The Star Penang
18/10/2004
Developers and property management companies should be
transparent and accountable when using funds entrusted to them by
housebuyers.
Penang High-rise Unit Owners Association president Assoc Prof Dr
Tiun Ling Ta said the amended Housing Development Act, enforced in
2002, allowed developers to collect 10% of the monthly maintenance
fee as sinking fund each month.
However, developers and management companies were also required
to submit audited accounts and expected expenditures for the
acknowledgement of unit owners.
Prior to the amendment, the Act did not provide for such a fund
but developers would collect a certain sum of money from purchasers
for the sinking fund or a common fund.
Sinking fund is for the purpose of repainting or replacement of
any fittings in any common property.
“As buyers have entrusted the developers with their money,
developers should be transparent on the maintenance of the fund.”
Dr Tiun was commenting on news reports that 179 property owners,
from BJ Court Condominium, U Garden Resort Condominium, N-Park
Resort Condominium and Sunny Point commercial complex had lodged
police reports against a developer for failing to show them the
accounts for their sinking funds.
An official with the management company was quoted as saying that
they need not seek owners' approval to use the common fund for the
purpose of maintenance and upkeep of the common property as stated
in the supplemental Sale and Purchase (S&P) agreements.
Dr Tiun said purchasers had the right to reject any supplemental
S&P agreement because under the Act, the S&P should be the only
legally binding document.
“It is questionable whether a supplemental S&P agreement is
recognised by the authorities or is just an agreement between the
developer and the purchaser,” he said.
Real Estate and Housing Developers Association Malaysia (Rehda)
Penang branch chairman Datuk Eddy Choong said purchasers could bring
their case to the court if they could prove a case of criminal
breach of trust.
Describing the matter as a case of interpretation, Choong said
buyers should understand the S&P agreement before signing.
