Jing Zhi Wong - Wong on Strata Title and Strata Management

Wong on Strata Title and Strata Management

Select topics on Strata Title and Strata Management in Malaysia and Singapore

Work-in-progress

[A] Malaysia

[A1] Joint Management Body/Management Corporation, By-Law making, issues, history of strata titles and strata management laws in Malaysia: see Jing Zhi Wong, ‘Towards Enforceable Standards, Rules and Rights in Strata Management: An Analysis’ (2019) 27(2) International Islamic University Malaysia Law Journal 397-446, and cases and literature cited therein.

[A1.1] Transplant of New South Wales' Conveyancing (Strata Titles) Act 1961 (NSW): John Denis de Silva v Crescent Court Management Corporation[2006] 1 MLRH 233, [10]; See also Zarina Tan Sri Jaafar & Ors v PerbadananPengurusan Ixora[2010] 1 MLRH 390.

[A1.2] Voting rights: see recent statement of the law in Tropicana Macalister Avenue (Penang) Sdn Bhd v Badan Pengurusan Bersama Tropicana 218 Macalister [2023] MLJU 1728.

[A2] AirBnB and Short Lets in Strata-title Buildings: see Jing Zhi Wong, 'A Critique of the Strata Management Act’s ‘Social Legislation’ Purpose Identified in Innab Salil v Verve Suites Mont’ Kiara [2020] 12 MLJ 16 (FC)' (2023) 31(1) International Islamic University Malaysia Law Journal 139, 141-143 and cases and literature cited within. See especially, Mohd Syahril Ibrahim and Azlina Mohd Hussian, 'Pemakaian Undang-undang Terhadap Perkhidmatan Penginapan Kediaman Jangka Pendek di Malaysia' (2021) 6(25) International Journal of Law, Government and Communication 85; Rozlinda Abdullah et al, 'Legal Issues Relating to the Relationship Between the Landlord and Tenant in Malaysia' (2023) 8(1) Malaysian Journal of Social Sciences and Humanities 1; Nor Asiah Mohamad, 'Saying ‘Yes’ or ‘No’ to Short-Term Holiday Letting in Stratified Properties in Malaysia' (2020) 21(S1) International Journal of Business and Society 137.

[A2.1] Permanent injunction on short term rentals granted in Marc Service Residence Management Corporation v Wawasan Raya (M) Sdn Bhd & Ors [2023] MLJU 1384 (Akhtar Tahir J). This case makes mentions of "a host of legislation", but does not specify. The basis for its decision does not appear to be readily apparent. "[46]Apart from the laws relating to strata titles there are a host of legislation which regulates premises used for residential purposes and commercial purposes. Therefore facilities necessary for residential purposes might be different from those available for commercial purposes. [47]In this case the Court rules that the Residence is a purely a private residential accommodation and the apartments in the Residence cannot be utilized as a hotel or a motel or for any such commercial purpose and also cannot be advertised as such."

[A3] Strata Management Act 2013:

[A3.1] Judicially Recognised Social Legislation: Innab Salil & Ors v Verve Suites Mont’ Kiara Management Corporation [2020] 12 MLJ 16 (FC), 28-29 [26]. For further discussion, see Joshua Wu Kai-Ming, “Judicially Recognised Social Legislation” (Joshua Wu, Blog, 6 January 2022) <https://joshuawu.my/judicially-recognised-social-legislation/> archived at <https://perma.cc/N6FN-3C32>.

[A3.2] Critique of its status as judicially recognised social legislation: see Jing Zhi Wong, 'A Critique of the Strata Management Act’s ‘Social Legislation’ Purpose Identified in Innab Salil v Verve Suites Mont’ Kiara [2020] 12 MLJ 16 (FC)' (2023) 31(1) International Islamic University Malaysia Law Journal 139-168.

[A3.3] Critique: watering-down of rights and duties enumerated on text of the Act through purposive statutory interpretation:

[A3.3.1] Palazzo Empire Sdn Bhd v Tiow Weng Theong [2020] MLJU 1884, [22]-[23] (Tee Geok Hock JC): "[23] Our Federal Court in the recent judgment Innab Salil & 3 Ors v. Verve Suites Mont Kiara Management Corporation in Civil Appeal No. 02(i)- 74-10/2019 (w) delivered by Tengku Maimun CJ held as follows regarding Strata Management Act 2013: ‘[26] The SMA 2013 is without doubt, a social legislation. It was passed to facilitate the affairs of strata living for the good of the community or owners of the strata title. Being social in nature, the provisions of the SMA 2013 which safeguard community interests ought to receive a liberal interpretation and not a restricted or rigid one. Accordingly, where two different interpretations are possible, it is the one which favours the interest of the community over the interest of the individual that is to be preferred. This is in line with the aforementioned decisions in Ang Ming Lee and Hoh Kiang Ngan.” [24] In my considered view, the provisions of Strata Management Act 2013 cannot be stretched in their interpretation to impose upon the ordinary laymen who administer the joint management body the onerous burden of assessing or recognizing claims for beneficial ownership or trust ownership which entail legal complexities and likely tremendous financial burden on legal fees and expenses. If that were the case, the joint management body would be inflicted with the woes of having to spend much of their limited finance (often difficult to achieve full or high percentage of collection from all parcel owners) on solicitors’ fees instead of utilizing the limited finance to maintain and manage the common properties and common facilities in the strata development for serving the wellbeing and the interest of the strata community. An interpretation which promotes the preservation of the joint management body’s limited finance and avoids the onerous and expensive burden of being inflicted with woes of litigations over the identities of the parcel owners with whom they should relate and transact would be an interpretation which favours the interest of the community over that of the individual in the context of our present case."

[A3.3.2] Perbadanan Pengurusan 3 Two Square v 3 Two Square Sdn Bhd [2017] MLJU 2258, [50]: … Perbadanan Pengurusan Endah Parade v Magnificent Diagraph Sdn. Bhd. [2014] 5 CLJ 881: “The High Court Judge was correct in his decision that the STA merely allows the levying of one payment or contribution from unit holders approved at a general meeting. The conclusion reached by the High Court accorded with the wording of the Act, and the presumed collective intention and wisdom of Parliament. The management corporation established is by statute deemed to be a body corporate with perpetual succession and a common seal. The council constitutes the executive body of the management corporation here, and the council is subject to restrictions or directions of the general meeting. (paras 26, 27 & 29) … We have been referred to the High Court decision in Lai King Lung v. Perbadanan Pengurusan Anjung Hijau & Anor [2012] 1 CLJ 1013, which in turn quotes the Singapore High Court decision in Ezio Paganetto v. The Management Corporation Strata Title No 1075 [1988] 1 LNS 141;; [1988] 1 SLR 268, and the general principle that a management corporation should be allowed to act reasonably without undue insistence on the existence of specific by-laws to cover every practical difficulty. We agree such an approach will be unreasonable and, to quote counsel for the appellant, “at most... highly technical and at its lowest... pedantic”. Nevertheless, the issue of proper authority to impose a levy is too important to be left to the management corporation or the council to decide as a matter of discretion. It is not quite a matter such as deciding which contractor should mow the lawn."

[B] Singapore

[B1] Management Corporation:

[B1.1] Responsibilities and Powers:

[B1.1.1] Scope: A management corporation constituted in respect of a strata title plan shall have the powers, duties and functions conferred or imposed on it by or under the BMSMA, or by the by-laws in respect of the parcel comprised in that strata title plan and, subject to the BMSMA, shall have the control, management and administration of the common property comprised in that strata title plan: Building Maintenance and Strata Management Act 2004 (Cap 30C) (BMSMA) s 24(3).

[B1.1.2] Specific Duties: the management corporation has a specific duty to, inter alia:

i. to properly maintain and keep in a state of good and serviceable repair (including, where reasonably necessary, renew or replace the whole or part thereof) the common property: BMSMA s 29(1)(b)(i).

ii. to comply with any notice or order made by any relevant authority or public authority requiring the abatement of any nuisance on the common property or ordering repairs or other work to be done in respect of the subdivided building or common property: BMSMA s 29(1)(e).

iii. to control, manage and administer the common property for the benefit of all the subsidiary proprietors constituting the management corporation: BMSMA s 29(1).

[B1.1.3] Administrative Functions and Duties: The management corporation may do all things reasonably necessary for the performance of its duties for the enforcement of the by-laws: BMSMA s 29(2)(b). [Note: the BMSMA stops short of making it an express duty for the management corporation to enforce the by-laws; but can argue that enforcing the by-laws is for the benefit of all owners to comply to one clear standard; a way around this is to argue that the exercise of a power or discretion must, at a minimum, comply with the BMSMA and the by-laws, since: BMSMA s 32(6): "the prescribed by-laws and any by-laws made under this section or section 33 for the time being in force shall bind the management corporation and the subsidiary proprietors and any mortgagee in possession (whether by himself or any other person), lessee or occupier of a lot to the same extent as if the by-laws — (a) had been signed and sealed by the management corporation, and each subsidiary proprietor and each such mortgagee, lessee and occupier, respectively; and (b) contained mutual covenants to observe, comply and perform all the provisions of the by-laws]"

[B1.1.4] Contracting with Proprietors: The management corporation may make agreement with a subsidiary proprietor as regards the provision of amenities or services, provided that it does not conflict with its duties in BMSMA ss 29(1) and (2): BMSMA s 29(2)(a)/(3)(a). This does not include permission to use the common property in a particular manner so as to permit obstruction of common property.

[B1.1.5] By-Laws: A management corporation may make by-laws for the purpose of controlling and managing the use or enjoyment of common property pursuant to a special resolution. (BMSMA s 32(2); Wu Chiu Lin v MCST Plan No 2874 [2018] SGHC 43, [41], [82]). This general power to make by-laws in s 32(2) as regards common property is subject to an additional requirement when a subsidiary proprietor is seeking to be conferred, by the making of a by-law, the exclusive use and enjoyment of, or special privileges in respect of, common property – a special resolution may not suffice. (BMSMA s 33(1); Wu Chiu Lin v MCST Plan No 2874 [2018] SGHC 43, [41]). However, these powers are subject to limitations. As stated by the High Court in MCST Plan No 901 v Lian Tat Huat Trading Pte Ltd [2018] SGHC 270, [30], referring to MCST Plan No 473 v De Beers Jewellery Pte Ltd [2002] 1 SLR(R) 418, [10]: ‘As a body corporate created under the BMSMA, the Management Corporation ‘can only have such powers that were expressly or impliedly granted under the BMSMA, and anything it did outside of these powers would have been void ab initio’.

]B1.1.5.1] Limits on By-Law Making: The by-laws prescribed by regulations (BM(SM)R 2005) shall be the by-laws for every parcel comprised in a strata title plan in respect of which a management corporation is constituted on or after 1st April 2005, and no by-law made under this section or section 33 shall be inconsistent with any such prescribed by-law: BMSMA s 32(2). A by-law cannot be made to authorize (and cannot remedy) the departure from or contravention of the prescribed by-laws reflected in the Second Schedule to the Regulations: Wu Chiu Lin v MCST Plan No 2874 [2018] SGHC 43, [83]. Corollary, a power of the management corporation cannot be exercised to depart from or contravene the prescribed by-laws reflected in the Second Schedule to the Regulations: mutual covenants to observe, comply and perform all the provisions of the by-laws: BMSMA s 32(6).

[B1.1.5.2] Second Schedule to the Regulations: Building Maintenance (Strata Management) Regulations 2005: Unlawful Obstruction of Common Property: Para 3(1) of the Prescribed By-Laws: “A subsidiary proprietor or an occupier of a lot shall not obstruct the lawful use of the common property by any person, except on a temporary and non-recurring basis.” The test: ‘Obstruct the lawful use’: in Wu Chiu Lin, Chan Seng Onn J gave the example of a subsidiary proprietor leaving a huge bucket of rotting fish next to the main entrance of a condominium development. Chan Seng Onn J stated that this ‘would be interfering unreasonably with the other subsidiary proprietors’ usage of the main entrance’: at [83]). Corollary, ‘obstruct the lawful use’ includes ‘unreasonably interferes with the usage or enjoyment of others entitled to similar use’ (see also [81]). Other obligations: eg, Code of Practice for Fire Precautions in Buildings 2018 cl 2.2.13(b)(4): “Smoke-free approach to exit staircase”: prescribe that ‘the floor area of a smoke-stop lobby shall be at least 3m² and with minimum clear width of 1.2m. If a smoke-stop lobby also serves as a fire lift lobby, the floor area shall be not smaller than 6m² and with minimum clear width of 2m’.