Posts Tagged ‘Act 663’

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.