indepth

To serve or self-serve?

We all know the Joint Management Committee (JMC) or Management Committee (MC), stipulated under the Strata Management Act 2013 (SMA) to take care of a strata community, comprises volunteers who have to use their personal time to serve in the various roles assigned to them. While most of them are genuinely passionate about the wellbeing of their communities, there are unfortunately some bad eggs with personal agendas who take advantage of their positions for self advancements.

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Here are some examples.

Scenario 1:

“There is this estate agent lady who is in the JMC, and she seems to have all the information of the owners (names, addresses and contact numbers). She periodically contacts me and my neighbours to ask if we wish to sell our condominium units. She always claims certain investors wish to offer a high price. How does she obtain our information and contact numbers?”

Scenario 2:

You have diligently paid your instalments to your bank for the last 10 years and the quantum of indebtedness has been significantly reduced. Then one day you receive a call from a financial planner, who is in the MC, and he asks, “Do you wish to refinance your property for another loan? As a financial planner, I can arrange it with the banks. You could use the money to buy another property.”

Scenario 3:

“I can do a better job to run the management and maintenance of our own apartment building. My team, although unlicensed, can also do property management by making the meagre deposit (refundable) as bond to the JMB or MC. Trust me, I will not deplete your entire sinking fund or abuse my position.”

Scenario 4:

During the AGM, this big time contractor-cum-investor is very vocal in asking the “right questions” as many parcel owners are not familiar with SMA legislations. Consequently, he is made the chairman of the JMC. He always seems to have his own friendly suppliers, contractors, service providers, insurance brokers and even Airbnb operators for everything in the management and maintenance of the common property. 

Personal Data Protection Act, 2010

In Malaysia, we have the Personal Data Protection Act, 2010 (PDPA) implemented since Nov 15, 2013, which is aimed at preventing abuse of personal data for commercial purposes.

The Act plays a crucial role in safeguarding the interests of individuals and makes it illegal for corporate entities and individuals to disclose, sell personal information or allow the use of data by third parties. The penalty for non-compliance is between RM100,000 and RM500,000 and/or between one and three years imprisonment upon conviction.

A candidate should not have conflicting personal and professional commitments. For example, the unethical estate agent and the overzealous financial planner in Scenario 1 and 2 above may have particular interest in “serving” the JMC or MC to obtain private information and details of owners so that they may gain advantage and priority (with their fellow owners) for their listing purposes (sale, purchase, financing and rent).

This clearly contravenes the PDPA legislation and the aggrieved party may lodge an official complaint to the Ministry of Communications & Multimedia, Malaysia (www.kkmm.gov.my) for an investigation.

Be wary of ‘one-issue’ candidates

Newcomers frequently make good volunteers but how much interest has the candidate (during AGM election) shown in the community and its undertakings? Does he appear to be suddenly interested? Have there been regular meet-ups and participation in community activities? If not, investigate the sudden interest.

Be particularly careful about “one-issue” candidates who volunteer because they want to “take-over” property management. Be particularly cautious of those “unlicensed property companies/property managers” that have managed to infiltrate committee members in the JMC and MC, if they are not themselves in the committee.

They may paint a glossy picture of what they can do through their “years of experience” or their so-called “knowledge of the SMA”, but do they have the professional qualifications, management and technical experience and pass the stringent test of professional competency? Are they registered with the legislated Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP) (www.lppeh.gov.my), which is the sole statutory regulatory board governing property managers that issues licences to those registered ones in Malaysia under Act 242?

Person with pecuniary interest

“Pecuniary interest” is an interest that a person has in a matter because of a reasonable likelihood or expectation of appreciable financial gain to himself or through another person with whom he is associated. Therefore, it is best that any owner who has vested interest in the management and maintenance of his stratified building should recuse himself from seeking election to the JMC or MC.

In any decision-making process of a subject matter by the committee, a member of the committee who has direct or indirect pecuniary interest or vested interest in the subject matter should declare his interest therein and immediately recuse himself from the decision making process. Although this is not provided in the SMA or Strata Management Regulations, it is the fiduciary duty and responsibility of any committee member for good self-governance.

Nevertheless, Section 87 in the SMA prohibits appointment of a managing agent having professional or pecuniary interest, as reproduced below for clearer understanding.

Section 87

(1) A person shall not be appointed as a managing agent if he has a professional or pecuniary interest in any building or land intended for subdivision into parcels or any subdivided building or land.

(2) A person is regarded as having a professional or pecuniary interest in any building or land intended for subdivision into parcels or any subdivided building or land if –

(a) he has been responsible for the design or construction of the building;

(b) he or any of his nominees, officers or employees has any material interest in the building or land intended for subdivision into parcels or any part of the building or land;

(c) he is a partner or is in the employment of a person who has any material interest in the building or land intended for subdivision into parcels or any part of the building or land; or

(d) he or his family holds any interest in the building or land intended for subdivision into parcels or any part of the building or land whether directly or as a trustee or otherwise.

Challenging duties

Although the JMC or MC is made up of voluntary positions, they have to be taken seriously because they involve people’s wellbeing and their investments. Most owners’ corporations are headed by a leader who might also be the chairman at meetings. Very often, those who are most vocal at meetings are elected but that may not be sufficient for the long term. Strong and principled leadership is an essential component of every successful JMC or MC.

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

This story first appeared in the EdgeProp.my e-Pub on Jan 8, 2020. You can access back issues here.

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