Pro Tem Strata Owners Association Malaysia: Flat rate for maintenance is fair

PETALING JAYA (Oct 26): The Pro Tem Strata Owners Association Malaysia today said a flat rate for maintenance fees in mixed developments is a better way to protect residential property owners’ interests.

Led by Datuk Theng Book, an advocate and solicitor of Messrs Ling & Theng Book, Pro Tem Strata Owners Association Malaysia therefore supports uniform rates for maintenance charges instead of varying rates for different parcel owners in mixed developments.

Pro Tem Strata Owners Association Malaysia represents small unit holders in strata developments

The association explained that under the Strata Management Act 2013 (Act 757), it is clearly stated that the calculation formula for different property types (such as apartments, offices and retail units) and the different common facilities have already been taken into consideration, such as air-conditioning, lifts and escalator facilities.

The first schedule [section 8] stipulates that different weightage factors are to be applied to different types of parcels, with the calculation also being based on the frequency of usage and general maintenance of the common property.

Therefore, under this calculation, apartments or Small Office Home Office parcel owners will be charged a lower rate than the parcel owners of hotel and retail units, said Theng at a media conference today.

Hence, the association argued that as the difference in upkeep costs of different parcels is already reflected in the computation of share units, setting a flat base rate of maintenance fee is fair to all parcel owners.

“The problem with allowing different rates of maintenance fee is that the annual general meeting is usually controlled by the large unit owners (mostly retail and hotel component owners), as very commonly, most of the small unit owners (mostly residential unit owners) are not able to show up in the meeting,” Theng revealed.

“As such, there could be the possibilities where unfair rates will be set for some mixed developments, such as KL Gateway and Summit USJ, to name a few,” he added.

For example, as stated in the Extraordinary General Meeting circular of Summit USJ, the retail parcel owners are required to pay RM3.36 per share unit (psu) every month, while the maintenance charges for hotel parcels are RM0.06 psu monthly.

Theng added that another example involves residents at KL Gateway where they have to pay a service charge of RM 2.689 psu per month, while the service charge for KL Gateway Mall is RM 0.21 psu per month.

The Pro Tem Strata Owners Association Malaysia also urged the Ministry of Housing and Local Government (KPKT) to include strata owners in discussions, should the Strata Management Act be amended.

“We are ready to provide our input and answer questions on strata issues,” he said.

According to Theng, the association currently has around 300 members from seven states and federal territories in Peninsula Malaysia – Selangor, Kuala Lumpur, Melaka, Johor, Penang, Negeri Sembilan and Perak.

The objective of setting up the association is to protect the rights of minority share unit owners in strata developments.

The association is in the midst of registering with the Registrar of Societies (RoS), said Theng.

He added that after approval, the association will be renamed to “The Strata Owners Association Malaysia”.

To recap, an Oct 4 ruling by the Court of Appeal held that Joint Management Body (JMB) committees cannot charge different rates on property owners in a mixed development.

The ruling overturned a High Court decision stating that JMBs have the power under the Strata Management Act to determine or fix different rates of service or maintenance charges for different parcels in a mixed development.

In mid-October, the Malaysian Institute of Property and Facility Managers (MIPFM) voiced their concerns over potential problems arising from the implementation of the court ruling for a flat rate maintenance fee for mixed-use properties.

One of their main concerns is that a uniform rate will be unfair to owners who own the affordable housing units in a development project that also has a high-end phase that provides facilities and amenities that are not accessible to the affordable housing residents.