Service charges under strata title property in Malaysia

Criminalising non-payment of service charge under the Strata Management Tribunal

A recent conversation with a relative on urban living raised a couple of interesting issues. One led to suggest that many high-rise buildings in Malaysia were fast becoming urban slums, of which I agreed, having noticed that although Malaysians have started living in stratified development properties, they express the devil-may-care attitude and expect “free lunch”. Clearly, there is a huge need for a paradigm shift in responsibilities with regard to community living.

This so-called freedom of not paying of service charges will come to an end with the establishment of the Strata Management Tribunal (SM Tribunal). It states that any parcel owner or tenant who fails to pay service charges, can be brought before the SM Tribunal with the implementation of the Strata Management Act 2013, Strata Management (Maintenance & Management) Regulations 2015 (June 2, 2015) and Strata Management (Strata Management Tribunal) Regulations 2015 (July 1, 2015). It is interesting to note that limitation is not applicable to the SM Tribunal and the maximum that can be claimed is RM250,000 per claim. Any non-compliance of an award (decision) of the SM Tribunal is now a criminal offence.

THE TRIBUNAL

“Any person who fails to comply with an award made by the Tribunal commits an offence and shall, on conviction, be liable to a fine, not exceeding RM250,000 or to imprisonment for a term not exceeding three years, or both, in the case of a continuing offence, to a further fine not exceeding RM5,000 for every day or part thereof during which the offence continues after conviction.” (Section 123)

The Tribunal shall consist of the following members who shall be appointed by the Minister:

 (a) a Chairman and a Deputy Chairman to be appointed from among the members of the Judicial and Legal Service; and 

(b) not less than 20 other members

to be appointed from among: 

(i) the persons who are members of or who have held office in the Judicial and Legal Service; or 

(ii) the persons who are admitted as advocates and solicitors under the Legal Profession Act 1976 [Act 166], the Advocates Ordinance of Sabah [Sabah Cap. 2] or the Advocates Ordinance of Sarawak [Sarawak Cap. 110], and who has no less than seven years’ standing, each appointed for a period of three years.

JURISDICTION OF TRIBUNAL

The Tribunal shall have the jurisdiction to hear and determine any claims where the total amount in respect of which an award of the Tribunal is sought, does not exceed RM250,000 or such other amount, as may be prescribed to substitute the total amount. 

Claim can be filed in relation to the following:

1. A dispute or complaint concerning an excercise or the performance of, or the failure to exercise or perform, a function, duty, or power conferred or imposed by Strata Management Act 2013 or the by-laws;

2. A dispute cost costs or repairs in respect of a defect in a parcel, building or landed intended for subdivision into parcels, or subdivided building or land, and its common property or limited common property;

3. A claim for the recovery of charges, or contribution to the sinking fund, or any amount which is declared by the provisions of this Act as a debt;

4. A claim for an order to convene a general meeting;

5. A claim for an order to invalidate proceedings of meeting where any provision of the Act has been contravened; 

6. A claim for an order to nullify a resolution where voting rights has been denied or where due notice has not been given;

7. A claim for an order to nullify a resolution passed at a general meeting;

8. A claim for an order to revoke amendment of by-laws having regard to the interests of all the parcel owners or proprietors;

9. A claim for an order to vary the rate of interest fixed by the joint management body, management corporation or subsidiary management corporation for late payment of charges, or contribution to the sinking fund; 

10. A claim for an order to vary the amount of insurance to be provided; 

11. A claim for an order to pursue an insurance claim; 

12. A claim for compelling a developer, joint management body, management corporation or subsidiary management corporation to supply information or documents; 

13. A claim for an order to give consent to effect alterations to any common property or limited common property; or 

14. A claim for an order to affirm, vary or revoke the Commissioner of Building’s decision.

The Orders that the SM Tribunal can make are:

1. Pay a sum of money to another party. 

2. Order the  price or other consideration paid by a party to be refunded to that party.

3. Order the payment of compensation or damages for any loss or damage suffered by a party.

4. Order the rectification, setting aside or variation of a contract or additional by-laws, wholly or in part.

5. Order costs to or against any party to be paid.

6. Order interest to be paid on any sum or monetary award at a rate not exceeding eight per centum per annum.

7. Dismiss a claim which it considers to be frivolous or vesatious.

8. Any other order as it deems just and expedient.

9. Make such ancillary or consequential orders or relief as may be necessary to give effect to any order made by the Tribunal.

EXCLUSION OF JURISDICTION OF COURT

Where a claim is filed with the SM Tribunal and the claim is within the Tribunal’s jurisdiction, the issues in dispute in that claim, whether as shown in the initial claim or as emerging in the course of the hearing, shall not be the subject of proceedings between the same parties in any court unless:

(a) the proceedings before the court were commenced before the claim was filed with the Tribunal; or

(b) the claim before the Tribunal is withdrawn, abandoned or struck out.

This means that a claimant has to decide in advance as to which forum he has to file a case because having filed a case in the SM Tribunal means he cannot file the proceed in the same courts or vice versa.

PERSONS ENTITLED TO FILE A CLAIM

This is a free for all Tribunal with many claimants and they are: 

(a) a developer; 

(b) a purchaser; 

(c) a proprietor, including an

original proprietor; 

(d) a joint management body; 

(e) a management corporation; 

(f) a subsidiary management

corporation; 

(g) a managing agent; and 

(h) any other interested person, with the leave of the Tribunal. Filing procedure is inexpensive, pay only RM20 and simply fill in the required forms. These forms have not been uploaded yet on the KPKT web site but requests can be made by email.

RIGHT TO APPEAR AT HEARINGS

At the SM Tribunal, no party shall be represented by an advocate and solicitor at a hearing unless, in the opinion of the Tribunal, the matter in question involves complex issues of law and one party will suffer severe financial hardship if he is not represented by an advocate and solicitor. A corporation or unincorporated body of persons may be represented by a full-time paid employee of the corporation or body. The Tribunal may conduct the proceedings in such manner as it considers appropriate, necessary or expedient for the purpose of ascertaining the facts or law in order that it may determine a claim.

FAST DISPOSAL OF CASES

The SM Tribunal shall make its award without delay and, where practicable, within sixty days from the first day of the hearing before the Tribunal commences. In making an order under subsection (3), the Tribunal shall have regard to: 

(a) the relevant provisions of this

Act; or 

(b) the interest of all parcel owners or proprietors in the use and enjoyment of their parcels or the common property or limited common property. The award given are final and binding on all parties to the proceedings and are be deemed to be an order of a court and be enforced accordingly by any party to the proceedings. However, any person dissatisfied with the decision of the SM Tribunal can, apply to the High Court challenging the award in the proceedings on the ground of serious irregularity affecting the awards which means an irregularity of one or more of the kinds which the court considers has caused substantial injustice to the applicant. 

With the establishment of the SM Tribunal there is hope for better maintenance and management culture to spur our quest to become a developed nation and zero nonpayment issues.

By Datuk Pretam Singh, thesundaily.com

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Bitcoin CEO arrest leaves long trail of unanswered questions

Tokyo (AFP) - The arrest of MtGox boss Mark Karpeles has begun to shed light on the defunct Bitcoin exchange after hundreds of millions of dollars in virtual currency vanished from its digital vaults last year.

But as details of a lengthy investigation by Japanese police trickle out, at least one crucial question remains unanswered: where is the money?



On Friday authorities issued a fresh arrest warrant for Frenchman Karpeles over claims he stole several million dollars from clients, including about $48,000 allegedly spent on a luxury canopy bed.

Karpeles, 30, who has reportedly denied the allegations, was initially taken into custody earlier this month and has been held without formal charges for three weeks, as allowed under Japanese law.

A fresh warrant resets the clock on how long police can hold him and grill the self-described computer geek over Tokyo-based MtGox's missing Bitcoins.



So far, police have accused Karpeles of manipulating data and stealing sums that amount to just a fraction of the 850,000 coins -- worth around $480 million at the time, or $387 million at current exchange rates -- that disappeared last year.

MtGox, which once said it handled around 80 percent of global Bitcoin transactions, filed for bankruptcy protection soon after the cyber-money went missing, leaving a trail of angry investors calling for answers.

The company initially said there was a bug in the software underpinning Bitcoins that allowed hackers to pilfer them.

Karpeles later claimed he had found some 200,000 of the lost coins in a "cold wallet" -- a storage device, such as a memory stick, that is not connected to other computers.

But the whereabouts of the money and Karpeles' involvement appear far from solved. "If there were instances of mismanagement or fraud like this carried out by Mark Karpeles, then he should be held accountable," Bitcoin investor Kim Nilsson told AFP.

Mark Karpeles, head of the MtGox Bitcoin exchange, looks out of a police vehicle on his way to the p 

(But) if these charges against (him) don't adequately explain where all the Bitcoin ... money went, then there are still unresolved questions, quite possibly additional crimes and criminals, that must be investigated further."

 - Real or fake? -

Nilsson also questioned whether MtGox's Bitcoin deposits were even real in the first place.

"Did MtGox at any point actually hold the coins in question, or have there been faked deposit entries merely making it look that way?" he asked MtGox reportedly kept its own funds and clients' money in the same bank account.

In an interview with Japan's top-selling Yomiuri newspaper, Karpeles' mother said her "genius" son learned computer languages at age three and started making simple programmes of his own two years later.

Back in 2006, Karpeles -- who reportedly lived in an $11,000-a-month penthouse Tokyo apartment -- wrote on his blog that computer crime was "totally contrary to my ethical principles".

But four years later, a Paris court sentenced him in absentia to a year in prison for hacking. He had come to Japan to work for a web development company in 2009 and later got involved with the Bitcoin exchange. - Tangible object -

Investors have called on the firm's court-appointed administrators to publicise its data so that experts around the world can help analyse what happened at MtGox.

But the case presented a complex challenge to Japanese police, as financial watchdogs around the world struggle to work out how to regulate digital money.

Unlike traditional currencies backed by a government or central bank, Bitcoins are generated by complex chains of interactions among a huge network of computers around the planet.

"The Bitcoin case is really an embezzlement case, but embezzlement has to involve a 'tangible object,'" said Hisashi Sonoda, a criminal law professor at Japan's Konan University.

"Japanese criminal law treats digital currency as 'data,' not what we call 'tangible object' in a legal sense."

Backers say virtual currencies, which started to appear around 2009, allow for an efficient and anonymous way to store and transfer funds online.

But critics argue the lack of legal framework governing the currency, the opaque way it is traded and its volatility make it dangerous.

Following Karpeles' arrest, Tokyo vowed to boost digital-currency regulations.

Japan's penal code "is not really catching up with quickly changing business models", hampering authorities' investigation, Sonoda said.

"If there was a clause or a fresh law targeting digital currency, that would have been helpful for investigators."

 By Hiroshi Hiyama

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By-laws governing strata property in Malaysia, part 3

General prohibitions of a proprietor according to the Third Schedule of Strata Management Regulation 2015

A PROPRIETOR shall not use his strata parcel for any purposes, illegal or otherwise, which may be injurious to the reputation of the development area; use as fuel of any substance or material which may give rise to smoke or fumes or obnoxious smells or shall not use any substance which the management corporation in a general meeting shall decide; and throw or allow to fall, any refuse or rubbish of any description on the common property or any part thereof except in refuse bins maintained by him or in refuse chutes or in refuse bins in common refuse chambers provided in the building.

PROHIBITION OF NUISANCE
A proprietor shall not use language or behave in a manner likely to cause offence or embarrassment or nuisance to any other proprietor or to any person lawfully using the common property.

APPEARANCE, FAÇADE AND COLOUR OF EXTERIOR
A proprietor shall not change the appearance, colour code and façade to any part on the exterior of his parcel without the prior written approval of the management corporation and, where necessary, the approval of the appropriate authority.

PEST CONTROL
A proprietor shall take all necessary steps to prevent his parcel from infestation by termites, vermin, rodents, pests and insects provided that any netting installed shall first be approved by the management corporation.

KEEPING OF ANIMALS IN A RESIDENTIAL BUILDING
A proprietor shall not keep any particular animal in his strata parcel or on the common property thereof that may cause annoyance or nuisance to the other proprietors or which may be dangerous to the safety or health of the other proprietors or which contravenes any written law or rules and regulations of the relevant state or the local authority.

DRYING OF LAUNDRY
In a building used for residential or dwelling purposes, a proprietor shall not, except with the prior written approval of the management corporation, hang any washing, towel, bedding, clothing or other article on any part of his strata parcel in such a way as to protrude outside, other than at the areas designated for such purpose and leave them there only for a reasonable period.

IDENTIFICATION FOR SECURITY PURPOSES
The management corporation may require any person on the common property to identify himself for security purposes and any person who refuses to comply and who is not a proprietor to leave the common property or the development area immediately.

PROHIBITION OF OBSTRUCTION
All fire escape routes, including but not limited to, the stairways, landings and passageways in the building or the common property shall not be obstructed by the proprietor at any time and the management corporation may, without prior notice, remove or confiscate any property of a proprietor, including but not limited to, bicycles, potted plants, vases, furniture, trolleys, boxes,goods or objects of any kind whatsoever. The management corporation may put up a notice of any removed or confiscated property which may be claimed by the proprietor within fourteen days from date of the notice subject to payment to the management corporation of a charge not exceeding RM200. If a removed or confiscated property is not claimed at the expiry of the period of fourteen days, the management corporation may discard or dispose of such property as it deems fit without any liability to the proprietor.

GARDEN, LAWNS AND POTTED PLANTS
A proprietor shall not damage any lawn, trees, shrubs, plants or flowers in the common property.

ENCROACHMENT ON COMMON PROPERTY AND OTHER PARCELS
A proprietor shall not do anything to his strata parcel which may encroach on any part of the common property or any other strata parcels. A proprietor shall not mark, paint, put up posters or banners or notices, drive nails or screws, or fasten brackets or the like into, or otherwise damage or deface, any part of the common property except with the prior written approval of the management corporation. An approval given by the management corporation shall not authorise any addition(s) to the common property.

VEHICLES
Every vehicle shall be properly parked in the designated parking bay without causing any obstruction to any adjacent vehicle or the flow of traffic. An improperly parked vehicle may be towed away or wheel-clamped by the management corporation, at the vehicle owner’s cost without prior notice, and in such a case, the wheel clamp will only be removed after payment to the management corporation of a charge imposed by the management corporation which shall not exceed RM200, and with any towing cost and holding charge actually incurred by the management corporation.

SOLID WASTE DISPOSAL
A proprietor shall not cause any unsightly accumulation of dirt, garbage, rubbish or debris in his strata parcel and accessory parcel that is visible from the outside and affecting the appearance or façade of the building or common property.

RENOVATION WORKS AND REPAIRS
A proprietor shall not carry out any renovation works to his strata parcel without first obtaining a prior written approval from the management corporation and, where necessary, from the appropriate authority.

RESTRICTIONS IN RENOVATION WORKS
Unless prior approval in writing has been obtained from the appropriate authority and the management corporation, a proprietor shall not:
• construct another floor level to his strata parcel (e.g. to split the level of any portion of the existing floor in the strata parcel by adding platforms);
• relocate any external door or window of his strata parcel;
• remove or make changes to any building safety feature in his strata parcel and notwithstanding such approvals, the proprietor shall indemnify and keep indemnified the management corporation against any liability which may be incurred or suffered as a result of such removal;
• shift any plumbing and sewerage system in a strata parcel;
• change or upgrade the whole electrical system in a strata parcel; or
• illegally connect or tap electricity supply.

POWER OF THE MANAGEMENT CORPORATION 

Where the condition of any strata parcel(s) in the development area affects or is likely to affect the support or shelter provided by that parcel for another parcel in the same building or the common property, or causes or is likely to cause damage or destruction to another parcel or any property therein in the same building or the common property; and the proprietor of the parcel in that condition has neglected or refused within a reasonable time of two written notifications of at least fourteen days each from the management corporation to take such action as is necessary to have that condition rectified; the management corporation may, as agent for the proprietor of the parcel in that condition, take such actions and proceedings as are necessary to have that condition rectified and the management corporation may recover the cost and expense of such actions and proceedings from the proprietor of the parcel in that condition as a debt due to the management corporation.

CHANGES TO BY-LAWS 

A developer during the developer’s management period may make additional by-laws or make amendments to such additional bylaws, not inconsistent with the bylaws in the Third Schedule, with the approval of the Commissioner of Building.

A joint management body may, by a special resolution, make additional by-laws or make amendments to such additional bylaws, not inconsistent with the bylaws in the Third Schedule, for regulating the control, management, administration, use and enjoyment of the building or land intended for subdivision into parcels and the common property, including all or any of the following matters:
• safety and security measures; • details of any common property of which the use is restricted;
• the keeping of pets;
• parking; • floor coverings;
• refuse control;
• behaviour;
• architectural and landscaping guidelines to be observed by all strata parcel owners; and
• imposition of a fine, not exceeding RM200 against any parcel owner, occupant or invitee who is in breach of any of the by-laws.

Follow our article next week on The Strata Management Tribunal, highlighting criminalising nonpayment of service charges.

BY DATUK PRETAM SINGH DARSHAN SINGH, The Sun

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• By-laws governing strata property management in Malaysia, part 2 ... 

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