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Taking a proactive stance
13/07/2002 Published in NST-PROP A Buyer Watch Article by National House Buyers Association

In the second a two-part article, the House Buyers Association proposes certain steps to expedite the issuance of strata titles

Over the past three decades, we've seen the emergence of many highrise projects dotting the skyline. The sad part of all this upward mobility is that we've still not resolved the woes attached to strata titled properties, which hinge largely on the attitudes of both developers and the relevant authorities.

Why the lackadaisical attitude? Several reasons come to mind:

  • The developer has not put aside the expenses/fees for the application.
  • Enforcement is slack and the threats of legal action have so far remained just that; and
  • Unless purchasers make a complaint, nobody knows if strata titles have been applied for or not.

A check with the Ministry of Lands and Cooperative Development, which administers the Strata Titles Act (STA), revealed that unless strata title property owners register complaints, no action will be taken against the developers concerned.

The House Buyers Association is surprised that there is no system to monitor whether developers comply with the need to apply for strata titles. The onus, is seems, in on owners themselves to do the checking. On the same issue, no one knows exactly how many strata property owners are still awaiting their titles.

On our part, HBA proposes the following be done to expedite the application of strata titles:

  • Once the Certificate of Fitness for Occupation (CF) has been issued for a particular building, copies should be made available to the Ministry of Lands and Cooperative Development to ensure that Section 8 of the STA is adhered to;
  • Part of the balance purchase price, say, 2.5% be withheld until titles have been transferred to the unit owners;
  • Regulations should be imposed to ensure that all aspects of maintenance and cost incidental thereto shall be the sole responsibility of the developer till control has been transferred to the Management Corporation formed by owners.

Currently, there is no standard to monitor the developer-controlled management of strata title properties except those set by the developers themselves. Our suggestions would give more protection to purchasers and spur developers to expedite transfer of the titles.

Some complaints related to stratified properties that we've received from owners include: having to pay developers "management fees" built into the monthly maintenance charges; lack of transparency on the way these fees are spent; poor maintenance of the property; inadequate parking space; unsatisfactory repairs of defects; and increase of maintenance charges as when the developers decide.

We have also received complaints on the "special account", also known as "sinking fund" or "building fund" being used for purposes other than those intended. Section 46 of the STA defines the restrictions of use of this "special account" and using it in any other way is tantamount to a criminal breach of trust.

There have been instances when homeowners have been blamed for the delay in issuance of strata titles because they have refused to take possession of them. HBA feels the sentiments and reasons for such a refusal should be looked into before fingers are pointed at homeowners. After all, homeowners could have valid reasons, such as:

a) Disputes over the standard of management when compared with the maintenance charges levied;

b) Non-payment of late delivery compensation;

c) Shoddy workmanship and deviation from the built-up plans in the Sale and Purchase Agreement;

d) Non-transparency in the use of the service charges and sinking funds;

e) Arm-twisting by developers for payment of "all out-standing charges" (though disputed) in exchange for signing of the transfer of the strata title to the house owners;

f) No common facilities built despite having covenanted in the Sale and Purchase Agreement and the Deed of Mutual Covenant.

One of the most  proactive methods of ensuring that property owners get their strata titles  has been initiated by the Melaka State Government, which came up with a ruling that requires developers to submit applications for strata titles when they apply for building plan approvals for stratified units.

The Chief Minister Datuk Wira Mohd Ali Rustam said this is to ensure that strata titles for such projects are issued at the same time as the CF.

This is certainly good news for buyers in the state.

We commend Mohd Ali for having the foresight to implement such a directive. To lessen the woes of house buyers all over Malaysia, perhaps this ruling should be implemented nationwide.


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