Is your strata property being managed by the right JMB or MC? - Mar 12, 2021, Penang, Malaysia, Lebuh Pantai Agency

Is your strata property being managed by the right JMB or MC?

Quality management and maintenance of a strata building or development lie in the hands of the people elected to represent strata owners. Here are the check and balances to keep in mind when voting during your Annual General Meeting.

As a strata owner, you effectively own a part of the property be it a condominium or a landed home in a gated and guarded development, hence, you would have a say in its matters. Strata owners are encouraged to attend their Annual General Meeting (AGM) as they should play an active role in appointing the board of members and the representatives for condo/home owners.

Similar to a company, the strata property’s success depends on how reliable and competent its board of members are. If your property is a new one and has not received a strata title, a Joint Management Body (JMB) will be set up to run things, starting from the time of delivery of vacant possession. Upon issuance of a Strata Title, the interim JMB will be replaced by a Management Committee (MC).

A common issue in many strata developments is the abuse of power leading to building deterioration in and dismal property services. Property owners should keep in mind that not every management elective is genuinely passionate to volunteer one’s’ time to serve for the well-being of his community; one could have a personal agenda to take advantage of his position to help himself with jobs, status, information and gains to enrich himself or herself.
Now, let’s take a look at the information that will help strata owners keep their JMB or MC in check:

Who is eligible to be voted on the JMB or MC?

The JMC or MC should comprise a minimum of 3 persons and a maximum of 14 persons who are owners eligible to vote. There shall be a chairman, secretary and treasurer, all of whom shall be natural persons. Although these are voluntary positions, they have to be taken seriously because they involve people’s well-being and their investments. Most owners’ corporations are headed by a leader who might also be the chairman at meetings. Strong and principled leadership is an essential component of every successful JMC or MC. Very often, those who speak the loudest at meetings are elected but that may not be sufficient for the long term.

A member of the executive committee is required to have a high standard of integrity. The Strata Management Act 2013 (SMA 2013) provides a comprehensive list of conditions that must be followed to be eligible for election and to be a committee member.

First, to be eligible for election as a committee member, the parcel owner must be at least 21 years old and have fully paid his maintenance charges and sinking fund at least 7 days before the AGM. It is to be noted that a proxy is not eligible for election as a committee member.

Second, while a parcel owner is a committee member, he must observe the following conditions:-
(a) He is not a bankrupt;
(b) He is still a parcel owner;
(c) He is not convicted for an offence of fraud or dishonesty;
(d) His conduct must not bring discredit on the JMC/ MC;
(e) He must be of sound mind;
(f) If he is the chairman, he must not absent himself from 3 consecutive committee meetings without the leave of the committee;
(g) If he is not the chairman, he must not absent himself from 3 consecutive committee meetings without the leave of the chairman;
(h) He must not be in arrears of the maintenance charge and sinking fund (including interests) for 3 consecutive months;
(i) Representative is not removed by his body corporate owner;
(j) If he commits a serious breach of the by-laws, he must remedy the breach within 14 days of the notice from the committee;
(k) He is not convicted for an offence of moral turpitude.

The Wikipedia definition of ‘moral turpitude’, in the legal context is: As an act or behaviour that gravely violates the sentiment or accepted standard of the community. It has also been described as an ‘act of baseness, vileness or depravity in the private and social duties which a man owes to his fellowmen or to society in general, contrary to the accepted and customary rule of rights and duty between man and man. It simply means a criminal act that is contrary to community standards of justice, honesty or good morals.

Examples of abuse of power among JMB or MC members

Misusing strata owners’ personal information

‘There is this estate agent lady, who is in the JMC, and she seems to have the owners full information (names, addresses and contact numbers). She periodically contacts me and my neighbours whether we wish to sell our condominium units as she always claims that a certain investor wishes to offer a “high price”.

Profiting from the sale of personal information

‘You have diligently paid your loan monthly installments 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’.

Too good to be true property management services

‘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 a bond to the JMB or MC. Trust me that I will not deplete your entire sinking fund and abuse my position’.

A self-serving / autocratic Chairman

‘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 the Strata Management Act 2013 legislation. 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. In fact, he has a pecuniary interest in everything he does.’

How to identify self-serving JMB or MC candidates?

Newcomers frequently make good volunteers but sometimes are detracted by insisting on covering old topics. How much interest has the candidate (during the AGM election) shown in the community and its undertakings? Did he suddenly appear to be interested? Have there been regular meet-ups, participation in activities? If not, investigate the sudden interest.

Be particularly careful about the ‘one-issue’ candidates who volunteer because they want to ‘takeover’ 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 Strata Management Act 2013”. But do they have the professional qualifications, management and technical experience and passed 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 licenses to those registered ones in Malaysia under Act 242? A candidate should not have conflicting personal and professional commitments. For example, the unethical estate agent and the overzealous financial planner, as in Scenario 1 & 2 above. They may have a particular interest in ‘serving’ the JMC or MC to obtain private information and details of owners so that they may gain advantage and priority for their property listings purposes (sale, purchase, financing and rent).
This clearly contravenes the PDPA legislation and the aggrieved party may lodge an official complaint to Ministry of Communications & Multimedia, Malaysia (www.kkmm.gov.my) for an investigation.

Take note of person(s) having 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 the person or through another person with whom the person is associated. Therefore, it is best that any person or strata owner, who has a pecuniary interest or vested interest in the management and maintenance of his stratified building, should recuse himself from seeking election to the JMC or the MC.

In any decision-making process of a subject matter by the committee, a member of the committee who has a 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 of the committee on the subject matter.

Although this is not provided in the Strata Management Act 2013 or Strata Management Regulations, it is the fiduciary duty and responsibility of any committee member for good self-governance. There is, however, Section 87 in the SMA that prohibits the appointment of a managing agent (property management company) having professional or pecuniary interest. Section 87 is reproduced below for a clearer understanding of the issue of having a vested interest in the issue of management and maintenance of the stratified buildings:
(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 –
– he has been responsible for the design or construction of the building;
– 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.

What to do if an elected JMB or MC member fails to perform his duty?

If the parcel owner fails to observe the above conditions, he is deemed to have vacated his office as a committee member. A committee member may resign from his office at any time by giving written notice to the committee. Consequently, the general body, JMB/ MC, may elect another owner, who is eligible to vote, at an extraordinary meeting (EGM) to replace the member and to hold the office for the remaining term; or to leave the position vacant until the election of the JMC or MC, as the case may be, at the next annual general meeting (AGM).

Penalty for abuse of power

The Personal Data Protection Act, 2010 (PDPA) which was implemented in Malaysia on 15 November 2013 is aimed at preventing abuse of personal data for commercial purposes. This Act would play a crucial role in safeguarding the interests of individuals and make 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 to RM500,000 and/or between 1 to 3 years imprisonment on conviction.
At the end of the day, strata residents must be aware of their responsibilities and obligations as well as strive to take charge in order to protect the very investment that they live in.

Source : iProperty.com.my
March 10, 2021

Published : 12-Mar-2021