By Sharina Ahmad
RESIDENTS who live in high-rise dwellings are concerned about the charges for the maintenance fees and contribution to the sinking funds during the Movement Control Order (MCO).
Since Bank Negara Malaysia has announced a six-month deferment for all loan/financing repayments starting April, should a waiver or moratorium on maintenance charges be considered?
As it is, many owners of high-rise units are prohibited from using common facilities such as the swimming pool, gym, playground and park. This has raised questions on whether such charges should be waived or reduced during the MCO period.
According to Chee Hoe & Associates partner Lai Chee Hoe, if most of the common facilities are closed and/or services suspended during the MCO period and there are savings, such savings may be translated into a reduction of charges and sinking funds.
“On the contrary, if there are no savings made if a stratified development area suffers a loss of income from car park operations or hall rental, then a reduction may not be feasible.
“If we go through the Strata Management Act 2013 (SMA 2013), there is no express power granted to waive by the Act and in that circumstance, the JMB/MC does not have the power to grant a waiver to charges and contribution to sinking funds.
“In the same vein, since there is no power given by SMA 2013 to waive late payment interest (LPI) or to provide a discount, a JMB/MC cannot in law waive LPI or grant a discount to parcel owners/proprietors,” he said.
Under SMA 2013, the Joint Management Body (JMB) and Management Corporation (MC) are statutory bodies that are formed to manage and maintain the subdivided building and common property in a strata development.
Lai said if the objective is to relieve the burden of owners to pay the usual charges on a monthly basis, the closest powers a JMB/MC has is to reduce charges and contribution to the sinking funds, or enter into an instalment payment scheme with a defaulter to extend time for payment of charges.
Meanwhile, National House Buyers Association honorary secretary-general Datuk Chang Kim Loong pointed out that cash flow is the lifeline of strata buildings.
“If the majority of owners do not pay up due to the MCO or otherwise, the cash flow will be seriously affected to the extent that the building services, maintenance and facilities will come to a halt. If this is prolonged, the cost of rehabilitation will be very high,” he told FocusM.
Chang opined to not overlook the cash flow as there are many irresponsible owners, for their own selfish reasons, who will take advantage of the MCO lockdown to avoid the need to diligently pay maintenance charges and sinking fund contributions.
“Paying maintenance charges and sinking funds is a necessity to keep the lifeline of strata living going. Otherwise, the community will be crippled.
“You need this basic necessity to be in place more during this MCO and beyond. Can you imagine that guards and cleaners don’t turn up for work?”
However, Chang suggested that the JMB/MC could consider an instalment plan, on a case to case basis.
“It can be done, but the indebtedness remains payable. Be mindful that its pool money that all stratified owners obligatorily must pay their shared contributions towards the common pool. Otherwise, all will be paralysed,” he said.
Malaysian Institute of Property & Facility Managers (MIPFM) president Adzman Shah Mohd Ariffin also opined that it is not advisable to waive or give a discount as a number of JMBs are short of funds due to the poor collection.
“Most people understand that residential strata buildings continue to operate as usual albeit with less headcount being on-site. Hence, the issue of the legal right to waive is very important to understand,” he told FocusM.
Adzman noted that there are also issues on fulfilling contractual obligations.
“A lot of JMBs/MCs are seeking to reduce expenses by requesting for less headcount on-site for security personnel, cleaners and even property management office staff, although site headcount is limited to two persons under the MCO; the rest should be working from home. This must be done on mutual agreement and not unilaterally, as it can result in complications later.
“Therefore, anything to do with such waiver or even discount will require approval in an annual general meeting or extraordinary general meeting,” he said. However, this decision can only ultimately be made by the Honourable Minister of Housing and thereafter, shall need to be gazetted under section 151 of Act 757,” he added.- April 17, 2020
