Owners told to form pre-management corporations early

The Star 01/7/2004 By Dharmender Singh

Buyers of high-rise residential units should set up pre-management corporations as soon they receive the keys to their units.

Selangor Housing and Real Property Board deputy executive director Alinah Ahmad said the board, which helped high-rise unit owners obtain strata titles and take over the management, was also responsible for ensuring that the pre-management corporation was set up at all newly-completed flats.

Two years ago, Selangor became the first state to set up a board to facilitate applications for and handing over of strata titles to owners.

The board also ensures that there are enough low-cost homes for the poor and that only those who qualified were offered units.

Alinah said the board helped owners set up the pre-management corporation in areas where about 30% to 50% of the buyers had been handed strata titles.

The owners take over the management of the flats when titles for all the units have been handed over to the owners.

Previously, owners set up a management corporation when the developer and management company were ready to hand over the management.

In many cases, the owners lacked the experience and knowledge of inherent problems in the area to take on the task.

There might also be problems with residents who refused to pay their maintenance fees, Alinah said.

With the creation of the pre-management corporation, which comprised representatives from the owners, developer and the management company, the owners could learn from the other two parties as they would work together to run the services and facilities.

“We (the board) also provide them with details of how to conduct meetings and manage their accounts, including creating and maintaining sinking funds,” she said, adding that the state government wanted the pre-management corporations set up early to minimise problems later.

“With the state’s target of zero squatters by 2005, we estimate that by the end of that year there will be about 4,000 low-cost flats areas in the state,” she said, adding that most of these would be without strata titles.

She said the board was now helping owners from 65 low-cost flats in the Petaling, Gombak, Hulu Langat and Klang districts obtain their strata titles.

“We have many cases where there is a standoff between the residents and developer or management company, which is hampering applications for strata titles,” she said.

In some cases, the residents have not been paying their monthly maintenance fees because services were unsatisfactory while the management company claimed it could not provide the services as many did not pay the fees.

Though the board mediated in such cases, the accumulated arrears might be too high for the residents to settle.

Alinah said some owners refused to accept the strata titles as they did not want to take over the management of the area, feeling the management company or developer was trying to evade the responsibility of providing the services to residents.

The board had to explain to them that the sales and purchase agreement stated that the residents had to take over the responsibility once all the unit owners in the area had been issued strata titles.

She said the owners viewed taking over the management as a hassle and did not realise the advantages of doing so.

For instance, she said, they could collectively look into ways to reduce their monthly charges by cleaning the corridors in front of the units themselves.

Alinah said with the issuance of the strata titles, another title for the common areas like the playground, open area and parking area would be issued to the management corporation, and the buyers could set up stalls or a kindergarten and collect rental from those operating the services.

“This will provide an income for the corporation, thus allowing the maintenance charges to be reduced,” she said.