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Hold
developers accountable
The Sun
22/7/2004
I REFER to the letter from "Small Fish in a Big Pond" (theSun
Weekend July 17-18) on the issue of sinking funds.
This is the problem faced by many a management corporation (MC) when
the transfer of responsibility arises pursuant to Section 41 of the
Strata Titles Act.
The Act is silent on the responsibility placed on the developer to
undertake a transfer of the sinking fund (actually called "Special
Account" in the Act).
It is the responsibility of the developer to be accountable to the
incoming management council on the other account, ie a full account
of all monies collected from the owners from the date of formation
of the MC to the date of handing over of the responsibility to the
new council, comprising the parcel owners.
It is, of course, the right of all MCs to obtain the assistance of
the Land Office to procure the funds and the accounts, and if all
else fails, a court action is commenced.
The developers are not going to give these monies to the MCs on a
silver platter.
This brings me to the next point.
Why do the authorities keep quiet when this practice is rampant all
over the country?
Why is the law not amended to ensure that at the time of the
transfer of responsibility to the parcel owners, an obligation be
placed on the developers to submit an audited account of all monies
received and spent?
Also, compel the developer to transfer the funds on the day the
first AGM is called, failing which penal provisions should be
applied.
It is only with the threat of a jail sentence do most developers do
what ought to be done.
The authorities should consider incorporating the following
amendments to the laws:
MCs to be deemed to come into operation within six months of the
issuance of the Certificate of Fitness;
Three of the parcel owners should be members of the MCs until the
date of the first AGM;
A complete audited accounts and all monies should be handed over at
the first AGM to the new council;
Neither the developer nor its representatives should be allowed to
be council members; and
All parcel owners be allowed to attend and vote at the AGM.
Jagdish Chandra
Kuala Lumpur
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