JMB_Act 663

8/8/2019 JMB_Act 663

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BUILDING AND COMMON

PROPERTY (MAINTENANCE ANDMANAGEMENT) ACT 2007

By

LEE SWEE SENG

Advocate & Solicitor

Certified Mediator

Notary Public

Patent Agent

www.leesweeseng.com

[email protected]

©copyright

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INTRODUCTION

Came into force on 12 April

2007.

It is an Act to provide for the

proper maintenance and

management of buildings and

common property, and for

matters incidental thereto.

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THE POSITION BEFORE THE ACT

The maintenance and management of building

housing two or more storeys and common

property was governed by the HousingDevelopment (Control and License) Act 1966 (Act

118) and the Strata Titles 1985 (Act 318).

The developer is responsible for the maintenance

and management of the common property before

the formation of the Management Corporation

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THE POSITION AFTER THE ACT

Section 4 of the Building and

Common Property (Management &

Maintenance) Act 2007 (BCP Act)

- A Joint Management Body that

comprises of the developer and the

purchasers are responsible to provide for the proper maintenance

and management of buildings and

common property, and for matters

incidental thereto

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JOINT MANAGEMENT BODY When is the JMB formed?

For development completed before 12th

April 2007, JMB must be formed before 12th April 2008 [Section 4(1)(a)]

For development completed on or after

12th

April 2007, JMB must be formednot later than 12 months from the date

of delivery of vacant possession

[Section 4(1)(b)]

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JOINT MANAGEMENT BODY

Jelutong MP Datuk Lee Kah Choon said the Actalso allowed for the setting up of the

commissioner of building (COB), headed by the president of the local council, to ensure that the joint management body was formed.

³COB and the joint management body are the

proper channels to which they can forward their complaints should they encounter managementand maintenance problems,´ he said.

Source: 07/05/2007 The Star By David Tan

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Section 6(1):-

d) the determination of the rate of interest

payable by a purchaser in respect of

late payment of charges; and

e) any matter connected with the

maintenance and management of the

common property of the building.

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The quorum at the first meeting of the Body shall beone-quarter of the purchasers who has paidmaintenance charges in respect of their parcels to theBuilding Maintenance Account (³members entitled

to vote´) of the developer [Section 6(2)

] If within half hour after the time appointed for themeeting, a quorum is not present, the member entitled to vote who are present shall constitute aquorum [Section 6(3)]

Joint purchasers shall not be entitled to vote except by way of a jointly appointed proxy [Section 6(5)]

In the event of an equality of votes, the chairmanshall have a casting vote [Section 6(6)]

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Section 8(1) of the Building andCommon Property (Management &Maintenance) Act 2007.

Duties of the Body:

a) To properly maintain the common property and keep it in a state of goodand serviceable repair;

b) To determine and impose charges thatare necessary for the repair and proper maintenance of the common property;

c) To insure and keep insured the building to the replacement value of the building against fire and suchother risks as may be determined by

the Body;

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Section 8(1)

d) To apply insurance moneys received by

the Body in respect of damage to the

building for the rebuilding and

reinstatement of that building;

e) To comply with any notices or orders

given or made by the local authority or

any competent public authority requiring

the abatement of any nuisance on thecommon property, or ordering repairs or

other work to be done in respect of the

common property or other improvements

to the property;

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Section 8(1)

f) To prepare and maintain a register of all purchasers of the building;

g) To ensure that the Building Maintenance fundis audited and to provide audited financialstatements for the information to the

purchasers;

h) To enforce house rules for the proper

maintenance and management of the buildings;and

i) To do such other things as may be expedient or necessary for the proper maintenance andmanagement of the building.

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Section 8(2) of the Building andCommon Property (Management& Maintenance) Act 2007.

The power of the Body shall

includea) To collect from the purchasers

maintenance and managementcharges in proportion to theallocated share units of their

respective parcels; b) To authorize expenditure for

the carrying out of themaintenance and managementof the common property.

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Section 8(2)

c) To recover from any purchaser any sum expended by the Body in respect of that parcel in complyingwith any such notices or orders as referred to

under paragraph (1)(e);d) To purchase, hire or otherwise acquire movable or

immoveable property for use by the purchasers inconnection with their enjoyment of the common

property;

e) To arrange and secure the services of any personor agent to undertake the maintenance and

management of the common property of the building;

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Section 8(2)

f) To make house rules for the proper

maintenance and management of the building; and

g) To do all things reasonably necessary for

the performance of its duties under this

Act.

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DISSOLUTION OF JOINT

MANAGEMENT BODY The Body shall be

dissolved 3 months

from the date of thefirst meeting of the

management

corporation for the

building [Section15(1)]

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MANAGEMENT BODY Section 41 (Strata Titles Act 1985)

Duty of original proprietor to convene first annual generalmeeting.

1) It shall be the duty of the original proprietor to convene thefirst annual general meeting of the managementcorporation within 1 month after the expiration of theinitial period.

2) If the original proprietor fails to comply with subsection(1), he shall be guilty of an offence and shall be liable onconviction to a fine not exceeding RM25,000.00 and to afurther fine not exceeding RM2000 for each day theoffence continue to be committed.

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MANAGEMENT BODY Section 2 (Strata Titles Act 1985)

³initial period´

± in relation to a management corporation, means the

period commencing on the day on which the

management corporation is formed and ending on the

day on which there are proprietors, excluding the

proprietor of the lot who is registered as a proprietor of a parcel or parcels or a provisional block or blocks the

sum of whose share units is at least one-quarter of the

aggregate share units.

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MANAGEMENT BODY Section 15(2)

The Body shall-

a) Not later than 1 month from the date of the firstmeeting of the management corporation, hand over to

management corporation-

i. the house rules;

ii. the audited accounts of the BMF or, if suchaccounts have not been audited, the unaudited

accounts;iii. all assets and liabilities of the Body;

iv. records related to and necessary for themaintenance of the building and its common

property; and

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MANAGEMENT BODY Section 15(2)

b) if only unaudited accounts have been handed

over under subparagraph (a) (ii); not later than

3 months from the date of the first meeting of

the management corporation, hand over to the

management corporation the audited accounts

of the Body.

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MANAGEMENT BODY

If the Body fails to comply with this

section, every member of the Bodycommits an offence and shall, on

conviction, be liable to a fine not

exceeding RM10 000; AND

Shall also be liable to a further fine

not exceeding RM1000 for every day

during which the offence is continued

after conviction [Section 15(3)]

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MANAGEMENT BODY

Section 15(4)

EXCEPTION:

± Where an offence under this section has been

committed by the Body, every member of the Bodyshall be deemed to have also committed that offence

unless, having regard to all the circumstances, he

proves-

a) that the offence was committed without hisknowledge, consent or connivance; and

b) that he had taken all reasonable precautions and had

exercised due diligence to prevent the commission of

the offence.

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JOINT MANAGEMENT

COMMITTEE

Section 11(1):-

Joint Management

Committee may perform the

Body¶s duties and conduct

the Body¶s business on its

behalf, and may for that purpose exercise any of the

Body¶s power.

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JOINT MANAGEMENT

COMMITTEE Section 11(2):-

The committee shall consist of;

± the developer

± not less than 5 and not more than 12 purchasers

who shall be elected at the annual general

meeting of the Body and shall hold office for a

period not exceeding 3 years or until thedissolution of the Body in accordance with

Section 15, whichever earlier.

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JOINT MANAGEMENT

COMMITTEE Section 11(3)

From among the members of the Committee

elected under subsection (2), there shall beelected a chairman, a secretary and atreasurer.

Section 11(4) The provision of the First Schedule shall

apply to the Committee.

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JOINT MANAGEMENT

COMMITTEE

FIRST SCHEDULE

[subsection 11(4)] Times and places of meetings.

- The Committee is to hold as many meetings as are

necessary for the efficient performance of its functions.

- The meetings are to be held at such places and times as

the chairman may decide.

- BUT, the chairman shall not allow more than 2 monthsto lapse between meetings.

- The chairman shall call for a meeting if requested to do

so in writing by the Commissioner/ by at least 2

members of the Committee.

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JOINT MANAGEMENT

COMMITTEE

FIRST SCHEDULE

[subsection 11(4)]

Quorum

- The chairman and at least half of

the members of the Committee

shall form a quorum at anymeeting of the Committee.

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JOINT MANAGEMENT

COMMITTEE

FIRST SCHEDULE

[subsection 11(4)]

Casting vote.

- If on any question to be determined by the

Committee there is an equality of votes, the

chairman shall have a vote in addition to hisdeliberative vote.

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JOINT MANAGEMENT

COMMITTEE

FIRST SCHEDULE

[subsection 11(4)]

Committee may invite others to meetings.- The Committee may invite any person to attend

any meeting or deliberation of the Committee for

the purpose of advising or assisting the Committee

on any matter under discussion, BUT any person

so attending shall have no right to vote at the

meeting or deliberation.

- Person invited shall be paid allowances.

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JOINT MANAGEMENT

COMMITTEE

FIRST SCHEDULE

[subsection 11(4)]

Resolution of the Committee.

- A resolution is taken to have been passedat a meeting of the Committee if:

a) all members of the Committee have beeninformed of the proposed resolution in writing,

or reasonable efforts have been made to informall members of the Committee of the proposedresolution; and

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JOINT MANAGEMENT

COMMITTEE

FIRST SCHEDULE

[subsection 11(4)]

b) the resolution in writing is signed by every member of

the Committee indication agreement with the resolution,

and in the absence of such agreement by every member of

the Committee, a meeting has to be held.

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JOINT MANAGEMENT

COMMITTEE

FIRST SCHEDULE

[subsection 11(4)]

Minutes.- The secretary of the Committee shall causeminutes of all their meetings to be maintained andkept in a proper form.

- Minutes of meetings of the Committee, if dulysigned, shall be admissible in any legal proceedingsas a prima facie evidence of the facts stated in themwithout proof.

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JOINT MANAGEMENT

COMMITTEE FIRST SCHEDULE

[subsection 11(4)]

Minutes.- Every meeting of the Committee in respect of the proceedings of which minutes have been so madeshall be deemed to have been duly convened and

held and all members at the meeting to have beenduly qualified to act.

- A Committee shall cause copies of the minutesof all its meetings to be submitted to the

Commissioner as soon as practicable.

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JOINT MANAGEMENT


[subsection 11(4)]

Procedure

- The Committee may regulate its own

procedure.

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JOINT MANAGEMENT

COMMITTEE

FIRST SCHEDULE

[subsection 11(4)]

Disclosure of interest.- A member of the Committee having any interest in any

matter under discussion by the Committee shall disclose tothe Committee the facts of his interest and its nature.

- A disclosure shall be recorded in the minutes of theCommittee and, after the disclosure, the member having aninterest in the matter shall not take part nor present in anydeliberation or decision of the Committee.

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JOINT MANAGEMENT

COMMITTEE

FIRST SCHEDULE

[subsection 11(4)]

Validity of acts and proceedings.

- No act done or proceeding taken under this Act shall

be questioned on the ground of:

a. any vacancy in the membership of, or any defect in

the constitution of, the Committee;

b. contravention by any member of the Committee; or

c. any omission, defect or irregularity not affecting themerits of the case.

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JOINT MANAGEMENT


[subsection 11(4)]

Members to devote time to business of Committee.

- The members of the Committee shalldevote such time to the business of theCommittee as is necessary to discharge their duties effectively.

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RIGHT OF PURCHASER Section 13

On application by or on behalf of a person who

is a purchaser, or by or on behalf of a personwho is a prospective purchaser, the Body shall

issue to that person a certificate certifying-

a) the amount of charges payable by a purchaser;

b) the time and manner of payment of the amount of

charges;

c) the extent, if any, to which the charges have been

paid;

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RIGHT OF PURCHASER

d) the amount, if any, then recoverable by the Body in

respect of the parcel;

e) the sum standing to the credit of the BMF and the

sum in the account that has been committed or

reserved for expenses already incurred by the Body;

f) the nature of the repairs and estimated expenditure, if

any, where the Body has incurred any expenditure or

is about to perform any repairs, work or act in respect

of which a liability is likely to be incurred by the

purchaser of the parcel under any provision of thisAct; and

g) the amount paid and to be paid by the developer for

unsold parcel.

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BUILDING MAINTENANCE

ACCOUNT Section 16(1)

± Developer to open and maintain Building

Maintenance Account. The Building Maintenance Account shall

be opened in the name of the development

area with a bank or financial institution

licensed under Banking and Financial

Institutions Act 1989 or regulated by the

Central Bank under any other written law.

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ACCOUNT One Building Maintenance

Account shall be opened for

each development area[Section 16(2)]

The Account shall be

maintained by developer until

the establishment of the Bodyfor the building [Section

16(3)]

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ACCOUNT

The developer shall not open and maintain a

Building Maintenance Account together with any other building outside the

development area.[Section 16(4)]

The Commissioner may resolve the disputearise in respect of the Account as he deem

fit and just.[Section 16(5)]

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ACCOUNT

Section 17

± Duties of developer as to Building Maintenance

Account.

Section 17(1)

A developer shall deposit into the Building

Maintenance Account-

a) all charges received by him from the purchasers in thedevelopment area for the maintenance and

management of the common property of the

development area; and

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ACCOUNT

Section 17(1)

b) all charges for the maintenance andmanagement of the common property to be paid by the developer in respect of those parcels in the development areawhich has not been sold, being a sum

equivalent to the maintenance charges payable by the purchasers to thedeveloper had the parcels been sold.

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The developer shall-

a) cause proper accounts of the Building

Maintenance Account to be kept inrespect of all sums of money receivedfrom and all payments made out of the Account;

b) appoint a professional auditor to

audit the Account annually or in thecase of where money to betransferred under subsection 19(3), 1month before the date of actualtransfer;

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c) file with the Commissioner a copy of the

statement of accounts certified by the auditorsand a copy of the auditor¶s report within 14

days of the accounts being audited; and

d) permit the Commissioner or any person

authorized by the Commissioner in writing to

act on its behalf full and free access to the

accounting and other records of the Building

Maintenance Account and to make copies or

extracts of those accounting or other records.

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ACCOUNT

Section 19

Moneys not to form

part of the property

of the developer.

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All money in the Building Maintenance

Account shall not be deemed to for part of the property of the developer in the event-

a) the developer enters into any composition or

arrangement with his creditors or has a receiving

order or an adjudication order made against him; or b) The developer, being a company, goes into

voluntary or compulsory liquidation.

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When must BMA be opened?

S 16(1)

Development that is completed after April12, 2007;

± the developer must open a BMA in the name of the development area, before delivery of vacant possession to the purchasers.

± each development area shall have a separate

BMA. The developer shall deposit into theBMA, all charges received from purchasers,and all charges for unsold units.

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When must BMA be opened?

Development completed before April 12,

2007;

± the developer has immediately before that day

been collecting charges for maintenance from

purchasers, the developer may continue to do so

until the JMB is formed. It would appear that a

BMA has to be opened forthwith.

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FUND Section 22(1);

Any surplus moneys in the Building

Maintenance Account after paymentof all expenditure which have been

properly charged to the Building

Maintenance Account shall be

transferred to the Body by thedeveloper.

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FUND

Section 22(1)

It must be transferred not later than 1 monthfrom the date of the establishment of the

Body, and such moneys shall constitute a

fund to be known as the ³Building

Maintenance Fund´ which shall bemaintained by the Body.

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FUND Section 22(2)

The Building Maintenance Fund shall be

administered and controlled by the Body andshall consist of-

a) all or any part of the maintenance charges for the building imposed by or payable to the Body under this Act;

b) All moneys derived from the sale, disposal, lease or hire of, or any other dealing with, any property,mortgages, charges or debentures vested in or acquired by the Body;

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FUND

Section 22(2)

c)all other moneys and property whichmay in any manner become payableto or vested in the Body in respect of any matter incidental to its functionsand powers; and

d) all other moneys lawfully receiver by the Body, including interest,donation and trust.

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FUND

Section 22(3)

d) carrying out periodical inspection on the safetyof the building in the manner as specified in and

under the Street, Drainage and Building Act 1974;e) cleaning premises including white-washing,colour washing or painting of the common property;

f) carrying out inspection of all electrical wiringsystems of the common property and replacingany faulty wiring systems, if any;

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FUND

Section 22(3)

k) paying the remuneration or fees of the

managing agent appointed under section 25;

l) paying any expenditure lawfully incurred by the

Body;

m) paying for the allowances and other expenses

of the members of the Body and member of theCommittee according to such rates as may be

approved by the Commissioner;

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FUND Section 22(3)

n) paying any expenses, costs or expenditure in

relation to the procurement of goods or services;

o) purchasing or hiring equipment, machinery and

any other material, acquiring land and any assets,

and erecting buildings, and carrying out any other

works and undertaking in the performance of the

Body¶s functions and the exercise of its powers

under this Act;

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FUND Section 22(3)

p) paying any expenses for carrying

into effect the provisions of this Act;and

q) doing generally all things

necessary for the maintenance and

management of the common

property.

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What is the difference between

BMA and BMF?

The BMA is an account operated for the

maintenance of a building by the developer

before the JMB is formed. When the JMB isformed, surplus moneys in the BMA shall

be transferred to the BMF which shall be

maintained, administered and controlled bythe JMB.

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MAINTENANCE CHARGES

Any written notice served on the purchaser

requesting for the payment of the charges

shall be supported by a statement of thecharges issued by the developer or Body

[Section 23(3)]

The purchaser shall, within 14 days of receiving a notice , pay the charges

requested for [Section 23(4)]

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MAINTENANCE CHARGES

If the charges remain unpaid by the

purchaser at the expiration of the period of

14 days, the purchaser shall pay interest atthe rate to be determined by the Body but

such interest shall not exceed 10% per

annum [Section 23(5)]

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MAINTENANCE CHARGES

Schedule H of the Housing Development(Control and Licensing) Regulations.

Regulation 19(1) ± The Purchaser shall be liable for and shall pay

the service charges for the maintenance andmanagement of the common property and for

the services provided by the Vendor prior to theestablishment of a management corporationunder the Strata Titles Act 1985.

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MAINTENANCE CHARGES

Regulation 19(2) ± From the date the Purchaser takes vacant possession of

the said Parcel, the Purchaser shall pay a fair and justifiable proportion of the costs and expenses for themaintenance and management of the common property

and for the services provided. Such amount payableshall be determined according to the provisional shareunits assigned to the said Parcel by the Vendor¶slicensed land surveyors

± The amount determined shall be the amount sufficient

for the actual maintenance and management of thecommon property. The Purchaser shall pay one (1)month¶s deposit and three (3) months¶ advance inrespect of the service charges and any paymentthereafter shall be payable monthly in advance.

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MAINTENANCE CHARGES

Regulation 19(3)

- Every written notice to the Purchaser requesting for the payment of service charges from the Vendor shall besupported by a service charge statement issued by theVendor

Regulation 19(4)

- The service charge payable shall be paid within seven (7)days of the receipt by the Purchaser of the Vendor¶swritten notice requesting the same. If the service charge

shall remain unpaid by the Purchaser at the expiration of the said period of seven (7) days, interest on the servicecharge shall commence immediately thereafter and be

payable by the Purchaser, such interest to be calculatedfrom day to day at the rate of ten per centum (10%) per

annum.

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MAINTENANCE CHARGES

Settle your maintenance charges or risk having your assetssealed.

Owners and tenants of units in high-rise buildings such as

condominiums, office buildings and shopping centres were

given this warning yesterday by the secretary-general of the Ministry of Housing and Local Government, Datuk

Ahmad Fuad Ismail.

The assets would be sealed if the Commissioner of

Buildings (COB) appointed by the state governments gave

the permission after receiving an application from the

developer of a building, he said.

Sources: 15/04/2007 Sunday Times

MAINTENANCE CHARGES

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MAINTENANCE CHARGES

Under the new Act, owners must pay their charges within14 days of the first notice and if they fail to do so evenafter the second notice, they can be taken to court.

Both the owner and tenant must also make sure they areregistered with their respective management bodies.

A warrant of attachment will only be served as a lastresort.

These amendments are made to ensure that the entire

housing industry functions effectively without any hiccupson the part of the developer or dwellers.

Source: 22/04/2007 New Straits Times

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SINKING FUND

Section 24

Joint management Body to open and maintain

sinking fund.

± The Body shall open and maintain a sinking fund intowhich shall be paid such portion of the contribution

to the BMF as may, from time to time, be determined

by the Body for the purposes of meeting its actual or

expected liabilities in respect of the following:

a) the painting or repainting of any part of the common

property;

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SINKING FUND

Section 24

b) the acquisition of any movable property for use in

relation to the common property;

c) the renewal or replacement of any fixture or fittingcomprised in any common property; or

d) any other expenditure as the Committee deems

necessary.

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SINKING FUND

Schedule H of the Housing Development(Control and Licensing) Regulations.

Regulation 20(1) ± The Vendor shall, upon the date the Purchaser takesvacant possession of the said Parcel, open andmaintain separate sinking fund for the purposes of meeting the actual or expected liabilities in respect of

the following matters-a) The painting and repainting of any part of the

common property;

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SINKING FUND

Schedule H of the Housing Development

(Control and Licensing) Regulations.

Regulation 20(1) b) the acquisition of any movable property for use in

relation with the common property; or

c) the renewal or replacement of any fixture or fitting

comprised in the common property.

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SINKING FUND

Schedule H of the Housing Development (Control

and Licensing) Regulations.

Regulation 20(2) ± The Purchaser shall, upon the date he takes vacant

possession of the said Parcel contribute to the sinking

fund an amount equivalent to ten per centum (10%) of

the service charges.

± The contribution shall be payable monthly in advance.

± All funds accumulated in the sinking fund shall be held

by the Vendor in trust for the Purchaser.

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Non- application of other written

laws, contracts and deeds Section 44

On the coming into operation of this Act, in a

local authority area or part of a local authority areaor in any other area, the provisions of any written

law, contracts and deeds relating to the

maintenance and management of buildings and

common property in as far as they are contrary tothe provisions of this Act shall cease to have effect

within the local authority area or that other area.

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CONCLUSION

The BCP Act is aimed at plugging loopholes andgrey areas not covered by the Strata Titles Act1985 and the Housing Development (Control and

Licensing) Act 1966. Under the BCP Act, the roles of the developers

and purchasers are more clearly defined and threenew bodies are introduced to implement proper building maintenance and management, namely

the Commissioner of Buildings (COB), JointManagement Body (JMB) and Joint ManagementCommittee (JMC).

JMB_Act 663

Documents

Transcript of JMB_Act 663