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Should there be a limit to an MC's use of the sinking fund?

PETALING JAYA (July 16): Should there be a limit to a strata management committee's power especially with regards to the usage of the sinking fund?

Although existing laws do not impose legal limitations on a committee's powers, Solaris Dutamas Management Corporation (MC) chairman Datuk Nabhesh Khanna said a cap should perhaps be put on the usage of the sinking fund at any one time.

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Nabhesh said spending decisions largely rely on the prudence of the management committee. "Hence, for major expenses, it is better to go back to the owners on the plan you may have but do you need to do that? There is no legal requirement to do so," he said during EdgeProp Malaysia’s Virtual Fireside Chat titled " Inside story: Managing high-end strata homes" aired over EdgeProp Malaysia's Facebook this evening. 

Nabhesh was one of the panelists of the online event along with The Mansions @ ParkCity Heights joint management body (JMB) chairman Kenneth Khoo and Sri Penaga Condominium Management Corporation (MC) past chairman Khaw Chay Tee.

The discussion was moderated by EdgeProp Malaysia editor-in-chief and managing director Au Foong Yee.

According to Khaw, although the Strata Management Act (SMA) 2013 stipulates the usage of the sinking fund such as for repainting the building,  much of the discretion lies with the committee.

“To some extent, the MC has too much power to determine the usage of the sinking fund as the SMA does not put any limitation to the MC’s power provided that a resolution to do so is passed in an AGM or EGM,” he added.

He concurred that as the sinking fund grows, there may be a need to have proper legal limitations as to how much the committee can spend at one time.

“Perhaps a 25% limitation [for one time spending], and if the MC wants to spend more than that, [apart from getting approval in AGM] they should go back to the owners for permission [through other means],” he said.

The virtual fireside chat was organised in partnership with Nippon Paint Malaysia with supporting sponsors Panasonic Malaysia; KipleLive, a wholly owned subsidiary of Green Packet Bhd, and Matrix Concepts Holdings Bhd. The event is also supported by The Edge Malaysia.

Stay safe. Keep updated on the latest news at www.EdgeProp.my 

Watch the Fireside chat here

For the full report on the virtual Fireside Chat read the July 24, 2020 issue of Edgeprop.my e-Pub.

View July 9, 2020, EdgeProp Malaysia’s Virtual Fireside Chat "Stop! Are you destroying your property value?"

Get the full results of EdgeProp Malaysia’s Best Managed & Sustainable Property Awards 2020 here: https://www.edgeprop.my/awards2020   

View the first virtual EdgeProp Malaysia’s Best Managed & Sustainable Property Awards 2020 ceremony 

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