Condo Owners Versus Management Firms
by K.W. Mak, The Star, 8 January 2007
kwmak@thestar.com.my
Condominiums are a statement of luxury, but behind the facade,
residents complain of the lack of services from their management
companies (MCs) while MCs complain that the residents who refuse to pay
management fees are the ones preventing such services from being
provided.
This "chicken and egg" scenario is causing a lot of dissent among
condominium property owners, so much so that a group of such affected
owners decided to form the Condominium, Apartment and High-rise
Committee (CAHC) to champion the rights of condominium owners.
There are no quick fixes to the problems, however, as residents who got
together to fight their issues discover numerous hurdles and obstacles
before them.
"There is a lack of transparency in the way things are done presently
and residents are tired of being taken for a ride," said CAHC pro tem
chairman Tengku Nazaruddin Zainuddin.
Arguments between residents and MCs are often the result of money
matters. Residents are already paying a premium on their service
charges and when such services are not up to expectations, complaints
would ensue.
Most MCs do not make the matter any easier to resolve because they do
not allow the management accounts and the sinking fund accounts to be
viewed, citing excuses that the accounts could not be shown.
"Don't let them cheat you. Withholding such accounts from residents is
a violation of the Housing and Development (Control and Licensing) Act
1966 that many MCs and condominium owners themselves are not aware of,"
said CAHC pro tem assistant chairman Khong Chee Seng.
Section 19 of the Act states that the developer shall provide the
purchaser with a copy of the Annual Audited Accounts for the expenses
incurred for the provision of the said services.
Section 20 (sub-clauses 3 and 4) meanwhile provides for the Sinking
Fund accounts to be made available to the purchaser.
CAHC through the residents associations has used this Act to apply for
the accounts from two MCs of condominiums located in Petaling Jaya and
Klang. However, they have yet to provide a copy to owners.
Part of the reason MCs do not want to disclose their accounts is the
fact that some of them charge management fees illegally.
Prior to the acquisition of the strata title, the developer is either
supposed to manage the condominium or outsource the management to
another person or corporation.
"Any person who undertakes property management practice is required by
law to register with the Board of Valuers, Appraisers and Estate
Agents," said Board of Valuers, Appraisers and Estate Agents registrar
R. Mahaletchumi in reply to a query on management fee charges.
"Nevertheless, if the condominium concerned has not been issued with
strata titles, then the developer may manage the condo himself,
provided he does not charge property management fees."
The right to charge such fees lies with those registered with the
Board, as stated in Section 21 of the Valuers, Appraisers and Estate
Agents Act 1981.
Developers who outsource the management to a third party must ensure
that the person or company is registered with the Board.
Tomorrow: Read the second part on the problem faced by condominium and
apartment owners in obtaining strata titles.