Should there be a new law?
30/07/2005 NST

Streamlining the Strata Titles Act (STA) to give legislative context to a gated comunity (GC) scheme can be complicated, so the faster option may be to create new legislation explicitly for such a scheme.

There are numerous GCs in existence that do not COIne under any clear law, and so they operate on contractual relationships such as a standard Sale and Purchase Agreement (SPA) and a Deed of Mutual Covenants (DMC).

If certain relevant amendments are made to the STA - and quickly ­ then existing developments can be regulated and managed, condominium-style, but with a cluster housing concept.

One important amendment would be to define "strata subdivision", which is the subdivision of one or more parcels, whether or not any parcel is on the same level as another. Remember, l have said (in the main story) that under existing law, the STA cannot apply to bungalows, terraces or semi-dees and that atithorities only allow for "horizontal", not "vertical" subdivisions.

Of course, it may not be possible to giye retrospective effect to the amendments and bring all the existing developments under the law.

However, there is another alternative, and that is to enact new legislation to cater specifically to gated community schemes.

Such legislation could be in the form of a law, which could be called the "Cummunity Land Titles and ManagementAct". Within it, titles should be require to effect transfer of landed property, common areas should be explicitly identified and provisions made for the formationof management corporations by the members of the community.

It should primarily serve as a flexible and contemporary framework for the use of freehold and leasehold land for communally-based arrangements as well as for establishing, operating and managing community land title schemes.

The new legislation could also:

• Be a legislative framework to accommodate all future trends and developments in community titling;

• Create an appropriate environment of consumer protection for owners and future buyers of property in community-title schemes;

• Create a balance of rights for individual owners where the responsibility for self-management is the mainstay of the scheme;

• Further the economic development of community-title schemes by establishing flexible administrative and management arrangements;

• Allow community-title scheme management corporations to control the common property on behalf of the property owners;

• Allow access to information on the community-title scheme; and Create a framework for an effective and efficient dispute resolution;

• Other than these steps, the new law should also strive to provide for the:

• Establishment and basic operation of the community-title scheme;

• Concept of a layered arrangement of community- title schemes;

• Defining of common property;

• Amalgamation and subdivision of cornmunity-title schemes;

• Termination of a community-title scheme;

• Management structures and arrangements;

• Financial and property management procedures;

• Conduct of owners and occupiers;

• Drawing up of bylaws;
  and

• Sub-sale of properry within the scheme.

A great deal of effort will be needed to push such a law through. A key issue will be which Government authority will oversee the new legislation. Will it come under housing development or land management?

It will also have to be distinguished from the Strata Titles Act and have relevance to Schedule G of the Housing Development Act, while the National Land Code and other land related legislation may also require changes to accommodate the new law.

The continue development of GCs under the many laws in Malaysia will be fraught with risks that can
demolish the potential benefits. If this continues, then we may even see the development of such
schemes come to a grinding halt.

While the multiplier effect of any new legislation will be far reaching, the Country may have to consider it seriously, if we want greater transparency in the property market and allow the structured development of new real estate concepts such as gated communities. - Gurjit Singh