Strata Management Act 2013


LAWS OF MALAYSIA

Act 757

Strata Management Act 2013

An Act to provide for the proper maintenance and management of buildings and common property, and for related matters.

WHEREAS it is expedient for the purposes only of ensuring uniformity of law and policy with respect to local government to make laws relating to the maintenance and management of buildings and common property within Peninsular Malaysia and the Federal Territory of Labuan:

NOW, THEREFORE, pursuant to Clause (4) of Article 76 of the Federal Constitution, IT IS ENACTED by the Parliament of Malaysia as follows:

Part I

PRELIMINARY

Short title, application and commencement

      1. This Act may be cited as the Strata Management Act 2013.
      2. This Act applies only to Peninsular Malaysia and the Federal Territory of Labuan.
      3. This Act shall come into operation in each State on such date as may be appointed by the Minister, after consultation with the State Authority of that State, by notification in the Gazette, and the Minister may, after consultation with the State Authority, appoint different dates—
        1. for the coming into operation of this Act in different local authority areas or parts of local authority areas; and
        2. for the coming into operation of different provisions of this Act in different local authority areas or parts of local authority areas.
      4. This Act shall come into operation in the Federal Territory of Kuala Lumpur, the Federal Territory of Labuan and the Federal Territory of Putrajaya on a date to be appointed by the Minister responsible for the Federal Territory of Kuala Lumpur, the Federal Territory of Labuan and the Federal Territory of Putrajaya by notification in the Gazette.
      5. Notwithstanding subsection (3), the State Authority may, by notification in the Gazette, extend any of the provisions of this Act to apply to the whole or any part of any area within the State which is not under any local authority area, and may make such modifications, amendments or variations to the provisions of this Act as may be necessary for the purpose of their application to such area.
      6. Notwithstanding subsection (3), the State Authority may, by notification in the Gazette, exempt any part of any local authority area from any or all the provisions of this Act or any regulations made under this Act.
      7. The State Authority may, if in its opinion it would not be contrary to the public interest and the interest of the purchasers to do so, suspend the operation of this Act or any provision of this Act in any local authority area or any part of any local authority area or any other area for such period as it deems fit.
      8. In this Act, references to the State Authority in relation to the Federal Territory of Kuala Lumpur, the Federal Territory of Labuan and the Federal Territory of Putrajaya shall be construed as references to the Minister responsible for the Federal Territory of Kuala Lumpur, the Federal Territory of Labuan and the Federal Territory of Putrajaya.

Interpretation

  1. In this Act, unless the context otherwise requires—“sinking fund account” means an account required to be opened and maintained by a developer, joint management body, management corporation or subsidiary management corporation under section 11, 24, 51, 61 or 67, as the case may be;“maintenance account” means an account required to be opened and maintained by a developer, joint management body, management corporation or subsidiary management corporation under section 10, 23, 50, 60 or 66, as the case may be;

    “repealed Act” means the Building and Common Property (Maintenance and Management) Act 2007 [Act 663];

    “joint management body” means the body established under section 17;“building” includes part of a building;

    “building or land intended for subdivision into parcels” means—

    1. any building or buildings having two or more storeys in a development area and intended to be subdivided into parcels, and any land on the same lot intended to be subdivided into parcels to be held under a separate strata title; or
    2. any development area having two or more buildings intended to be subdivided into land parcels as defined in the Strata Titles Act 1985 [Act 318];

    “subdivided building or land” means a building or land as subdivided under the Strata Titles Act 1985;

    “bank or financial institution” means a bank or financial institution licensed under the Banking and Financial Institutions Act 1989 [Act 372 ] or the Islamic Banking Act 1983 [Act 276], or regulated by the Central Bank under any written law;

    “Central Bank” means the Central Bank of Malaysia referred to in the Central Bank of Malaysia Act 2009 [Act 701];

    “Charges” means any money collected to be deposited into the maintenance account;

    “managing agent” means a person who is appointed by the Commissioner under section 86;

    “common property”—

    1. in relation to a building or land intended for subdivision into parcels, means so much of the development area—
      1. as is not comprised in any parcel or proposed parcel; and
      2. used or capable of being used or enjoyed by occupiers of two or more parcels or proposed parcels; or
    2. in relation to a subdivided building or land, means so much of the lot—
      1. as is not comprised in any parcel, including any accessory parcel, or any provisional block as shown in a certified strata plan; and
      2. used or capable of being used or enjoyed by occupiers of two or more parcels;

    “limited common property” means such part of the common property in a lot—

    1. that is designated in a comprehensive resolution referred to in section 17a of the Strata Titles Act 1985 for the exclusive benefit of the proprietors of two or more, but not all, parcels; and
    2. for which a certificate has been issued by the Director certifying that the subsidiary management corporation has been constituted under the Strata Titles Act 1985;

    “management committee”, in relation to a management corporation, means the committee of the management corporation elected under section 56; “joint management committee”, in relation to a joint management body, means the committee of the joint management body elected under section 22; “subsidiary management committee”, in relation to a subsidiary management corporation, means the committee of the subsidiary management corporation elected under section 63; “approved company auditor” has the meaning assigned to it in the Companies Act 1965 [Act 125]; “licensed land surveyor” means a surveyor licensed under the Licensed Land Surveyors Act 1958 [Act 458]; “development area”—

    1. in relation to a building or land intended for subdivision into parcels, means any land on which the building or land intended for subdivision into parcels is developed or is in the course of development or intended to be developed; and
    2. in relation to a subdivided building or land, means any alienated land held as one lot under final title (whether Registry or Land Office title) on which the subdivided building or land is developed;

    “local authority area” means any area in a State that has been declared by the State Authority to be a local authority area in accordance with section 3 of the Local Government Act 1976 [Act 171]; “Government” means the Federal Government or the State Government; “special resolution” means a resolution which is passed at a duly convened general meeting of which at least twenty-one days’ notice specifying the proposed resolution has been given, and carried by a majority consisting of not less than three -quarters of the valid votes cast at the general meeting by a show of hands, or if a poll is demanded and taken, by a majority consisting of not less than three-quarters in number of the valid votes cast on such poll; “comprehensive resolution” means a resolution which—

    1. is considered at a duly convened general meeting of the management corporation of which at least thirty days’ notice specifying the resolution has been given; and
    2. at the end of the period of sixty days after the general meeting in paragraph (a) is convened, on a poll, the total of the share units of the parcels for which valid votes are counted for the resolution is at least two- thirds of the aggregate share units of the parcels of all the proprietors who constitute the management corporation at the end of such period;

    “unanimous resolution” means a resolution which is passed at a duly convened general meeting of which at least twenty-one days’ notice specifying the proposed resolution has been given, and carried by every valid vote cast at the general meeting by a show of hands, or if a poll is demanded and taken, by every vote cast on such poll; “exclusive benefit”, in relation to a limited common property, includes but is not limited to the exclusive use or enjoyment of, and right to contributions and earnings in respect of, the limited common property but excludes any proprietary interest; “Minister” means the Minister charged with the responsibility for local government; “certified strata plan” has the meaning assigned to it in section 4 of the Strata Titles Act 1985; “developer”—

    1. in relation to a development area, means any person or body of persons, by whatever name described, who develops any land for the purpose of residential, commercial or industrial use, or a combination of such uses; and
    2. in relation to a subdivided building or land, includes the original proprietor of the lot before the subdivision,

    and includes the executors, administrators and successors- in-title and permitted assigns of such person or body of persons, and in a case where the person or body of persons is under liquidation, includes such person or body appointed by a court of competent jurisdiction to be the provisional liquidator or liquidator; “purchaser” means the purchaser of a parcel and includes any person or body who has acquired an interest as a purchaser in the parcel or any person or body for the time being registered as a parcel owner in the register of parcel owners under subsection 30(1); “proprietor” has the meaning assigned to it in section 4 of the Strata Titles Act 1985; “original proprietor” has the meaning assigned to it in section 4 of the Strata Titles Act 1985; “parcel owner” means the purchaser or the developer in respect of those parcels in the development area which have not been sold by the developer; “Registrar” has the meaning assigned to it in section 4 of the Strata Titles Act 1985; “Director” has the meaning assigned to it in section 4 of the Strata Titles Act 1985; “occupier” means the person in actual occupation or control of the parcel or land parcel, but, in the case of premises for lodging purposes, does not include a lodger; “registered property manager” means a property manager registered under the Valuers, Appraisers and Estate Agents Act 1981 [Act 242]; “management corporation” means the management corporation which comes into existence under the Strata Titles Act 1985; “subsidiary management corporation” means the subsidiary management corporation which is created under the Strata Titles Act 1985; “Commissioner” means the Commissioner of Buildings appointed under subsection 4(1), and includes any Deputy Commissioner and other officers appointed under subsection 4(1) to exercise the powers or perform the duties imposed on the Commissioner; “parcel”— in relation to a building intended for subdivision, means one of the individual units comprised therein, which (except in the case of an accessory parcel) is to be held under a separate strata title; in relation to a land intended for subdivision, means one of the individual units of land parcels which is to be held under a separate strata title; in relation to a subdivided building, means one of the individual units comprised therein, which (except in the case of an accessory parcel) is held under a separate strata title; and in relation to a subdivided land, means one of the individual units of land parcels which is held under a separate strata title; “accessory parcel” has the meaning assigned to it in section 4 of the Strata Titles Act 1985; “land parcel” has the meaning assigned to it in section 4 of the Strata Titles Act 1985; “local authority”—

    1. means any local authority established or deemed to have been established under the Local Government Act 1976;
    2. in relation to the Federal Territory of Putrajaya, means the Perbadanan Putrajaya established under the Perbadanan Putrajaya Act 1995 [Act 536];
    3. in relation to the Federal Territory of Labuan, means the Perbadanan Labuan established under the Perbadanan Labuan Act 2001 [Act 609];
    4. in relation to the Federal Territory of Kuala Lumpur, means the Commissioner of the City of Kuala Lumpur appointed under section 4 of the Federal Capital Act 1960 [Act 190]; and
    5. includes any person or body of persons appointed or authorized under any written law to exercise and perform the powers and functions which are conferred and imposed on a local authority under any written law;

    “Tribunal” means the Strata Management Tribunal established under Part IX; “by- laws” means the by-laws which are in operation in respect of the building or land intended for subdivision into parcels or the subdivided building or land, and the common property as—

      1. prescribed by the regulations made under section 150 for regulating the control, management, administration, use and enjoyment of the building or land intended for subdivision into parcels or the subdivided building or land, and the common property; or

    provided for in any additional by-laws made under section 32, 70 or 71;

    “share units” has the meaning assigned to it in section 4 of the Strata Titles Act 1985; “aggregate share units” means— in relation to a building or land intended for subdivision into parcels, the sum of the allocated share units of the parcels or proposed parcels, including a provisional block, in a development area; or in relation to a subdivided building or land, the sum of the share units of the parcels, including a provisional block, as shown in the strata register prepared and maintained by the Registrar under the Strata Titles Act 1985; “provisional share units” has the meaning assigned to it in section 4 of the Strata Titles Act 1985; “allocated share units” means the share units assigned to each parcel intende for subdivision by the developer’s licensed land surveyor or in a case wdhere share units have not been so assigned, means the share units assigned under section 8.

Construction of the Act

  1. This Act shall be read and construed with the Strata Titles Act 1985 and the subsidiary legislation made under that Act in so far as they are not inconsistent with the provisions of this Act or the regulations made under this Act.

Part II

ADMINISTRATION OF THE ACT

Appointment of Commissioner of Buildings, deputies and other officers

    1. The State Authority may, in respect of a local authority area or any other area, appoint an officer to be known as the Commissioner of Buildings and such number of Deputy Commissioners of Buildings and other officers as may be necessary for the purpose of administering and carrying out the provisions of this Act.
    2. The appointment of the Commissioner of Buildings, any Deputy Commissioner of Buildings and other officer under subsection (1) shall be made by notification in the Gazette.
    3. Subject to any general or special direction of the State Authority which is not inconsistent with the provisions of this Act, the Commissioner shall have charge of the administration of this Act and may perform such duties as are imposed and may exercise such powers as are conferred upon him by this Act or any other written law.
    4. Subject to any general or special direction of the Commissioner which is not inconsistent with the provisions of this Act, any powers conferred on and duties to be performed by the Commissioner under this Act or any other written law may be exercised or performed by any Deputy Commissioner or other officer appointed under subsection (1).
    5. The Commissioner may, in relation to any particular matter, delegate in writing all or any of his powers or functions under this Act, except his power of delegation, to any public officer or officer of any local authority.
    6. Any delegation under subsection (5) may be revoked at any time by the Commissioner and shall not prevent the Commissioner from exercising the powers or performing the functions delegated.

Part III

DEALINGS IN BUILDING OR LAND INTENDED FOR

SUBDIVISION INTO PARCELS

Application of this Part

    1. This Part shall apply to any sale of a parcel by a developer on or after the commencement of this Act.
    2. For the purpose of this Part, a developer shall be deemed to have sold a parcel or proposed parcel in a development area if by an agreement in writing or by any deed or instrument, conditional or otherwise, the developer has agreed to sell, convey, transfer, assign or otherwise dispose of its interest in the parcel or proposed parcel to another person for valuable consideration or otherwise.

Schedule of parcels to be filed with the Commissioner before sale of any parcel

    1. A developer of any building or land intended for subdivision into parcels in a development area shall not sell any parcel or proposed parcel unless—
      1. a schedule of parcels showing the proposed share units of each parcel or proposed parcel and the total share units of all the parcels has been filed with the Commissioner under this Part; and
      2. in the case of any phased development, the schedule of parcels filed with the Commissioner shows the proposed quantum of provisional share units for each provisional block.
    2. In the case of any phased development, the developer shall also not sell any parcel or proposed parcel in any provisional block unless the developer has filed with the Commissioner an amended schedule of parcels showing the proposed allocation of the provisional share units among the new parcels in the provisional block.
    3. A schedule of parcels filed under subsection (1) or an amended schedule of parcels filed under subsection (2) shall—
      1. comprise a location plan, storey plan and delineation plan as specified in section 8a of the Strata Titles Act 1985;
      2. show a legend of all parcels, all common properties and all accessory parcels, and in the case of accessory parcels, specify in the legend the parcels they are made appurtenant to;
      3. contain a certificate by the developer’s licensed land surveyor that the buildings or land parcels shown in the schedule of parcels or amended schedule of parcels, as the case may be, are capable of being subdivided under the provisions of the Strata Titles Act 1985;
      4. contain a certificate by the developer’s architect or engineer that the buildings or land parcels to be constructed in accordance with the approved plans and specifications and any amendments to the plans and specifications under the Street, Drainage and Building Act 1974 [Act 133] and any by-laws made under that Act, prepared by the developer’s architect or engineer, are capable of being subdivided under the provisions of the Strata Titles Act 1985; and
      5. contain such other details as may be specified by the Commissioner.
    4. The proposed share units of each parcel or proposed parcel as shown in the schedule of parcels filed with the Commissioner under subsection (1), and the proposed allocation of the provisional share units among the parcels in a provisional block as shown in the amended schedule of parcels filed with the Commissioner under subsection (2) shall be deemed to be the allocated share units assigned to each parcel for the purpose of Part IV of this Act, until such time as the share units of each parcel have been approved by the Director pursuant to section 18 of the Strata Titles Act 1985.
    5. A copy of the schedule of parcels or an amended schedule of parcels, as the case may be, filed with the Commissioner under this Part shall be—
      1. exhibited at all times in a conspicuous position in any office and branch office of the developer and at such place where sale of a parcel is conducted; and
      2. submitted to the Director in any application for subdivision of building or land under the provisions of the Strata Titles Act 1985.
    6. Any developer who fails to comply with subsection (1), (2) or (5) commits an offence and shall, on conviction, be liable to a fine not exceeding five hundred thousand ringgit or to imprisonment for a term not exceeding five years or to both.
    7. Any person who—
      1. knowingly makes or produces or causes to be made or produced any false or fraudulent certification that purports to comply with the requirement of paragraph (3)(c) or (d); or
      2. negligently makes or produces or causes to be made or produced any false certification that purports to comply with the requirement of paragraph (3)(c) or (d) ,

      commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding two hundred and fifty thousand ringgit or to both.

Part IV

STRATA MANAGEMENT BEFORE EXISTENCE OF

MANAGEMENT CORPORATION

Chapter 1

General

Application of this Part

    1. Subject to Part V, this Part shall apply to a development area where before or after the commencement of this Act—
      1. vacant possession of a parcel in the building or land intended for subdivision into parcels has been delivered by the developer to a purchaser; and
      2. at the time of delivery of vacant possession of the parcel, the management corporation has not come into existence.
    2. In this Part, “developer’s management period” means the period commencing from the date of delivery of vacant possession of a parcel to a purchaser by the developer until one month after the establishment of the joint management body or such other time as may be extended by the Commissioner.

Allocated share units

    1. Where the sale of a parcel by a developer was made before the commencement of this Act and no share units have been assigned to each parcel by the developer’s licensed land surveyors, the share units for each parcel shall be assigned by any person or body who has a duty or is responsible under this Part to maintain and manage any building or land intended for subdivision into parcels and the common property in accordance with the formula set out in the First Schedule, and such assignment shall be deemed to be the allocated share units of each parcel when the assignment is filed with the Commissioner.
    2. The allocated share units assigned to each parcel by the developer’s licensed land surveyors or the share units for each parcel assigned pursuant to subsection (1) shall be deemed to be the allocated share units assigned to each parcel for the purpose of this Part until such time as the share units of each parcel have been approved by the Director pursuant to section 18 of the Strata Titles Act 1985.

Chapter 2

Management by developer before joint management body is established

Duties and powers of developer during developer’s management period

    1. Subject to the provisions of this Act, a developer shall, during the developer’s management period, be responsible to maintain and manage properly any building or land intended for subdivision into parcels and the common property.
    2. Without prejudice to the generality of subsection (1), the duties of the developer during the developer’s management period shall be as follows:
      1. to determine and impose the Charges to be deposited into the maintenance account;
      2. to determine and impose the contribution to the sinking fund to be deposited into the sinking fund account;
      3. to effect insurance according to this Act;
      4. to comply with any notice or order given or made by the local authority or any competent public authority requiring the abatement of any nuisance on the common property, or ordering repairs or other work to be done in respect of the common property or other improvements to the common property;
      5. to prepare and maintain a register of all parcel owners of the buildings or lands intended for subdivision into parcels;
      6. to ensure that the accounts required to be maintained by the developer under this Act are audited and to provide audited financial statements for information to all purchasers;
      7. to enforce by-laws; and
      8. to do such other things as may be expedient or necessary for the proper maintenance and management of the buildings or lands intended for subdivision into parcels and the common property.
    3. The powers of the developer during the developer’s management period shall be as follows:
      1. to collect the Charges from the parcel owners in proportion to the allocated share units of their respective parcels;
      2. to collect the contribution to the sinking fund from the parcel owners;
      3. to authorize expenditure for the carrying out of maintenance and management of the buildings or lands intended for subdivision into parcels and the common property;
      4. to recover from any parcel owner any sum expended by the developer in respect of that parcel in complying with any such notice or order referred to under paragraph
        (2)(d); and
      5. to do all things reasonably necessary for the performance of its duties under this Act.
    4. During the developer’s management period—
      1. the developer shall ensure that a separate and distinct area is set aside out of the common property of the development area for the sole purpose of an administration office for the carrying out of duties of the developer under this Act; and
      2. the developer shall not enter into any contract relating to the maintenance and management of a building or land intended for subdivision into parcels and the common property in the development area for any period after the expiration of the developer’s management period.
    5. Any developer who fails to comply with subsection (1), (2) or (4) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

    Developer to establish maintenance account

      1. A developer shall open one maintenance account in respect of each development area with a bank or financial institution—
        1. if vacant possession of a parcel was delivered before the commencement of this Act, on the date of the commencement of this Act; or
        2. if vacant possession of a parcel is delivered after the commencement of this Act, at any time before the delivery of vacant possession,

        but in any case, before the Charges are collected from the purchaser of any parcel in the development area.

      2. Each maintenance account shall be operated and maintained by the developer until the expiry of the developer’s management period.
      3. The developer shall deposit into the maintenance account—
        1. the Charges received by the developer from the purchasers in the development area; and
        2. the Charges to be paid by the developer in respect of those parcels in the development area which have not been sold,

        and all such moneys shall be deposited into the maintenance account within three working days of receiving the moneys.

      4. Notwithstanding any other written law to the contrary, all moneys in the maintenance account shall—
        1. not form part of the property of the developer;
        2. be held in trust for the purchasers; and
        3. only be used by the developer solely for the purpose of meeting the actual or expected general or regular expenditure necessary in respect of the following matters:
          1. maintaining the common property in good condition on a day-to -day basis;
          2. paying for the expenses incurred in providing cleaning services for the common property, security services and amenities for the occupiers of the building;
          3. paying any premiums for the insurance effected under this Act;
          4. complying with any notice or order given or made by the local authority in respect of periodical inspection of any building in the development area in the manner as specified in the Street, Drainage and Building Act 1974;
          5. minor painting work on premises of the common property;
          6. carrying out inspection of all electrical wiring systems of the common property and replacing or repairing any faulty wiring system, if any;
          7. carrying out inspection, maintenance and repair of the main water tanks;
          8. paying rent and rates, if any;
          9. paying any fee incurred for the auditing of the accounts required to be maintained by the developer under this Act;
          10. paying all charges reasonably incurred for the administration of the accounts required to be maintained by the developer under this Act as may be determined by the Commissioner;
          11. paying the remuneration or fees for the managing agent appointed under Part VI;
          12. paying any expenses, costs or expenditure in relation to the procurement of services, including the engagement of consultants, legal fees or costs and other fees and costs, properly incurred or accepted by the developer in the performance of its functions and the exercise of its powers under this Act; or
          13. meeting other expenses of a general or regular nature relating to the maintenance and management of the building or land intended for subdivision into parcels and the common property.
      5. In the event that—
        1. the developer enters into any composition or arrangement with his creditors or has a receiving order or an adjudication order made against him; or
        2. the developer, being a company, goes into voluntary or compulsory liquidation,

        the moneys in the maintenance account shall vest in the administrator, official receiver, trustee in bankruptcy or liquidator, as the case may be, to be applied for all or any of the purposes for which moneys in the maintenance account are authorized to be applied under this Act.

      6. Any money remaining in the maintenance account, after all payments have been properly made under this Act, shall be held by the administrator, official receiver, trustee in bankruptcy or liquidator, as the case may be, and shall be transferred into a maintenance account in the name of the joint management body.
      7. Any person who fails to comply with subsection (1), (2), (3), (4), (5) or (6) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

    Developer to establish sinking fund account

      1. A developer shall open one sinking fund account in respect of each development area with a bank or financial institution—
        1. if vacant possession of a parcel was delivered before the commencement of this Act, on the date of the commencement of this Act; or
        2. if vacant possession of a parcel is delivered after the commencement of this Act, at any time before the delivery of vacant possession,

        but in any case, before the contribution to the sinking fund is collected from the purchaser of any parcel in the development area.

      2. Each sinking fund account shall be operated and maintained by the developer until the expiry of the developer’s management period.
      3. The developer shall deposit into the sinking fund account—
        1. the contribution to the sinking fund received by the developer from the purchasers in the development area; and
        2. the contribution to the sinking fund to be paid by the developer in respect of those parcels in the development area which have not been sold by the developer,

        and all such moneys shall be deposited into the sinking fund account within three working days of receiving the moneys.

      4. Notwithstanding any other written law to the contrary, all moneys in the sinking fund account shall—
        1. not form part of the property of the developer;
        2. be held in trust for the purchasers; and
        3. be used by the developer solely for the purpose of meeting the actual or expected capital expenditure necessary in respect of the following matters:
          1. the painting or repainting of any part of the common property;
          2. the acquisition of any movable property for use in relation to the common property;
          3. or the renewal or replacement of any fixture or fitting comprised in any common property.
      5. In the event that—
        1. the developer enters into any composition or arrangement with his creditors or has a receiving order or an adjudication order made against him;
        2. or the developer, being a company, goes into voluntary or compulsory liquidation,

        the moneys in the sinking fund account shall vest in the administrator, official receiver, trustee in bankruptcy or liquidator, as the case may be, to be applied for all or any of the purposes for which moneys in the sinking fund account are authorized to be applied under this Act.

      6. Any money remaining in the sinking fund account, after all payments have been properly made under this Act, shall be held by the administrator, official receiver, trustee in bankruptcy or liquidator, as the case may be, and shall be transferred into a sinking fund account in the name of the joint management body.
      7. Any person who fails to comply with subsection (1), (2), (3), (4), (5) or (6) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

    Developer to establish sinking fund account

      1. A developer shall open one sinking fund account in respect of each development area with a bank or financial institution—
        1. if vacant possession of a parcel was delivered before the commencement of this Act, on the date of the commencement of this Act; or
        2. if vacant possession of a parcel is delivered after the commencement of this Act, at any time before the delivery of vacant possession,

        but in any case, before the contribution to the sinking fund is collected from the purchaser of any parcel in the development area.

      2. Each sinking fund account shall be operated and maintained by the developer until the expiry of the developer’s management period.
      3. The developer shall deposit into the sinking fund account—
        1. the contribution to the sinking fund received by the developer from the purchasers in the development area; and
        2. the contribution to the sinking fund to be paid by the developer in respect of those parcels in the development area which have not been sold by the developer,

        and all such moneys shall be deposited into the sinking fund account within three working days of receiving the moneys.

      4. Notwithstanding any other written law to the contrary, all moneys in the sinking fund account shall—
        1. not form part of the property of the developer;
        2. be held in trust for the purchasers;
        3. and be used by the developer solely for the purpose of meeting the actual or expected capital expenditure necessary in respect of the following matters:
          1. the painting or repainting of any part of the common property;
          2. the acquisition of any movable property for use in relation to the common property;
          3. or the renewal or replacement of any fixture or fitting comprised in any common property.
      5. In the event that—
        1. the developer enters into any composition or arrangement with his creditors or has a receiving order or an adjudication order made against him;
        2. or the developer, being a company, goes into voluntary or compulsory liquidation,

        the moneys in the sinking fund account shall vest in the administrator, official receiver, trustee in bankruptcy or liquidator, as the case may be, to be applied for all or any of the purposes for which moneys in the sinking fund account are authorized to be applied under this Act.

      6. Any money remaining in the sinking fund account, after all payments have been properly made under this Act, shall be held by the administrator, official receiver, trustee in bankruptcy or liquidator, as the case may be, and shall be transferred into a sinking fund account in the name of the joint management body.
      7. Any person who fails to comply with subsection (1), (2), (3), (4), (5) or (6) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

    Purchaser and developer to pay Charges, and contribution to sinking fund.

      1. Each purchaser shall pay the Charges, and contribution to the sinking fund, in respect of his parcel to the developer for the maintenance and management of the buildings or lands intended for subdivision into parcels and the common property in a development area.
      2. The developer shall pay the Charges, and contribution to the sinking fund, in respect of those parcels in the development area which have not been sold, being a sum equivalent to the Charges, and contribution to the sinking fund, payable by the purchasers to the developer had the parcels been sold.
      3. The amount of the Charges to be paid under subsections (1) and (2) shall be determined by the developer in proportion to the allocated share units of each parcel.
      4. The amount of contribution to the sinking fund to be paid under subsections (1) and (2) shall be a sum equivalent to ten per cent of the Charges.
      5. The purchaser shall, within fourteen days of receiving a notice from the developer, pay the Charges, and contribution to the sinking fund, to the developer and if any sum remains unpaid by the purchaser in respect of his parcel at the expiry of the period of fourteen days, the developer may recover the sum in the manner set out in section 34.
      6. If any sum remains unpaid by the purchaser in respect of
        his parcel at the expiry of the period of fourteen days specified in subsection (5), the purchaser shall pay interest at the rate of ten per cent per annum on a daily basis.
      7. Any purchaser who is not satisfied with the sums determined by the developer under subsection (3) or (4) may apply to the Commissioner for a review and the Commissioner may—
        1. determine the sum to be paid as the Charges, or contribution to the sinking fund; or instruct the developer to appoint, at the developer’s own cost and expense, a registered property manager to recommend the sum payable as the Charges,
        2. or contribution to the sinking fund, and submit a copy of the registered property manager’s report to the Commissioner.
      8. Upon receiving the report under paragraph (7)(b), the Commissioner shall determine the sum payable as he thinks just and reasonable, and any sum so determined by the Commissioner shall be deemed to be the sum payable as the Charges, or contribution to the sinking fund.
      9. Any developer who fails to comply with subsection (2) commits an offence and shall, on conviction, be liable to a fine not exceeding twenty thousand ringgit or to imprisonment for a term not exceeding three years or to both and, in the case of a continuing offence, to a further fine not exceeding five thousand ringgit for every day or part thereof during which the offence continues after conviction.

    Prohibition on collection of moneys before accounts are opened.

      1. No person shall at any time collect any Charge, or contribution to the sinking fund from any purchaser for the maintenance and management of any building or land intended for subdivision into parcels and the common property unless—
        1. a maintenance account and a sinking fund account have been opened in respect of the development area;
        2. and vacant possession of the parcel purchased by the purchaser has been delivered to the purchaser.
      2. Notwithstanding subsection (1), any developer of a development area which has been completed on or before the commencement of this Act and has, immediately before that date, been collecting moneys from the purchasers for the maintenance and management of any building or land intended for subdivision into parcels and the common property comprised in the development area, may continue to do so until the joint management body is established, provided that all moneys shall be collected and dealt with by the developer in accordance with this Act.
      3. Any person who fails to comply with subsection (1) or (2) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

    Duties of developer in relation to accounts

      1. A developer shall, in respect of the maintenance account and the sinking fund account—
        1. cause to be prepared such accounts and records of accounts as will sufficiently explain the transactions of the accounts and enable true and fair balance sheet, income and expenditure statement and profit and loss statement to be prepared for the period starting from the commencement of the developer’s management period;
        2. appoint an approved company auditor to carry out the audit of the accounts annually and the accounts shall be—
          1. in the case where moneys are to be transferred under paragraph 15(1)(a), audited up to the date of the actual transfer; and
          2. in the case where the accounts are to be presented at the first annual general meeting of the joint management body, audited up to a date not earlier than three months before the meeting;
        3. file with the Commissioner a certified true copy of the audited accounts together with the auditor’s report within fourteen days of the accounts being audited; and
        4. permit the Commissioner or any person authorized by the Commissioner in writing to act on its behalf full and free access to the accounts and records of accounts and to make copies or extracts of such accounts and records of accounts.
      2. Notwithstanding subsection (1), the Commissioner shall have, at any time, the right to appoint an approved company auditor to investigate the accounts and records of accounts specified in subsection (1), and the developer shall pay all the expenses incurred for that purpose.
      3. The developer shall furnish to the Commissioner or any public authority such returns, reports, accounts and information with respect to its activities and finances as the Commissioner may, from time to time, require or direct.
      4. The returns, reports, accounts and information referred to in subsection (3) shall be in such form as the Commissioner may, from time to time, specify.
      5. Any developer who fails to comply with subsection (1), (2), (3) or (4) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

    Handing over by developer to the joint management body

      1. A developer shall, before the developer’s management period expires—
        1. transfer all balances of moneys in the maintenance account and the sinking fund account, after payment of all the expenditure which have been properly charged to the accounts, to the joint management body;
        2. hand over to the joint management body—
          1. the administration office set up by the developer under paragraph 9(4)(a);
          2. the audited accounts of the maintenance account and the sinking fund account or, if such accounts have not been audited, the unaudited accounts;
          3. all the assets of the development area;
          4. all records relating to and necessary for the maintenance and management of the buildings or lands intended for subdivision into parcels and the common property of the development area; and
          5. all invoices, receipts and payment vouchers in respect of the maintenance account and sinking fund account.
      2. If only unaudited accounts have been handed over under subparagraph (1)(b)(ii), the developer shall, not more than three months after the expiry of the developer’s management period, hand over to the joint management body the audited accounts up to the date of transfer of the balances of moneys referred to in paragraph (1)(a).
      3. Without prejudice to the generality of subparagraph (1)(b)(iv), the developer shall deliver to the joint management body copies of all of the following documents:
        1. all approved plans for buildings or lands intended for subdivision into parcels relating to the development area;
        2. any document in the developer’s possession that indicates, as far as practicable, the actual location of any pipe, wire, cable, chute, duct or other facility for the passage or provision of systems or services, if the developer has reason to believe that the pipe, wire, cable, chute, duct or other facility is not located as shown on an approved plan or an approved amended plan;
        3. all contracts entered into by the developer in respect of the maintenance or management of any building or land intended for subdivision into parcels and the common property comprised in the development area;
        4. a copy of the schedule of parcels or the amended schedule of parcels filed with the Commissioner under subsection 6(1) or (2), if applicable, or a copy of the proposed strata plan filed with the Director under the provisions of the Strata Titles Act 1985, if any;
        5. the names and addresses of such contractors, subcontractors and persons who supplied labour or materials to the development area during the construction of any building or land intended for subdivision into parcels and the common property comprised in the development area;
        6. all warranties, manuals, schematic drawings, operating instructions, service guides, manufacturer’s documentation and other similar information in respect of the construction, installation, operation, maintenance, repair and servicing of any common property, including any warranty or information provided to the developer by any person referred to in paragraph (e);
        7. the register of all parcel owners of the buildings or lands intended for subdivision into parcels; and
        8. the original copy of all insurance policies effected under this Act.
      4. Any developer who fails to comply with subsection (1), (2) or (3) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both and, in the case of a continuing offence, to a further fine not exceeding five thousand ringgit for every day or part thereof during which the offence continues after conviction.

    Balances not transferred shall vest in joint management body

      1. If any balance of moneys in the maintenance account and in the sinking fund account has not been transferred by the developer under paragraph 15(1)(a), the moneys shall vest in the joint management body on the date of the expiry of the developer’s management period.
      2. remedy of the joint management body, including those rights in respect of any legal proceedings or applications to any authority by the developer pending immediately before the expiry of the developer’s management period.
      3. Any judgment or award of any arbitral or other tribunal obtained by a developer in respect of the Charges, contribution to the sinking fund and any other assets of the maintenance account and the sinking fund account, and not fully satisfied before the expiry of the developer’s management period shall be enforceable by the joint management body.

    Chapter 3

    Management by joint management body

    Establishment of a joint management body

      1. A joint management body shall be established upon the convening of the first annual general meeting of that joint management body—
        1. if vacant possession was delivered before the commencement of this Act, not later than twelve months from the commencement of this Act; or
        2. if vacant possession is delivered after the commencement of this Act, not later than twelve months from the date of delivery of vacant possession of a parcel to a purchaser.
      2. The joint management body established by subsection (1) shall be a body corporate having perpetual succession and a common seal.
      3. The joint management body may sue and be sued in its name.
      4. The joint management body shall comprise the developer and the purchasers.
      5. If the management corporation comes into existence before the first annual general meeting of the joint management body specified in subsection (1) is convened—
        1. the first annual general meeting shall not be required to be convened and no joint management body shall be established for that development area; and
        2. the provisions in Part V of this Act shall apply to the development area.

    Duty of developer to convene first annual general meeting of joint management body

      1. It shall be the duty of the developer to convene the first annual general meeting of the joint management body within the period specified in subsection 17(1).
      2. Any developer who fails to comply with subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
      3. The developer shall give written notice of the first annual general meeting of the joint management body to all purchasers not less than fourteen days before the meeting, and a copy of such written notice shall be displayed at a conspicuous part of the development area.
      4. The developer shall prepare and place before the first annual general meeting of the joint management body for consideration an annual budget that sufficiently sets the expected and estimated expenditure required to properly maintain and manage the buildings or lands intended for subdivision into parcels and the common property which shall be for a period of twelve months starting on the first day of the month following the date of the first annual general meeting.
      5. If the developer fails to convene the first annual general meeting of the joint management body within the period specified in subsection 17(1), the Commissioner may appoint any person to convene the first annual general meeting of the joint management body within such time as may be specified by the Commissioner, and the developer shall pay all the expenses incurred for that purpose.

    First annual general meeting of joint management body

      1. The agenda for the first annual general meeting of the joint management body shall include the following matters:
        1. to determine the number of members of the joint management committee and to elect the members of the joint management committee;
        2. to consider the annual budget prepared by the developer under subsection 18(4);
        3. subject to subsections 25(2) and (3), to determine the amount to be paid by a parcel owner as the Charges, and contribution to the sinking fund;
        4. to determine the rate of interest payable by a parcel owner in respect of any late payment of the Charges, or contribution to the sinking fund, by the parcel owner;
        5. to consider the audited accounts specified in subparagraph 14(1)(b)(ii);
        6. to confirm the taking over by the joint management body of insurances effected by the developer under this Act;
        7. to make additional by-laws; and
        8. to consider any other matter connected with the maintenance and management of the common property of the building or land intended for subdivision into parcels.
      2. If within half an hour after the time appointed for the meeting no purchaser entitled to vote turns up or all the purchasers present, for any reason, refuse to be members of the joint management committee, the developer or the person appointed by the Commissioner to convene the meeting shall, within seven days of the date of the meeting inform the Commissioner of the fact and the Commissioner may—
        1. appoint a new date for the election of the joint management committee;
        2. or appoint a managing agent under Part VI to maintain or manage the buildings or lands intended for subdivision into parcels and the common property comprised in the development area.

    Duty of joint management body to inform its name to Commissioner

      1. A joint management body shall inform and register with the Commissioner the name of the joint management body within thirty days from the date of the first annual general meeting.
      2. The Commissioner may, upon an application by the joint management body, issue a certificate certifying that the joint management body has been duly established under this Act on the day when the first annual general meeting was convened.
      3. The constitution of the joint management body under this Act shall not be affected in the event that the first annual general meeting is subsequently invalidated or the provision of subsection 19(1) is not complied with or a situation under subsection 19(2) occurs.

    Duties and powers of joint management body

      1. The duties of a joint management body shall be as follows:
        1. to properly maintain and manage the building or land intended for subdivision into parcels and the common property, and keep it in a state of good and serviceable repair;
        2. to determine and impose the Charges to be deposited into the maintenance account for the purpose of the proper maintenance and management of the buildings or lands intended for subdivision into parcels and the common property;
        3. to determine and impose the contribution to the sinking fund to be deposited into the sinking fund account for the purpose of meeting the actual or expected expenditure specified under subsection 24(2);
        4. to effect insurance according to this Act or to insure against such other risks as the parcel owners may by special resolution direct;
        5. to comply with any notice or order given or made by the local authority or any competent public authority requiring the abatement of any nuisance on the common property, or ordering repairs or other work to be done in respect of the common property or other improvements to the common property;
        6. to prepare and maintain a register of all parcel owners of the buildings or lands intended for subdivision into parcels;
        7. to ensure that the accounts required to be maintained by the joint management body under this Act are audited and to provide audited financial statements for the information to its members;
        8. to enforce the by-laws; and
        9. to do such other things as may be expedient or necessary for the proper maintenance and management of the buildings or lands intended for subdivision into parcels and the common property.
      2. The powers of the joint management body shall be as follows:
        1. to collect the Charges from the parcel owners in proportion to the allocated share units of their respective parcels;
        2. to collect the contribution to the sinking fund from the parcel owners;
        3. to authorize expenditure for the carrying out of the maintenance and management of the buildings or lands intended for subdivision into parcels and the common property;
        4. to recover from any parcel owner any sum expended by the joint management body in respect of that parcel in complying with any such notice or order as referred to in paragraph (1)(e);
        5. to purchase, hire or otherwise acquire movable property for use by the parcel owners in connection with their enjoyment of the common property;