You may have heard the term “strata property” more frequently of late in Malaysia. It’s actually an Australian innovation in property law, where individual ownership of part of a property is combined with shared ownership.
Strata properties are commonly associated with condo developments and gated communities. In Malaysia, land scarcity and a growing demand for security features saw a rise in the popularity of these properties.
What Is A Strata Property?
A strata property is a scheme where the building or land is divided up into individual lots, with common property.
Common property includes all parts of the building that are shared by all individual owners. It refers to any areas of land or buildings that are not divided as being within a parcel.
Some examples of common property include:
- Floors, including a ramp or stairway
- Boundary walls
- Pipes or electrical wiring within the common property or those that service more than one lot
In Malaysia, the term “strata” dates back to the 1980s. In response to the many multi-storey structures that sprouted up as a result of urbanisation in major Malaysian cities, the term was legally introduced in 1985 with the Strata Titles Act 1985 (STA 1985).
The STA 1985 was the first piece of legislation that specifically governed the subdivision of buildings into parcels and strata titles.
However, over time, the STA 1985 became insufficient – it lacked coverage when it came to the management aspect of these subdivided buildings.
The Building and Common Property (Maintenance and Management) Act 2007 (BCPA 2007) was then enacted to address the issue of the maintenance and management of these buildings.
Over time, the co-existence of both STA 198 and BCPA 2007 resulted in confusion on the interpretation and application of these laws, and an overhaul was needed.
The Strata Management Act 2013 (SMA 2013) was introduced in 2015, and BCPA 2007 was abolished.
This act aims to consolidate the rights and responsibilities of residents, landowners, and developers to ensure efficient and continued management of these properties.
How Do You Define ‘Strata Title”?
A strata title is a type of land title. Titles issued by the government fall into one of two categories: individual title, and strata title:
- Individual titles are usually issued for landed properties, which can include developments like terrace houses and bungalows. You’re issued with this title when you’re the sole owner of the whole piece of land.
- A strata title is usually for properties like condos, apartments, or landed properties which have gated security. They’re basically separate individual titles, except issued to units of houses or high-rises within a development that share common facilities.
One of the typical features of strata developments is that there are common facilities and areas which you share with all the other residents. These facilities can include swimming pools, clubhouses, and gyms.
What Rights Do I Have As A Strata Property Owner?
As an owner of a strata property, you actually have a say in how the residence is being run. Of course, it’s the duty of the management to ensure the property is being maintained and managed well.
But, should the management not do a good job, your rights serve as a tool to help influence the way the property is managed.
Take note, however – you, as a strata owner, also have your own responsibilities.
For example, you have to pay for the maintenance fees and sinking funds on time. Paying for these on time is important for the upkeep and maintenance of your strata property.
Let’s dive straight into some of the key rights you have as a strata property owner.
1) You have the right to vote at Annual General Meetings (AGM) and Extraordinary General Meetings (EGM)
In a strata development, the developer must call for an Annual General Meeting (AGM) within 12 months of the first delivery of vacant possession.
This must take place no later than 1 month after 25% of the strata titles are issued.
These general meetings are important for owners – you play a role in nominating the board of members and your representatives. You’ll also be aware of the financial accounts and see how your development is faring.
It’s also where you and the management can work out important issues. If you and the other strata owners are unhappy about something, you can work it out collectively.
However, if there’s an issue that needs to be raised and addressed with the management after an AGM has taken place, an Extraordinary General Meeting (EGM) can then be requested for.
1a) How do I request for an Extraordinary General Meeting (EGM) to resolve issues?
You’ll need to prepare your request in writing first. When it has been submitted to the Chairman of the committee, an EGM should be summoned within 6 weeks.
If the management ignores the request for an EGM, you and the other owners can go to the Commissioner of Building (COB) or the Strata Management Tribunal (SMT) for help.
The COB is a government division responsible for implementing the SMA 2013; in other words they’re in charge of maintenance, building management and joint property.
Whereas SMT is a legally recognised body that was formed to moderate any disputes that are related to buildings with a strata title.
1b) How can I vote during these general meetings?
During any AGM or EGM, you have a right to vote on a resolution.
If you want to exercise this right, you’ll need to make sure all of your outstanding service charges have been settled prior to the meeting.
If you fail to do so, you won’t be allowed to cast any votes for resolutions. Each parcel of land or unit is entitled to one vote.
If you’re a strata co-owner, you can vote on the owner’s behalf. For example, if your spouse owns a unit, you’ll be able to cast a vote on their behalf.
Note that unless you’re a strata owner, you won’t be allowed to become a committee member.
2) You have the right to request for a review of the Maintenance Fees and Sinking Fund
Maintaining a strata development costs money, and this money comes from the sinking fund and maintenance fees you pay.
Maintenance fees are monthly payments used for the maintenance of common facilities and property, like swimming pools and lifts. They also fund the security services of a development.
A sinking fund covers future capital expenses. These expenses cover things such as repainting the facade, replacing fixtures, or refurbishment. The fund needs to be able to cover all the development’s expenses, and is usually collected in advance.
In the event you and your fellow owners are unhappy with the fees implemented by the management – increase in charges included – you can apply for it to be reviewed by the COB.
The COB will then determine the right amount for these charges, or engage a registered property manager to recommend the appropriate amount.
The COB is essentially in charge of 6 main functions:
- Conducting inventory on buildings within the relevant local area.
- Ensure the establishment of a Joint Management Body (JMB) for development involving stratified planning.
- Resolving any dispute between the developer and the purchaser relating to the establishment of the JMB and account maintenance.
- Monitor the action of a developer in addressing repair defects.
- Enforce the law stipulated in the Strata Management Act (Act 757) 2013 and the Strata Management Act 2013 (Act 757).
- Provide periodic learning about administrative management, audited accounts, financial provisions and other various topics related to the management of JMB/MC.
Additionally, as a parcel owner, you’ll get to receive a copy of the strata development’s financial report, which is usually sent before the AGM.
Take the time to go through the report so you can see how your money is being spent towards the upkeep of your property.
3) You have the right to file a claim under the Strata Management Tribunal
As a strata owner, you’re protected under the Strata Management Tribunal (SMT).
Any disputes related to strata management fall under the SMT’s jurisdiction. This tribunal was formed to provide solutions for disputes related to the failure of a strata management to perform duties, functions, or powers imposed by SMA 2013.
Disputes filed under the SMT can be dealt with at a minimum cost, since no legal representation is allowed – this means that high legal costs won’t be a problem. Filing fees are also lower compared to a court proceeding.
However, the SMT has a monetary jurisdiction not exceeding RM250,000 – what this means is that they can’t entertain a case where there is more than RM250,000 involved.
4) You have defect liability period rights
As a strata owner, you have a defect liability period of 24 months, which begins from the date you receive delivery of vacant possession and the key to your property.
During this period, you can claim for any defects in your property such as cracks on the walls, leaks, water stains, shoddy paintwork, or other structural faults.
Why Is It Important To Know My Rights As A Strata Property Owner?
By knowing your rights such as the ability to vote at general meetings, you’re empowered to play a role in ensuring effective management of your strata development.
One such example is a strata property owner who dutifully paid all his bills on time and enjoyed the development’s communal facilities.
Over time though, he realised that the communal facilities he once enjoyed were no longer accessible or not being maintained.
The swimming pool was inaccessible for months, the playground was dilapidated, and the guards weren’t doing their rounds. At one point, the water supply was also cut.
Eventually, the owner and several of his neighbours contacted the COB to seek for advice on solving the issue. They were advised to call for an AGM.
When they held their AGM in 2018, they realised that the last AGM that had been held was 3 years ago.
They also became aware of the situation in their community, and how the management had accumulated a huge debt of close to RM1 million.
Due to the lack of enforcement and poor management by committee members, many property owners did not pay their bills such as maintenance fees and sinking funds. As a result, residents were deprived of their facilities.
Now that you know what rights you have as a strata property owner, you’re more equipped to handle any issues that may arise from living in a strata property.