Protection from bullies
08/09/2007 NST By National House Buyers Association
For a decade, more than 50 owners of a 90-unit condominium diligently paid
to their developer their share of the project�s quit rent, as apportioned by
For a decade, they thought that this expenditure was bang up to date. For a
decade, they were wrong.
What jolted them into this realisation was a random check at their Local
Council Land Office, which revealed that their developer had used their
remittance towards payment of quit rent that was in arrears, amounting to
That meant what was owing for the current year was overdue, causing a
penalty amounting to a whopping RM96,000 to be slapped (Note: Quit rent has
to be paid to the Land Offices by not later than May 31, failing which a 10
per cent penalty will be levied.)
When the owners confronted the developer, they were in for a greater shock:
Apparently, its reason for the arrears was because the remaining 40 owners
of the 90-unit project had not remitted their share.
Does that mean the 50 law-abiding owners should be saddled with the debt?
The short answer is "no". Since the developer is primarily responsible for
paying the quit rent, it should have pursued recovery from the recalcitrant
owners via all means... or bear the penalty. Not the 50 owners!
Delay tactic for strata title application
But maybe silently, the developer was happy to be in arrears, as it is just
the excuse it needs for not applying for strata titles for the project.
(Note: According to Section 9(e) of the Strata Titles Act, 1985, quit rent
has to be paid up to date at the time of such application. For so long as
the debt is not paid in full, the sub division of any building into strata
titles cannot be processed by the local authorities.)
Among the tactics a developer can use to delay transfer of strata titles
It purports to be appealing
against the re-adjustment of the quit rent rate;
It says it is contesting the
penalty imposed by the Land Office on the arrears to be paid; and
It claims there is no point
making payment before May 31 as the funds can be used towards other more
No more excuses
The phenomenal sprouting of stratified projects over the last decade has
posed new challenges on the law, which has had to be amended and then
re-amended to keep up with the times.
One of the changes in the Strata Titles Act (that came into play on April 12
this year) is the removal of the clause relating to the "duties and power of
management corporations" to "pay the rent of the lot" (Section 43(1) (j) of
the original law).
Because the "lot" refers to the master (parent) title prior to any
sub-division, the deletion implies that it is now possible for quit rent to
be billed separately to individual parcel (or strata) owners.
In a recent dialogue between the National House Buyers Association and Dr
Azimuddin Bahari, director of Strata Management at the department of Land
and Mines in the Ministry of Natural Resources & Environment, the following
points were clarified:
That there will henceforth be a
separate billing of quit rent to individual parcel owners;
Payment for the annual quit
rent is for parcels and not on the entire lot; and
The quit rent for the common
areas in a project will be apportioned by the Land Office and incorporated
into the individual bills;
Azimuddin added that the separate billing change will be effected from the
beginning of 2008, and that any arrears in quit rent prior to the year
ending 2007 will be the burden of a project's developer or management
The onus will thus be on these two parties to take whatever action necessary
to recover the debt.
We sincerely hope that with these type of consumer centred amendments in
action, buyers can at last find protection against bullying and torment from
With enforcement of the laws, this wish might come true.
The National House Buyers Association is a non-profit, non-governmental,
non-political organisation manned by volunteers. For more information surf
to www.hba.org.my or e-mail firstname.lastname@example.org