- Condos, apartments, serviced residences – these are becoming popular choices for urbanites, but many are not equipped with the basic knowledge of being a strata property owner.
Many house buyers opt for strata properties (mostly high-rise apartments) due to their more affordable prices as well as their attached facilities.
However, their dreams could turn into nightmares if they overlooked salient aspects before signing the sale and purchase agreements (SPA).
In simple words, a strata property means a building that can be subdivided into parcels and shared common properties. Examples of strata properties are apartments, condominiums and townhouses in gated-and-guarded communities.
To serve as a guide, here is a checklist by the National House Buyers Association (HBA) on the things to note and consider before signing on the dotted line of your strata property purchase.
1. Run check on developer
First things first, get to know the developer! Ensure the housing developer has a valid Advertising Permit and Developer’s Licence (APDL) under the Housing Development (Control and Licensing) Act 1966 (Act 118). This APDL is the permit granted by the housing ministry to developers to advertise and sell houses. Having a valid and subsisting APDL means the developers are under the supervision of the housing ministry and the purchasers’ interests are in check.
However, a mere APDL does not suffice. You need to also make further research on the background of the developer, for instance, its previous housing projects and its success rate. It would be best to also run checks on the directors of the housing developer’s company to see whether they have good track records.
Note that, buying from housing developers that have valid APDL does not guarantee the project will be smooth-sailing or will never be abandoned. Nevertheless, with the element of supervision and monitoring by the housing ministry and having the details of the developers make it easier for you to take legal recourse against them if needed.
2 Get to know property
Get to know the details of the properties that you wish to buy. Some information like land tenure and completion date are stated in the APDL, but more information requires inquiries or research.
Get to know as well if the area is prone to chemical pollution or has any environmental issue. You don’t want to pay large sums of money monthly for properties that you don’t have peace of mind staying in due to bad emission of gas from factories nearby or wastage areas.
3 Maintenance fee and sinking fund
Even though the price of strata properties can be relatively affordable compared to landed properties, bear in mind you need to prepare to pay for maintenance charges monthly as well as make contributions to sinking funds. Failure to do so can land you in the Strata Management Tribunal or court, where you may face fines not exceeding RM5,000 or imprisonment if you are found guilty for neglecting the notices served by the management bodies or corporations. Alternatively, the management bodies or corporations may choose to subject defaulting house owners to warrants of attachment on their moveable properties.
The first year’s maintenance fee rate is stated in the SPA, while the maintenance fees for the subsequent years will be determined by the management bodies or corporations based on house owners’ votes. More often than not, house owners tend to complain their maintenance charges are high and not satisfactorily determined, but they fail to turn up for meetings. Whose fault is it? Therefore, never skip meetings that are held by the management bodies for your voice to be heard.
4 No total freedom – there are house rules
Unlike normal landed properties, strata properties denote more than one owner in a development who share common properties like swimming pools, halls or clubhouses. Therefore, it is natural that the management is not simply up to one person but is to be decided by the management body based on the law.
Almost everything is regulated, from parking to pet ownership and even private events are “not so private”. Every strata development has its own house rules, and all the owners must abide by the rules or will be in trouble or pay fines.
5 Know your rights
Study the plan
Aspiring house buyers may be promised 101 benefits and dreams by the properties’ sales persons, but please know you are getting only as per the building plan. Please check the plans that are attached with the SPA. The parcel unit, the accessory parcel if there is one, and the common properties are as per shown by the plan.
Duty to pay maintenance charge
A lot of house owners refuse to pay maintenance charges, claiming they are not satisfied with the level of management rendered by the management bodies. HBA would like to stress that not paying maintenance charges to demonstrate dissatisfaction towards the service level of management is not the proper way to tackle the problem.
It is a statutory duty for strata house owners to pay maintenance charges and dissatisfaction is not an excuse. Pay first and deal with the problem through meetings or lodge a complaint with the Strata Management Tribunal. Aggrieved owners could pay “under protest” to preserve their legal rights when seeking recourse.
Don’t be bullied for your ignorance
There have been cases where management bodies carry out their responsibilities not in accordance with the law. For instance, some resort to cutting the water or power supply of house owners who fail to pay maintenance charges.
Such action by the management bodies is wrong and not within the perimeter of the law. To avoid this, house owners must equip themselves with the required knowledge. To quote Benjamin Franklin, “An investment in knowledge pays the best interest”.
This article is jointly written by Lawyer Sharifah Razali and Datuk Chang Kim Loong, Hon Sec-Gen of the National House Buyers Association of Malaysia (HBA), a non-government, non-political and not-for-profit organisation manned wholly by volunteers. The link: www.hba.org.my