By Datuk Chang Kim Loong
IT starts with whether one is genuinely passionate to volunteer one’s’ time to serve for the wellbeing of his community in the Joint Management Committee (JMC) or Management Committee (MC) under the Strata Management Act, 2013 (SMA) or one has a personal agenda to take advantage of his position to help himself with jobs, status, information and gains to enrich himself or herself.
‘There is this estate agent lady, who is in the JMC, and she seems to have all the information of the owners (names, addresses and contact numbers). She periodically contacts me and my neighbours whether we wish to sell our condominium units as she always claims that a certain investor or investors of hers wish to offer a “high price”. How did she obtain our information and contact numbers?’
‘You have diligently paid your instalments to your bank for the last 10 years and the quantum of debt has been significantly reduced. Then one day you receive a call from a financial planner, who is in the MC, and he asks “Do you wish to refinance your property for another loan? As a financial planner, I can arrange it with the banks. You could use the money to buy another property’.
‘I can do a better job to run the management and maintenance of our own apartment building. My team, although unlicensed, can also do property management by making the meagre deposit (refundable) as bond to the JMB or MC. Trust me that I will not deplete your entire sinking fund and abuse my position’.
‘During the AGM, this big time contractor-cum-investor is very vocal in asking the “right questions” as many parcel owners are not familiar with SMA legislation. Consequently, he is made the Chairman of the JMC. He always seems to have his own friendly suppliers, contractors, service providers, insurance brokers and even Airbnb operators for everything in the management and maintenance of the common property. In fact, he has pecuniary interest in everything he does.’
The above scenarios, especially 1 & 2 are quite often heard when personal information are divulged to others and people profit from the sale of the personal information.
Personal Data Protection Act, 2010
In Malaysia, we have the Personal Data Protection Act, 2010 (PDPA). It is aimed at preventing abuse of personal data for commercial purposes and has been implemented since Nov 11, 2013. The Act would play a crucial role in safeguarding the interests of individuals and made it illegal for corporate entities and individuals to disclose, sell personal information or allow the use of data by third parties. The penalty for non-compliance is between RM100,000 to RM500,000 and/or between one to two years imprisonment on conviction.
A member of the executive committee, namely the JMC or the MC, is required to have a high standard of integrity. The SMA provides a comprehensive list of conditions that must be followed to be eligible for election and to be a committee member.
First, to be eligible for election as a committee member, the parcel owner must be at least 21 years old and have fully paid his maintenance charges and sinking fund at least seven days before the AGM. It is to be noted that a proxy is not eligible for election as a committee member.
Second, while a parcel owner is a committee member, he must observe the following conditions:-
- He is not a bankrupt;
- He is still a parcel owner;
- He is not convicted for an offence of fraud or dishonesty;
- His conduct must not bring discredit on the JMC/ MC;
- He must be of sound mind;
- If he is the chairman, he must not absent himself from three consecutive committee meetings without the leave of the committee;
- If he is not the chairman, he must not absent himself from three consecutive committee meetings without the leave of the chairman;
- He must not be in arrears of the maintenance charge and sinking fund (including interests) for three consecutive months;
- Representative is not removed by his body corporate owner;
- If he commits a serious breach of the by-laws, he must remedy the breach within 14 days of the notice from the committee;
- He is not convicted for an offence of moral turpitude.
The Wikipedia definition of ‘moral turpitude”, in the legal context, as ‘an act or behavior that gravely violates the sentiment or acceptable standard of the community’. It has also been described as an ‘act of baseness, vileness or depravity in the private and social duties which a man owes to his fellowmen or to society in general, contrary to the accepted and customary rule of rights and duty between man and man.
It simply means a criminal act that is contrary to community standards of justice, honesty or good morals.
If the parcel owner fails to observe the above conditions, he is deemed to have vacated his office as a committee member. A committee member may resign from his office at any time by giving written notice to the committee. Consequently, the general body, JMB/ MC, may elect another owner, who is eligible to vote, at an extraordinary meeting (EGM) to replace the member and to hold the office for the remaining term; or to leave the position vacant until the election of the JMC or MC, as the case may be, at the next annual general meeting (AGM).
In the SMA, the JMC or MC should comprise a minimum of three persons and a maximum of 14 persons who are owners eligible to vote. There shall be a chairman, secretary and treasurer, all of whom shall be natural persons.
Although these are voluntary positions, they have to be taken seriously because they involve people’s wellbeing and their investments. Most owners’ corporations are headed by a leader who might also be the chairman at meetings. Strong and principled leadership is an essential component of every successful JMC or MC. Very often, those who speak the loudest at meetings are elected but that may not be sufficient for the long term.
Be wary of those self-serving candidates
Newcomers frequently make good volunteers but sometime are detracted by insisting on covering old topics. How much interest has the candidate (during AGM election) shown in the community and its undertakings? Did he suddenly appear to be interested? Have there been regular meet-ups, participation in activities? If not, investigate the sudden interest.
Be particularly careful about the ‘one-issue’ candidates who volunteer because they want to ‘take-over’ property management, as in our Scenario 3 above. Be particularly cautious of those ‘unlicensed property companies/ property managers’ that have managed to infiltrate committee members in the JMC and MC, if they are not themselves in the committee.
They may paint a glossy picture of what they can do through their “years of experience” or their so called “knowledge of the SMA”. But do they have the professional qualifications, management and technical experience and passed the stringent test of professional competency? Are they registered with the legislated Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP) (www.lppeh.gov.my) which is the sole statutory regulatory Board governing property managers that issues licenses to those registered ones in Malaysia under Act 242?
A candidate should not have conflicting personal and professional commitments. For example, the unethical estate agent and the overzealous financial planner, as in Scenario 1 & 2 above, may have particular interest in “serving” the JMC or MC to obtain private information and details of owners so that they may gain advantage and priority (with their fellow owners) for their listings purposes (sale, purchase, financing and rent). This clearly contravenes the PDPA legislation and the aggrieved party may lodge an official complaint to the Communications & Multimedia Ministry (www.kkmm.gov.my) for an investigation.
Person(s) having pecuniary interest
“Pecuniary interest” is an interest that a person has in a matter because of a reasonable likelihood or expectation of appreciable financial gain to the person or through another person with whom the person is associated. Therefore, it is best that any person or owner, who has pecuniary interest or vested interest in the management and maintenance of his stratified building, should recuse himself from seeking election to the JMC or the MC.
In any decision making process of a subject matter by the committee, a member of the committee who has direct or indirect pecuniary interest or vested interest in the subject matter should declare his interest therein and immediately recuse himself from the decision making process of the committee on the subject matter. Although this is not provided in the SMA or Strata Management Regulations, it is the fiduciary duty and responsibility of any committee member for good self-governance.
There is, however, Section 87 in the SMA that prohibits appointment of a managing agent having professional or pecuniary interest. Section 87 is reproduced below for clearer understanding on the issue of having vested interest in the issue of management and maintenance of the stratified buildings.
(1) A person shall not be appointed as a managing agent if he has a professional or pecuniary interest in any building or land intended for subdivision into parcels or any subdivided building or land.
(2) A person is regarded as having a professional or pecuniary interest in any building or land intended for subdivision into parcels or any subdivided building or land if –
(a) he has been responsible for the design or construction of the building;
(b) he or any of his nominees, officers or employees has any material interest in the building or land intended for subdivision into parcels or any part of the building or land;
(c) he is a partner or is in the employment of a person who has any material interest in the building or land intended for subdivision into parcels or any part of the building or land; or
(d) he or his family holds any interest in the building or land intended for subdivision into parcels or any part of the building or land whether directly or as a trustee or otherwise. – Jan 17, 2021
Datuk Chang Kim Loong is the honorary secretary-general of the National House Buyers Association.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.