by Datuk Chan Kim Loong

A strata title is one of the title structures of ownership and control over property. It is usually applied to subdivided buildings or complexes such as high-rise buildings, town houses, duplexes, flats, apartments, condominiums and commercial buildings.

This form of title gives individuals ownership over the units they occupy while the land and common property are controlled by the Management Corporation (MC).

The structure of strata titles designates the MC as the owner of the land, which enables parcel owners to have more control over the spaces they occupy. The MC is also responsible for matters involving legal obligations in its dealings.

For the owners, the MC generally takes responsibility for maintenance of the common area, insurance and/or as an informal mediator among residents.

Unfortunately, many residents and owners in Malaysia have not reached the stage where the MC can be formed because of delays in obtaining strata titles. In fact, it is not uncommon that many buyers of this type of property are not even aware of the need for strata titles.

Why are strata titles important?

The National House Buyers Association (HBA) strongly advises house buyers to get, keep and preserve the strata titles to their residential units for the following reasons:

• As ultimate proof of your property ownership. For example, when you say you own a car, you have the registration card to prove it and there is no need for you to get the consent of the carmaker when you need to refinance or sell the car.
• As a dealing instrument for instances of charging to banks for loans.
• You need not obtain the consent of the developer, land proprietor or liquidators who may impose administrative charges of between 1% to 3% as their “consent fees or verification charges” or by whatever name they call it, if and when you should decide to sell your property.
• To form a MC by owners of the subdivided building to maintain and manage the building and to have their own bylaws, usage or restrictions. In the interim period, a Joint Management Body (JMB) do have a say in the way the building is managed or maintained and control over the monies collected for maintenance charges, sinking funds, etc.
• As the final proof of the built-up area of your unit and ultimately your apportionment of the share in the total aggregate units.
• As long as the strata titles have not been transferred, the land and the common property are still owned by the developer. Should the developer company go under liquidation or become insolvent before strata titles have been obtained, the unit owners will have to go through a lot of trouble or might eventually have to pay for the application of the strata titles themselves.

Are we moving towards the right direction?

The Strata Titles Act 1985 (STA) has been amended a few times since its enactment. By now the Act has existed for nearly 35 years. As strata housing schemes have become more common, the basis of the strata title arrangement have been well tested.

It has become clearer that there are specific problems that need to be addressed in many areas.

HBA is of the opinion that we will not be well served by the recent amendments to the Act. We note the recent amendments have been purportedly to streamline the existing Act as well as to serve as a deterrent to developers who have deliberately flouted the law by taking advantage of unsuspecting house buyers. Only time will tell the effectiveness of the amendments.

On the other hand, HBA is of the opinion that it would be best to start a new Enactment that is far-sighted to reform the entire laws governing stratified properties instead of a short-sighted and unsatisfactory “piece-meal” approach that merely makes cosmetic changes in bits and pieces as and when a situation arises like a patch-work job. Reforms are necessary as this concerns the people’s ownership of their own homes.

Whose responsibility in enforcement?

Strata schemes are meant for owners to take charge of the maintenance and management of the common properties. That being so, due care should be given to expedite the transfer of titles to owners for them to start learning the process.

Relevant authorities should help to give detailed guidelines on the process from before transition from developer, during transition, to the actual running of the MC.

Pursuant to Section 8 of the STA, developers are required by law to apply for the titles within six months from the date of the issuance of certificate of fitness by the local council or such other compulsory circumstances as facilitated in the same Section of this Act.

Under Clause 10 of the then sale and purchase agreement (Schedule H), developers are statutorily bound to apply for strata titles “expediently” at their own cost and expenses. How often has this been dealt with efficiently by developers?

We read of warnings from all sources of charging developers in court for not applying for the strata titles, but in reality and honestly speaking, how many developers have been charged for breaching this provision of the STA?

We can think of various reasons developers do not see the urgency in applying for strata titles, two of which are:

1. Enforcement is slacking, and threats of legal actions have so far been all bark but no bite;
2. Unless purchasers make a complaint, nobody would know that strata titles have not been applied or transferred to owners.

A check with the Ministry of Energy and Natural Resources, which administers the STA, reveals that unless an owner makes a complaint on the strata title issue, no action will be taken.

We are taken aback that there is no system to monitor the compliance of strata title applications. The onus, it seems, is on strata property owners to do the checking. On the same issue, no one knows exactly how many strata property owners are still waiting for their titles.

Closing the floodgates

HBA has made several suggestions to “close the floodgate” of housing developers refusing/ neglecting/failing to apply for strata titles and it has now become law. In our next article, we will write on the safety measures and “casting the nets wide” enough to circumvent the issues of non-application of strata titles.

These suggestions would give more protection to purchasers and a push to developers to expediently transfer the titles to their unit owners.

Datuk Chang Kim Loong is the Hon. Secretary-General of the National House Buyers Association (HBA). 
HBA can be contacted at:
Email: info@hba.og.my
Website: www.hba.org.my 
Tel: +6012 334 5676

Source: EdgeProp.my

File picture

Although many developers perceived the first half of the year as unfavourable, their views have slightly changed for the better for the second half, according to Real Estate & Housing Developers’ Association (Rehda) Malaysia.

The somewhat renewed interest in the property industry stems predominantly from the declining daily Covid-19 numbers and the rollout of Covid-19 National Immunisation Programme which is expected to spur consumer sentiment and economic growth, said Rehda Malaysia president Datuk Soam Heng Choon.

According to Rehda’s “Property industry survey 2H2020 and market outlook (1H2021 and 2H2021)”, over 40% of the respondents are pessimistic against the domestic economic environment (50%), organisation’s business prospect (41%) and consumer’s purchasing power (46%) in the first half of 2021.

However, the percentage of respondents who are pessimistic towards 2H2021 have reduced significantly.

Following the near completion of 3 Residence condominium at Sungai Pinang, Jelutong Development Sdn. Bhd. (a subsidiary of IJM Land) has recently proposed yet another commercial property development in the same vicinity. It will be located right next to 3 Residence, opposite Wesley Methodist International School. Only a short walking distance to the seafront promenade of Karpal Singh Drive.

The proposed development will consist of two 20-storey and 40-storey office towers with 8 levels of car parking podium. The 40-storey tower will feature 298 units of office suites, whereas the details of the 20-storey tower are yet to be known.

This project is still pending approval. More details to be available upon official launch.

Project Name : (to be confirmed)
Location : Sungai Pinang, George Town
Property Type : Commercial
Total Units: (to be confirmed)
Built-up Area: (to be confirmed)
Indicative Price: (to be confirmed)
Developer : Jelutong Development Sdn. Bhd. (IJM Land)

Location Map:

DISCLAIMER: This article is solely based on research done using publicly available data. This is not an advertisement. Any claim, statistic, quote or other representation about a project or service should be verified with the developer, provider or party in question.

File picture

The number of unsold properties has seen a respite amid the government’s Home Ownership Campaign (HOC) except for the commercial market, which remains worrisome amid the new norms, Bank Negara Malaysia (BNM) Governor Datuk Nor Shamsiah Mohd Yunus said.

“The amount of unsold properties is still very high. It is about 170,000 units but it has been coming down but the level is still very high. The HOC that the government has introduced last year has helped clear some of these unsold units.

“But in terms of unsold properties, we are worried about commercial properties because even before the pandemic we had a very high supply office space and shopping complex.

“With the pandemic and greater online sales, more work from home arrangements, the need for office space and physical premises will come down and the demand will not be as high as before,” she told an editors’ briefing session on Tuesday.

So, in terms of unsold properties, BNM is much more worried of the unsold commercial space because the excess capacity in the market would be made much worse under the new normal. “Luckily, the bank’s exposure to this segment is very small. It accounts to 3.2 per cent of the total loans,” she said.

Nevertheless, the central bank said in its Financial Stability Review Second Half of 2020 that the softer housing market conditions prompted developers to adjust supply towards more affordable housing segments.

“While overall launches declined significantly across all price segments in the first three quarters of 2020 (24,853 units; 1Q-3Q 2019: 60,955), the decline has been notably sharper for properties priced above RM500,000.

“As a result, the share of newly- launched properties in this segment fell to 20.5 per cent of overall new launches (1Q-3Q 2019: 31.8 per cent). This is a welcomed adjustment and will help reduce demand-supply mismatches that had worsened housing affordability and increased risks of price corrections in the past,” it said.

It added that the low interest rate environment also encouraged purchases for both own occupancy and investment purposes.

Demand for financing correspondingly rose in line with market activity, with housing loan application growth picking up across most price segments except for houses priced below RM300,000.

Risks to banks, however, remain well-contained, with the current impairment ratio and share of borrowers in negative equity for household investors at only 0.9 per cent and 1.3 per cent, respectively.

The average loan-to-value ratio of outstanding housing loans remained below 60 per cent, substantially mitigating the risk of more borrowers falling into negative equity, as well as limiting the potential losses to banks.

Source: Bernama

Don’t miss your chance to meet GEM Residences at Queensbay Mall and grab shopping vouchers worth RM200 from All Season’s Place upon signing of SPA!

Date: 01 – 04 April 2021
Time: 10:30am – 10:30pm
Venue: Lower Ground, in front of Dave’s Deli