Act comes under scrutiny
30/07/2007 The Star
There is a lot of uncertainty pertaining to the Building and Common Property
(Maintenance and Management) Act, 2007 and industry players, including
purchasers, want it to be further fine-tuned
THE new Building and Common Property (Maintenance and Management) Act 2007 (BCPMM
Act) that was gazetted on April 12 came under intense scrutiny at a seminar
on property management recently.
While the lively one-day seminar on Defusing the Property Management Time
Bomb held in Petaling Jaya once again focussed on the perennial problem of
stratified properties, speakers and participants also brought up many grey
areas in the new Act.
Although the Act is aimed at plugging loopholes and grey areas not covered
by the Strata Titles Act, it is felt that it has to be fine-tuned to be
effective and fair.
Under the BCPMM Act, the roles of the developers, buyers (parcel owners) and
management corporations (MC) are clearly defined and three new bodies were
introduced to implement proper building maintenance, namely the joint
management body (JMB), the commissioner of buildings (COB) and managing
The role and responsibilities of developers of stratified properties are
limited to only one year. After that a JMB must be formed to manage and
maintain the common property until the issuance of strata titles and
formation of the MC.
The COB is a new authority established by the Government to oversee and
enforce the Act. The COB is also responsible for adjudicating all recovery
procedures against errant parcel owners.
All stratified properties, including low-cost flats, apartments,
condominiums, town houses, shopping complexes, industrial buildings, shop
offices and gated communities, fall under the BCPMM Act.
The seminar raised many issues.
Lawyer Lee Kim Noor, in her paper COB: The Mission Impossible, said although
the BCPMM Act was intended to help purchasers, it was a “double-edged sword”
as now JMB members could be jailed or fined heavily for offences under the
For example, if they fail to dissolve the JMB within a month from the first
meeting of the MC, every JMB member could be fined RM10,000. Such punitive
actions, she said, would deter parcel owners from wanting to be elected to
She said there was also the question of who should be the COB. “The COB
should be formed before the BCPMM Act comes into force. It is too wide and
ambitious. It gives the COB so many duties, but it does not have the power
of a Consumers Tribunal in handing down judgments.”
She said the drafter of an Act should be more open-minded before finalising
Another grey area is the JMB's first meeting where election is by a show of
hands. Lee said a developer may own 80% of the properties but it had only
one vote. There is nothing mentioned whether a show of hands or ballot is
required for subsequent meetings.
Another issue is the procedure for recovery of service charge arrears that
differed between the BCPMM Act and the Strata Titles Act. “The COB should
have the power to enforce recovery of service charges against the tenants,”
Meanwhile, another issue is whether the JMB can be formed before the April
11, 2008 deadline. This is because under the BCPMM Act, all completed
buildings (vacant possession handed over before the Act) have 12 months from
the start of the Act (April 12, 2007) to form a JMB.
For new buildings where vacant possession is handed over after the Act, they
are given 12 months after handing over of vacant possession to form a JMB.
Bunga Raya Management Corporation secretary S. Venkateswaran, in his paper
How effective is pre-management corporation?” said the Selangor state
government first introduced pre-management corporation about two years ago
and it was aimed at helping to streamline the transition between
developer-managed and owner-managed stratified properties.
He said the initial quorum for establishing the JMB was 25% of the parcel
owners having paid their maintenance charges to vote at the JMB's first
“In practical terms, the JMB can only be established if the developer has
succeeded in collecting 25% of the maintenance charges from the parcel
owners. This will be difficult to achieve if it is a 'sick' project,” he
said, adding that the JMB would comprise a representative from the developer
and a minimum of five and a maximum of 12 representatives from parcel owners
elected at the first general meeting.
He however, noted that Section 15 of the BCPMM Act stated that JMB members
were personally liable for any breach or offence committed by the JMB,
particularly with regards to the management of the building maintenance
“Section 15 may discourage parcel owners from becoming JMB members,
especially when all the financial records are kept by the developer, and
when they are unaware of detailed financial transactions involving the
building maintenance fund,” he said, adding that it might drive away parcel
owners who were keen to help out.
“It may hamper the subsequent formation of the MC,” he added.
He said the rights and responsibilities of the JMB, including those of its
members, would become more complicated if the developer became insolvent and
the project was handed over to receivers and liquidators, or to state-owned
asset management companies.
Among the grey areas in the BCPMM Act was that the term maintenance charges
seemed to refer to only payments due to the building maintenance fund.
“What about statutory levies such as quit rent which are payable to the
Department of Lands and Mines?” he asked.
He said the biggest problem faced by the MCs was that the COB was not fully
equipped, both logistically and administratively, to handle such a mammoth
task covering all states in the country, especially Penang, Federal
Territory, Selangor and Johor which have the largest number of stratified
He proposed that a joint multi-stakeholder advisory panel comprising the
land office, COB, local authorities, developers, engineers, architects,
building managers and MCs be formed soon to address these issues.