...before management corporation is formed – Part 1
ON April 12, the Building & Common Property (Maintenance &
Management) Act 2007 (“the Act”) came into force in all States within Peninsular
Malaysia. The main purpose of the Act is to provide for the proper maintenance
and management of buildings and the common property, AFTER delivery of vacant
possession by the developer to the purchasers and BEFORE the Management
Corporation (“MC”) comes into existence (“the applicable period”).
In line with the recent amendments made to the Strata Titles
Act, 1985 (STA), which now allows land to be subdivided into land parcels to be
held under separate strata titles, the Act will also apply to prescribed
buildings on such land.
Each State Authority will appoint a Commissioner of Buildings
to administer and carry out the provisions of the Act.
The Act empowers the Minister to make regulations for the
better carrying out of the provisions of the Act (“the Regulations”), although
at the time of writing this article, no regulations have been made or have come
The Act is intended to apply to any building or land intended
for subdivision into parcels, and which have been developed for the purpose of
accommodation, including accommodation for commercial and industrial use. The
choice of the word “accommodation” is certainly misleading, as accommodation
usually denotes housing, lodging or quarters. Perhaps the Regulations can make
it clear that the Act is intended to apply to any building or land intended for
subdivision into parcels and developed for the purpose of housing accommodation,
commercial use or industrial use.
It is pertinent to note that the Act defines common property,
more exhaustively than the STA and the Schedule H agreement under the Housing
Development (Control & Licensing) Regulations 1989 (Schedule H). In the STA,
common property means so much of the lot as is not comprised in any parcel.
Schedule H extended this definition to include lifts, refuse chutes, drains,
sewers, pipes, wires, cables, ducts and all facilities and installations used in
common by all purchasers.
Common property in the Act is now extended to include all
structural elements of the building, stairs, stairways, fire escapes, entrances
and exits, corridors, lobbies, exterior of all common parts of the building,
playing fields and recreational areas, walls and fences.
Joint Management Body (JMB)
During the applicable period, the common property of any
building or land intended for subdivision shall be in the hands of a JMB, which
shall comprise the developer and the purchasers. Up until now, the maintenance
and management of a building intended to be subdivided and the common property
(“the maintenance works”) have always been the responsibility of the developer
until the MC is formed.
The JMB is a body corporate, having a common seal, and
therefore can sue and be sued in its name. The JMB shall be deemed to be
dissolved three months from date of the first meeting of the MC.
Duties of JMB
The duties of the JMB are, among others, to:
· maintain the common property and keep it in good
· fix and impose charges for the maintenance works;
· insure the building and apply insurance moneys received for
rebuilding and reinstatement;
· prepare and maintain a register of all purchasers;
· ensure that the Building Maintenance Fund (BMF) is audited
and provide financial statements to purchasers; and
· enforce house rules.
Powers of JMB
The JMB is empowered to:
· collect maintenance charges from purchasers;
· authorise expenditure for carrying out the maintenance
· recover monies due from purchasers;
· acquire property for use by purchasers in connection with
the common property;
· secure the services of a person to undertake the
maintenance works; and
· make house rules.
When must JMB be formed?
If the development is completed before April 12, 2007, and
vacant possession has been delivered to the purchasers and the MC is not in
existence, the JMB must be established not later than April 11, 2008.
However, if the development is completed on or after April
12, 2007 then the JMB shall be formed not later than 12 months from the date of
delivery of vacant possession of the parcels to the purchasers.
There are no provisions in the Act to define when a
development is completed. In line with the recent amendment to the Street,
Drainage and Building Act, 1974, completion should mean the issue of the
relevant certificate of completion and compliance.
How to form the JMB?
It is the duty of the developer to convene the first meeting
of all purchasers within the time frame set out above. If the developer fails to
convene this first meeting, the developer shall be liable to a fine not
exceeding RM25,000, or imprisonment for a term not exceeding three months or
both. Further, if the developer fails to convene this first meeting, the
Commissioner may appoint a person to convene the first meeting.
Until the JMB is established, the developer is responsible
for the maintenance works and this includes the responsibility to insure the
building against fire and other risks.
First meeting of JMB
At its first meeting, the JMB shall elect a Joint Management
Committee (JMC), and then confirm the taking over of insurances effected by
developer, determine the amount to be paid by purchasers to the BMF for the
maintenance works, determine the rate of interest for late payment of charges
and make decisions on any other matter connected with the maintenance works.
The quorum for the first meeting shall be one quarter of the
purchasers who have paid maintenance charges to a Building Maintenance Account (BMA).
Only purchasers who have paid maintenance charges to the BMA are entitled to
It would appear that the developer is not to be included in
the determination of the quorum and is also not a person entitled to vote.
It is not clear whether:
(a) a purchaser is entitled to vote if he had previously paid
maintenance charges to the BMA but is at the time of the first meeting in
(b) a purchaser who has not paid maintenance charges to the
BMA is entitled to attend the meeting or be elected to the JMC, even though he
is not entitled to vote.
If within half an hour of the time fixed for the first
meeting, no quorum is present, then the members entitled to vote who are present
shall form the quorum. Further, if after one hour, no member entitled to vote
turns up or all members present refuse to be members of the JMC, the meeting
cannot take place, and the developer must inform the Commissioner within the
next seven days of the ill-fated meeting.
The Commissioner may then appoint a new date for the first
meeting or appoint a managing agent to maintain the common property.
All resolutions at the first meeting shall be decided by a
show of hands. Joint purchasers (e.g. husband and wife) are not entitled to vote
except by a jointly appointed proxy. However there are no express provisions for
a purchaser who is a corporation, to appoint a proxy or a representative, to
attend the first meeting and to vote.
If the first meeting is successful, then within 28 days
thereafter the JMB must inform the Commissioner of the name of the JMB, and
register its name with the Commissioner.
Annual General Meeting (AGM)
The AGM of the JMB shall be held once a year and not more
than 15 months shall elapse between date of one AGM and the next AGM. The agenda
is to consider the BMF and transact such other businesses as may arise.
Extraordinary General Meeting (EGM)
An EGM may be convened by the JMB, upon requisition in
writing made by persons who are registered as purchasers of at least one-quarter
of the total number of parcels, or when the JMB receives a direction from the
Commissioner to transact a particular business, or on such other occasion as the
JMB thinks fit.
The Commissioner may himself, authorise any purchaser to
convene an EGM if he is satisfied that the JMB was not properly constituted.
It is pertinent to note that although the Act made provisions
for rules to regulate the first meeting of the JMB, there are no provisions on
how an AGM or EGM is to be conducted and it is not clear whether the rules on
quorum and voting rights for the first meeting of the JMB will apply to an AGM
or EGM. Perhaps such rules and other rules to clear up the uncertainties
mentioned above will be contained in the Regulations or perhaps the Regulations
will empower the JMB to regulate its meetings as they deem fit and proper.
Joint Management Committee (JMC)
The duties and powers of the JMB are to be performed and
exercised by a JMC, which shall be elected by the JMB at its first meeting, and
thereafter at the annual general meeting.
The JMC shall consist of the developer and not less than five
and not more than 12 purchasers. A purchaser who is elected to the JMC can only
hold office for a period not exceeding three years or until the dissolution of
the JMB when the MC comes into existence.
A chairman, a secretary and a treasurer shall be elected from
members of the JMC. Since the developer is a member of the JMC, its
representative can be elected to any of the above three positions.
Proceedings of the JMC are regulated by the First Schedule of
the Act and it is pertinent to note that the developer has a vote in the JMC
even though the developer has no right to vote at the first meeting of the JMB.
A member elected shall continue to be a member of the JMC until he resigns,
dies, becomes a bankrupt or is no longer a purchaser. Once elected, a member of
the JMC is expected to devote as much time as is necessary to discharge his duty
In a forthcoming continuation of this article, the writer
will examine provisions in the Act relating to the Building Maintenance Account,
the Building Management Fund, the payment of maintenance charges, the managing
agent, and other features of the Act.
Click here for Part 2.
The writer is the Deputy Chairman of the Conveyancing
Practice Committee, Bar Council, Malaysia
Part 2 of this article will appear next week.
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