A glance through the KL skyline would show you just how developers today prefer to build condominiums instead of traditional townships. Owning a parcel in a residential building is entirely different from owning a conventional landed house. Here are 5 things you need to know about strata homes, before purchasing your first residential strata unit:
1. Laws regulating strata homes
Its protected under the Strata Management Act 2013 & Strata Titles Act 1985. Residents in a strata building should have their own copy of the Strata Management Act 2013 (“SMA”) and Strata Titles Act 1985. These two statutes protect the rights of both residents and the Management Corporation of the strata building and deal with issues such as the composition of the management committee to provisions involving dispute resolutions between proprietors.
2. Maintenance Fees Must be Paid
The most fundamental difference in owning a strata residential parcel compared to a landed property is the need to pay / contribute to the maintenance fund. The SMA provides that a “maintenance account” must be opened and maintained by a developer or a management corporation for purposes of administering and maintaining the strata building.
The maintenance charges covers expenses on the building’s every day utilities and amenities such as security, lift maintenance etc. The management corporation is allowed to take legal action against proprietors for recovery of the same, if the maintenance charges are not paid.
3. Different Limitation Periods for Strata Management Maintenance Accounts
A strata management maintenance account is a running account. From the day that the Purchaser is delivered possession of the Premises, his obligation to pay the maintenance fees would start to run. The maintenance fees would be a running account for which the proprietor is liable to pay for all current and outstanding maintenance fees.
As such, the statutory limitation of 6 years does not apply to actions in recovering unpaid maintenance fees. Management corporations are always open to recover maintenance fees that are in arrears even if they are more than 6 years old.
4. Maintenance Fees Must Be Charged on a Share Unit Basis
Through recent amendments and based on recent case laws, it was held that the calculation method of “square feet” is incorrect, since the legislation requires the rate to be on a “share unit” basis.
What does ‘Share Units’ actually mean ?
Share units are determined for a parcel as shown in the schedule of share units. Each parcel has a share value as approved by local authority, and the share units of a parcel shall determine among other things, the voting rights of the proprietors, and the quantum of undivided share of each proprietary in the common property. It is not always the case that the “share unit” of a parcel will proportionately represent the “square feet” size of the parcel.
5. The Management Corporation Has the Authority to Create By-laws
The Management Corporation has the authority to create and fix certain by-laws for proprietors or residents according to the SMA which allows for certain flexibility. By-laws are a set of rules / regulations that are crafted by the management corporation to regulate certain issues.
