News: Flat Rate For Maintenance Fees At Mixed-use Projects “Highly Inequitable”

Oct 17, 2019

A recent ruling by the Court of Appeal, which provides that property owners in mixed-use projects without strata titles will have to pay a flat rate for maintenance charges, has caused confusion among various parties.

In fact, Malaysian Institute of Property and Facility Managers (MIPFM) president Adzman Shah Mohd Ariffin expects the court decision to create issues between joint management bodies (JMBs), developers, management corporations (MCs) and owners.

Wong Kok Soo of the National House Buyers Association (HBA), for instance, believed that “one uniform rate of maintenance charges will not be applied equally to all the different types of mixed-use strata developments”.

Read here: A simple guide to sinking fund and maintenance fees. 

“One size does not fit all,” he said.

Citing the example of a project with serviced apartments, offices and a mall on the same commercial land title, Adzman noted that a flat rate would be “highly inequitable” and would cause disharmony for all three parties, reported The Star.

“The office and mall people would demand to use the swimming pool and gym, while the serviced apartment dwellers will not want to pay a higher rate,” he said.

Strata management-related matters are governed by The Strata Management Act 2013 (Act 757) as well as the Strata Management Regulations 2015.

“Unfortunately, Act 757 did not foresee the evolution of property development, which has increasingly involved more components with exclusive facilities and amenities being constructed on the same land title for different components,” said Adzman.

Some of the more recent developments features several components, such as hotels, serviced apartments, malls, offices, retail shops as well as educational and hospital facilities.

Another related issue is Section 60 (3) (b) of Act 757, which allows MCs to determine varying rates but is silent on JMBs.

With this, MIPFM called on Housing and Local Government Minister Zuraida Kamaruddin to provide an amicable solution, which could involve the amendment of Act 757 to make Section 30 (3) (b) consistent for both JMBs and MCs.

 

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TF Lee
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GS Realty Sdn. Bhd.
tflee789@gmail.com
(+60) 16-3206950