CRIMINALISING NON-PAYMENT OF SERVICE CHARGES

The Malaysian Strata Management Tribunal makes it a criminal offence on failure to comply with its award, including awards for non-payment of service charges or sinking fund contributions for high rises.

The Malaysian Strata Management Tribunal makes it a criminal offence on failure to comply with its award, including awards for non-payment of service charges or sinking fund contributions for high rises.

PrintMy brother-in-law, Jasbir from Singapore dropped by last Sunday and the topic turned to urban living, as many high-rise buildings in Malaysia was fast turning into urban slums, he pointed out. I quite agreed with him as I have noticed that although Malaysians have started living in stratified developments, yet the state of mind of many dwellers is still that of kampong or new village, namely, they want everything to be provided free. There is definitely a need for a paradigm shift in responsibility in regards to community living.

Fortunately, this freedom ‘not to pay service charges’ will come to an end with the establishment of the Strata Management Tribunal (SM Tribunal). Any parcel owner or tenant who fails to pay service charges can be produced before the SM Tribunal following the implementation of the Strata Management Act 2013, Strata Management (Maintenance & Management) Regulations 2015 and Strata Management (Strata Management Tribunal) Regulations 2015.

More importantly, any non-compliance of an award (decision) of SM Tribunal is now a criminal offence attracting a fine of up to RM250K, or up to 3 years’ in jail, or both. A claimant also has to decide in advance as to which forum he wants to file the claim because having filed a case in the SM Tribunal, he cannot then proceed to do the same in the courts or vice versa.

Tribunal Members

PrintPrintThe Tribunal shall be appointed by the Minister and consists of a chairman and deputy chairman picked from members of the Judicial and Legal Service; and at least 20 other members comprising current and former members of the Judicial and Legal Service as well as lawyers of at least 7 years’ standing. The appointment shall be for a period of 3 years.

Jurisdiction of Tribunal

The Tribunal shall have the power to hear and determine any claims not more than RM250K.

Among the claims that can be filed are as follows:

1. A dispute on the power conferred by the Strata Management Act 2013 or the by-laws.

2. A dispute on costs or repairs in respect of a defect in a parcel and its common property.

3. A claim for the recovery of Charges or contribution to the sinking fund.

4. A claim for an order to convene a general meeting.

5. A claim for an order to invalidate proceedings of meeting.

6. A claim for an order to nullify a resolution where voting rights have been denied or where due notice has not been given.

7. A claim for an order to nullify a resolution passed at a general meeting.

8. A claim for an order to revoke amendment of by-laws having regard to the interests of all the parcel owners or proprietors.

9. A claim for an order to vary the rate of interest fixed by the joint management body, management corporation or subsidiary management corporation for late payment of Charges, or contribution to the sinking fund.

10. A claim for an order to vary the amount of insurance to be provided.

11. A claim for an order to pursue an insurance claim.

12. A claim for compelling a developer, joint management body, management corporation or

Dato’ Pretam Singh Darshan Singh practises at Pretam Singh, Nor & Co in Kuala Lumpur.

subsidiary management corporation to supply information or documents.

13. A claim for an order to give consent to effect alterations to any common property.

14. A claim for an order to affirm, vary or revoke the Commissioner of Building’s decision.

The SM Tribunal is empowered to make the following awards:

1. Pay a sum of money to another party.

2. Order the refund of any money paid.

3. Order the payment of compensation or damages for any loss or damage suffered by a party.

4. Order the rectification, setting aside or variation of a contract or additional by-laws.

5. Order costs to or against any party to be paid.

6. Order interest to be paid on any sum or monetary award at a rate not exceeding 8% per annum.

7. Dismiss a claim which it considers to be frivolous or vexatious.

Persons entitled to file a claim:

a) a developer;

b) a purchaser;

c) a proprietor, including an original proprietor;

d) a joint management body;

e) a management corporation;

f ) a subsidiary management corporation;

g) a managing agent; and

h) any other interested person, with the leave of the Tribunal.

The filing fee is cheap, only RM20. You can request by e-mail the forms from the KPKT website.

Right to appear at hearings

At the SM Tribunal, no party shall be represented by a lawyer unless the

issue involves complex issues of law and severe financial hardship may be suffered by the party deprived of such legal expertise. The tribunal has full discretion to conduct proceedings in any manner it thinks fit to ascertain the facts and law. A company may be represented by a full-time paid employee.

Fast disposal of cases

The SM Tribunal shall make its award as soon as possible, in any case, within 60 days from the first day of the hearing. The award given are final and binding on all parties to the proceedings. It has the same effect as a court order and can be enforced accordingly by any party to the proceedings.

Any dissatisfied party can file an appeal at the High Court to challenge the award on the ground of serious irregularity which has caused substantial injustice to the applicant.

PretamDato’ Pretam Singh Darshan Singh practises at Pretam Singh, Nor & Co in Kuala Lumpur.

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