By:
Bryan Lui (Co-Managing Partner) [bryanlui@luibhullar.com]
Harneshpal Karamjit Singh (Co-Managing Partner) [harnesh@luibhullar.com]
Understanding Your Rights and Obligations as a Strata Property Owner
Owning a strata property in Malaysia can be complex, with numerous rules, responsibilities, and rights that every owner should be aware of. If you're unsure about your rights and obligations, this guide will provide you with the essential information you need, with insights from a strata lawyer.
What is Strata Property?
Strata property refers to developments where buildings or land are divided into individual lots or "parcels." This includes high-rise residences such as apartments, condominiums, and townhouses. Strata properties also encompass gated and guarded communities with shared facilities like security, car parks, and recreational areas managed by a common entity.
Who is a Strata Property Owner?
A strata property owner can be:
The buyer of the property.
An individual eligible to receive rental income from the unit, such as a real estate agent or trustee.
The developer of unsold units within the development.
Unlike individual titles, where the land is solely owned by the purchaser, strata titles represent ownership of a specific unit while the land and common facilities are collectively owned by all strata owners or the developer.
Under the Strata Title Act 1985, developers must apply for strata titles on behalf of purchasers. Once issued, the strata title allows the owner to use and manage the property similarly to an individual title.
Managing and Maintaining a Strata Property
The management of strata properties is typically handled by a Management Corporation (MC), composed of unit owners elected by residents during the Annual General Meeting (AGM). The MC is responsible for enforcing rules, managing common areas, paying quit rent, obtaining insurance, and ensuring compliance with relevant laws and policies.
Before the MC is established, a Joint Management Body (JMB) manages the property. The JMB operates from the time of vacant possession until the formation of the MC, guiding owners through the management process.
If issues arise, such as dissatisfaction with management decisions or misuse of funds, owners can call for an Extraordinary General Meeting (EGM) or seek help from the Commissioner of Building (COB) or the Strata Management Tribunal (SMT).
Fees Strata Owners Must Pay
To maintain the property and its common areas, strata owners are required to pay several fees, calculated based on share units:
Maintenance Fee (Service Charge): Covers the cost of maintaining common facilities like swimming pools, elevators, and security services.
Sinking Fund: A reserve fund for future major repairs and upgrades, such as painting or structural repairs.
Failure to pay these fees may result in penalties, such as being listed as a defaulter, suspension of services, and restrictions on using common facilities.
Quit Rent and Parcel Rent
Strata properties are subject to two types of taxes:
Quit Rent (Cukai Tanah): A land tax paid to the Malaysian government through the Land Office.
Parcel Rent: Specific to strata properties, parcel rent is governed by the Strata Management Act (SMA) 2013 and the Strata Titles Act (STA) 1985. It applies to those with separate strata titles and is the responsibility of individual unit owners.
Empowering Strata Owners
Being informed and actively participating in AGMs and EGMs is crucial for strata property owners. Knowledge of your rights and responsibilities empowers you to make better decisions and ensures that your investment is well-managed and protected.
Consulting an SMA lawyer or a strata lawyer can help home buyers navigate the complexities of the Strata Management Act 2013, ensuring their rights and interests are protected.
Please contact us for a free consultation via WhatsApp (+60143000960) or E-mail (admin2@luibhullar.com) for any queries regarding Strata Management matters.
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