Recovery Of Sums Due To Joint Management Body, Management Corporation

Joint Management Body (JMB) and Management Corporation (MC) are legal entities that are established under Section 17 of the Strata Management Act 2013 (SMA), and Section 39 of the Strata Titles Act 1985 (STA), respectively. Both entities have the duty to properly maintain and manage the building or land intended for subdivision into parcels and the common property and keep it in a state of good and serviceable repair, as provided under Section 21(1)(a) and 59(1)(a), respectively.

Incidentally, the purchaser, parcel owner and proprietor of a strata property are required to pay for charges, sinking funds, etc. for the maintenance and management of the building, pursuant to the provisions of the Strata Management Act 2013 including Section 12(1), 25(1), 52(1) and 68(1).

Although the SMA provisions imposed such obligations, there is still the possibility of default on payment which arises if the purchaser, owner or proprietor fails to pay within 14 days upon the receipt of the notice for such payment. Hence, SMA provides several measures that a JMB and MC can take to recover the sums due to them.

The rights to recover the sums due is protected under Sections 33(1) and 77(1) of SMA which provide among others, the payment of any amount of money lawfully incurred by the JMB or MC in the course of its powers or functions or duties, shall be guaranteed by the parcel owners or the proprietor.

Section 34(1) and 78(1) of SMA further provide the procedure for the recovery. According to these provisions, the developer, the JMB or the MC may serve a written notice demanding the payment of the sums due within a period which shall not be less than 14 days from the date of the service of the notice. If the sum remains unpaid at the end of the notice, Section 34(2) & Section 78(2) provides an option for the developer, the JMB or the MC to file a summons or claim in a court of competent jurisdiction or the Tribunal for the recovery of the said sum.

Alternatively, Sections 35 and 79 of SMA provide a measure of recovery where the developer, JMB or MC may make a sworn application in writing for the Commissioner of Building, which is responsible for carrying out the enforcement of the SMA provisions, to issue a warrant of attachment which authorize the seizing of property of any movable property belonging to the defaulting parcel owner which may be found in the building or elsewhere in the State.

It is worth noting that the failure to settle the payment as per the notice of demand from the developer, JMB or MC, constitutes an offence. This is provided in Section 34(3) and 78(3), where it provides, among others, any purchaser, parcel owner, or proprietor who without reasonable excuse, fails to comply with the notice relating to recovery of sums due to the developer, JMB or MC, commits an offence if found liable, may be fine up to RM5,000.00 or imprison up to 3 years or both. In case of a continuing offence, the offender is liable for a further fine not exceeding RM50 for every day or part thereof during which the continues after conviction.

In short, proper maintenance and management of a strata property is important to ensure the good condition of the building, and for such purposes, maintenance charges and other payments are needed for that purpose. Failure to do so may give rise to civil liability that may result in further loss for the purchaser, owner and proprietor and even criminal liability.

Muhammad Aiman Anuar is an Associate at Halim Hong & Quek specialising in Real Estate and Banking & Finance.

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