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Condo obligations
Published on: Monday, July 03, 2017

By Datuk John Lo
Sabah’s property market is facing some headwinds now, the effect of which is not as severe as those in Singapore and KL.

The high-end properties in KK are holding on better than those in Singapore.

The exclusive market there has fallen, in some cases, as much as 30pc plus.

Even London, the rich and famous foreigners’ favourite property investment destination, is feeling the chill now.

Though transaction volume has diminished, KK has been relatively unscathed pricewise, because [a] price of crude palm oil is still holding on quite well.

[b] Tourist arrivals, especially from China, are continuing to perform better than expected under the circumstances.

[c] Oil and gas downstream investments which Chief Minister Datuk Musa has signed on in good times are on-going. There has been no roll-back.

[d] KK’s physical development is improving in quality and is gaining recognition as the international city for this region. These factors are stabilising comforts for local and foreign property investors in spite of the less-than-favourable economic conditions globally.

These investors have focused on apartments and condos. Most common complaints are on poor management and maintenance, which in some cases will consequent on poor appreciation, lower rentals and in some cases, reduction in price. For KK to achieve further meaningful progress, this problem must be addressed fast and effectively. If left unresolved, it can ensue many woes to the condo owners eventually.

It is therefore appropriate time for the authorities to critically review the quality of management and maintenance for strata living in Sabah. KL is no better than KK. The obvious and nearest example is Singapore where strata living is popular and the best managed in the region if not in the world. More than 80pc plus Singaporeans live in high rises.

To achieve a coherent approach, Singapore has merged two separate legislations on strata housing into one.

They are “the Land Titles [Strata] Act and the Buildings and Common Property [Maintenance and Management] Act. Today, relevant parts of the LTSA and the entire BCPA have been combined into a single legislation known as the Building Maintenance and Strata Management Act” after extensive consultation with the public and other stakeholders.

This combined legislation together with “very strict, no nonsense” and fast enforcement have uplifted the quality of strata living for condos and HDBs in Singapore that has gained international recognition.

Below are some outstanding features. The Singapore Legislation makes it very clear that condo living is a lifestyle with shared responsibilities. This legislation makes the strata living communities take possession of responsibilities for the management and maintenance of their own properties.

Failure to do so will result in prosecution and penalties, including jail terms in some cases.

Common Properties Condo owners have joint responsibility for common properties which include upkeep of common facilities like lifts, car parks, sport and recreational facilities [for example, swimming pools, tennis courts, gyms and billiard rooms] in their estates.

By-laws governing the use/enjoyment of these common properties must be strictly adhered to by all condo owners.

Share value of the condo owners I believe Sabah has this concept. The share value of a property is a figure that represents the proportionate share entitlement assigned to each strata unit in the same development. The purpose of the share value is to determine the amount of shares each condo owner has in relation to the other owners in the development.

Condo owners’ responsibilities Exterior features are permanent fixtures that form part of the external façade of buildings.

These include openable windows of the condo unit. It is the condo owner’s duty to maintain his lot, including the external openable windows and pipes that are exclusively used by him. The penalties are severe, including jail term and fine if the condo owners have failed to maintain these exterior features.

Further, failure to maintain these exterior features also attract similar severe penalties as the Act also covers potential as well as actual damage.

Inter-floor leaks I have heard of many horrifying cases of extreme irresponsibility of the unit owner above when there is an inter-floor leak in Sabah. Some simply refuse to allow MC and unit owner below into their units for inspection.

Worse, some refuse to pay for repairs.

In Singapore, it is legal requirement for the condo owners to jointly carry out an inspection to establish the cause of any inter-floor leak and proceed with repair immediately. They should also both resolve the cost of repair without delay.

In cases like this, it is presumed that the leak has originated from the upper floor unit unless the owner can prove otherwise. Therefore, the owner of the upper floor unit cannot claim that the leak has not originated from a defect in his unit. He has to jointly investigate the cause with his lower-floor neighbour and proceed with any repairs required immediately.

This provision of the legislation is strictly implemented, penalties are heavy. The unit owner below can also claim damages to his property in addition to repair cost.

Compliance with notices It has become a culture with condo owners in Sabah to ignore any notice served by a public authority for maintenance. Do that in Singapore, the MC may arrange for the required work and recover the costs incurred as a debt owed to the MC from unit owner. In the event of failure to pay, the MC can take legal action to recover the cost of repair, legal fees and related costs.

Improvements and additions to units It is quite common for condo owners in Sabah to simply make improvements and additions to their units without approvals.

Any intention to carry out works on a unit that may result in an increase in the total gross floor area of the entire development, you will need to apply to and obtain a 90pc resolution from the MC in Singapore.

Examples of such works include roofing a private enclosed space and putting a slab over a void in a unit.

Depending on the type of work done, you may also be required to obtain the consent of other approving authorities like DBKK.

Maintenance/failure to pay contributions Again, there are many cases of condo owners failing or refusing to pay maintenance fees in Sabah.

Common reason given is that they don’t stay there or don’t use the facilities. Absent and non-occupier condo owners are the worst offenders. Condo owners in Singapore must pay maintenance fees.

Developers in Singapore are also required by law to pay maintenance fees for units unsold or units sold and not handed over after 3 months from date of obtaining occupancy permits.

The developer of a condo project is required to obtain written approval from the Commissioner of Buildings [COB] before collecting maintenance charges from purchasers.

Sabah must have the legal provision to ensure condo owners to pay up maintenance fees promptly.

This is a very serious matter in Singapore as failure to pay within 14 days after the written demand has been served, you are liable for an offence amounting to a fine. The MC can recover any unpaid contribution through the Small Claims Tribunal or the courts. In more serious cases, the MC, under the act, can also register a charge on the lot for none payment, which may eventually lead to auctioning of the unit.

The condo owners in Sabah need to adopt a more responsible attitude with regards to strata living in their own interest, most important of which are that their properties, with proper maintenance, can maintain value, better return on their investments and fetch better rentals.

The Singapore strata living law is very comprehensive with checks and balances in MC, provisions for decent and proper personal behaviour within the condo property and dispute settlements between the condo owners.

Above all, there is strict, very strict enforcement by the MC as well as the authorities. For those interested for more details, especially the authorities like DBKK and MCs, they can google “Strata Living in Singapore” by the Building and Construction Authority of Singapore. This write up has many interesting ideas that Sabah can consider adopting for the benefits of condo owners and orderly development of the industry.

For a long time the Sabah property development industry has been plagued with the inability of synchronising supply and development. Results? Many abandoned projects, developers absconded and left purchasers in life-long financial dilemma. The Sabah Government has been forced to step in, at great cost, to complete these abandoned projects. To curb excessive speculation and overbuilding by developers the Singapore government has introduced an interesting device, which can be adopted in Sabah. The Singapore Government imposes on developers percentage fine of the value for all unsold units after a given period. With this penalty, over eager developers with unnatural market exuberances are forced to adopt prudence.

I like the Singapore model because the legislation on strata living is comprehensive and well thought out.

It puts the first line of responsibility for management and maintenance where it should be – squarely on the condo owners as a community. This is the right approach as the condo owners must take charge and resolve problems related to their own properties. The condo owners in Sabah must adopt this same attitude.

They owe it, first of all, to themselves if they want to enjoy strata living as a life style, maintain value and hope for appreciation from their investments. They cannot blame the Government or any other parties if they fail in basic decent human behaviour especially failure to pay management and maintenance fees and lack of spirit of co-operation. The only thing the Sabah Government can do is to provide the legal framework similar to the Singaporean one. Most of the implementation, enforcement and resolutions must stay on the shoulders of the condo owners and their MC. More serious disputes can be referred to and settled quickly in the court.

The condo owners in Sabah should stop asking what the Sabah Government can do for you – ask what you can do as responsible members in your respective strata living community.

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