogger. Whilst legal redress is one of the options, the aggrieved owner can refer to JMB/MC and bring his case to COB secretariat to seek intervention of COB.

For advisory on property investments in Penang and Kuala Lumpur, email to us at Izrin & Tan Properties Sdn. Bhd or call us at +604 6588333 (Penang Office) or +603 92839782 (Kuala Lumpur Office) and we would be pleased to assist.

Focus on the impact of new legislations on management and maintenance of stratified properties in Malaysia

Tuesday, September 4th, 2007

Following the recent amendment to Strata Titles Act 1985 and the newly implemented Building and Common Property (Management and Maintenance) Act 2007 [BCPMM Act] which came into force on April 12, 2007, all stratified properties, including low-cost flats, apartments, condominiums, town houses, shopping complexes, industrial buildings, shop offices and gated communities, fall under the jurisdiction of the BCPMM Act 2007.

The mergence of the 2007 latest amendment of the Strata Titles Act 1985 with the Building and Common Property (Management and Maintenance) Act 2007 will enable the authorities to appoint Commissioner of Building (COB) to oversee the management and maintenance of stratified properties.

In Penang, the local council of MPSP has organized a seminar on 30 August 2007 on the implementation of the newly enacted BCPMM Act 2007. The talk was presented by Dr Azimuddin Bahari, Director of Strata Title Division, Lands and Mines Department of the Ministry of Natural Resources and Environment whilst another seminar was organized by LA 21 High rise Buildings Working Group at the MPSP Hall Bukit Mertajam on 18th March 2007. Two speakers, Dr Tiun Ling Ta and Lawyer V. Amareson were invited to talk on the current issues and problems of management and maintenance of high rise buildings and recent amendments of the related legislations respectively. More than 80 people including members of management corporation (MC) and Residents Association(RA), high rise unit owners, practicing lawyers, valuers and property managers, representatives of REHDA Penang and MPSP’s officials attended the recent seminar.

Intproperties.com has blogged and zoomed into this growing concern subject of management and maintenance of stratified properties by, firstly, looking into what are the issues and problems confronting stratified properties in Malaysia prior to the recent amendment and newly enacted BCPMM Act 2007 and secondly, the impact of the newly implemented BCPMM Act 2007 to the stratified properties owners.

Issues and Problems of managing high rise strata buildings

Dr Tiun, who presented his talk at the earlier seminar, pointed out factors contributing to the problems of high rise strata buildings such as ignorance of buyers, insufficient legislation, ineffective management, lackadaisical attitude of the occupiers etc. More related articles at Problems faced by owners of strata title properties and Strata-title time bombs due to poor upkeep. It was reported that condo woes on the rise. The problems of high rise buildings do not only affecting the low cost flats and apartments but high end condos as well.

Already there are some high rise flats and apartments in Penang became “walk-up” flats due to faulty lifts and poor upkeep, causing much hardship to the unit dwellers. The problems are further aggravated when there are still no strata titles for the unit owners despite being completed for many years: Title woes still a fact. More updated featured articles at local Chinese paper on high rise maintenance at high rise maintenance problems, whose responsibilities?–Part I and Joint Management Body (JMC), solution to dispute between units owners and developers–Part II.

The stage of upkeep and maintenance of stratified housing units within a housing scheme can become a critical factor affecting the market prices of these stratified properties. Well-upkeep stratified units generally are able to sustain and maintain its market prices and may appreciate in value over times. On the contrary, poor upkeep stratified units in deteriorating conditions even located in prime areas could suffer price drop or value shrinkage due to poor market demand as potential buyers would want to avoid or shun buying stratified units in poorly maintained housing schemes.

The impact and implementation of the mergence of the 2007 latest amendment of the Strata Titles Act 1985 with the Building and Common Property (Management and Maintenance) Act 2007

Whilst Dr Azimuddin began his talk by explaining the Section 4 amendment and the 3 phases (1–application for strata title period, 2- Initial Period, 3- Formation of MC) and the relationship between the initial period under the Strata Title Act 1985 to the BCPMM Act 2007(See charts below).

Chart 1

Chart 2

The first Phase refers to the period whereby in accordance with Strata Title Act, developers are required to submit application for strata title. JMB to be formed within 12 months of vacant possession or 12 months of act in force ie before 11 April 2008.

The Second Phase refers to Initial period whereby strata titles are issued and in the process of being transferred to unit owners from the developer. At least one quarter of the aggregate share units of the strata unit owners have to be registered first to form Management Corporation (MC).

The Third Phase refers to the formation of MC where parcel owners takes over responsibility of MC and termination of JMB within 3 three months after formation of MC. Related links on Formation of MC and its duties and responsibilities, Powers of MC and Guidelines on managing Management Corporations.

He went on explaining the regulatory bodies and the appointment powers of COB and the implementation of the Acts through their mergence such as formation of Joint Management Body (JMB)- its duties and powers, Building Maintenance Account (BMA) and Building Maintenance Fund (BMF), Sinking Fund, Managing Agent and Recovery of service charges. Recommended link on the BCMPP Act 2007 ; maintenance of a building.

Under the new BCPMM Act 2007, developers of high rise buildings are required to jointly set up joint management body (JMB) with high rise unit owners or be fined. Set up JMB fast, residents of high-rise buildings urged.

Likewise, the latest amendment of the Strata Title Act requires purchasers or original unit owners to apply for ownership transfer within 12 months from the date of issuance of strata title. For high rise unit owners whom may have whatever reasons to delay the ownership transfer, beware that under Section 40A, Strata Title Act 985 (amendment 2007) which stipulates that who fails to comply shall, on conviction, be liable to a fine of not less than one thousand ringgit and not more than ten thousand ringgit per parcel. Related link: Transfer ownership of strata titles or be fined.

During the seminar, we were informed that the Council President of MPPP and MPSP would be the COB for Penang Island and Seberang Perai respectively. Although the BCPMM Act 2007 has been in force since 12 April 2007, a team of officers to assist the COB in carrying out the duties as stipulated under the new Act has yet to be appointed. Many would hope that the Penang COB would expedite the appointment of its team of officers so as to act fast to overcome some of the problems faced by stratified properties owners whilst some anticipate that there would be more last minute formation of JMBs only when the clock is ticking nearer to the dateline of 11 April 2008 to avoid being penalized. More views and comments about the new Act at defuse the time bomb of strata title and New Act comes under scrutiny.

For advisory on individual property needs, email to us at Izrin & Tan Properties Sdn. Bhd. or call us at +604-6588333 (Penang Office) or +603 92839782 (Kuala Lumpur Office) and we would be pleased to assist.


Dr Azimuddin Bahari

Dr Tiun Ling Ta.

Participants attending the seminar organized by LA 21 High rise Buildings Working Group.

High-rise strata buildings are mushrooming in new townships of Penang