strata titles

STRATA TITLESSTRATA TITLESSharifah Zubaidah Syed Abdul Kader

LAW 3111- May 2013

Why Strata Title?Why Strata Title?

Why Strata Title?Why Strata Title?

Emphasis since mid-60’s on development of multi-storey buildings in response to urbanisation.

To enable individual flats or office units to be sold as conveniently as lots on land.

Strata: Horizontal SubdivisionStrata: Horizontal Subdivision

The idea of Strata Title is based on horizontal subdivision of a building, or of airspace, instead of normal vertical subdivision of land.

The Concept of Strata TitleThe Concept of Strata Title

The land and building(s) on it are divided into ‘parcels’ and ‘common property’.

Each parcel is an individual apartment for which a separate strata title is issued to the registered proprietor.

Each parcel may include a parking lot or storeroom which not be located within the same boundary as the parcel i.e. ‘accessory parcel’.

‘‘Parcel’ v ‘Common property’Parcel’ v ‘Common property’

All parts of the building and land that do not form part of an individual apartment make up the ‘common property’ for which a separate title is issued and held by the management corporation.

Legislative HistoryLegislative History

Before 1985, NLC had provisions for subdivision of buildings and the issuance of ‘subsidiary title’.

Ss.151-157, 161-163, 355-374.

These provisions proved inadequate.

Malaysia’s Strata Titles Act 1985 is modeled after New South Wales Conveyancing (Strata Titles) Act 1961 and Singapore Land Titles (Strata) Act(Cap.277) 1970.

Strata Titles Act 1985 (Act 318)Strata Titles Act 1985 (Act 318)

An Act to facilitate the subdivision of buildings or land into parcels and the disposition of titles and purposes connected.

Applies in Peninsular Malaysia and FT Putrajaya.

Has been amended 4 times. Latest in 2007.

s.5-To be read and applied with NLC.

TerminologyTerminology

‘parcel’ ‘common property’

One of the individual units comprised in a sub-divided building which is held under a separate strata title.

If subdivided land, one of the individual units of land parcel.

So much of the lot as is not comprised in any parcel (including any accessory parcel).

TerminologyTerminology

‘Accessory parcel’

Any parcel shown in the strata plan as an accessory parcel which is used or intended to be used in conjunction with a parcel.

A parking bay may either be an accessory parcel or common property depending on the strata plan and sale and purchase agreement.

TerminologyTerminology

The 2007 amendment now allows subdivision of land also to be issued with strata title. (See s.6)

Requirement – there must be a building on the land of not more than 4 storey high. This is to cater for the Gated Community type of development and ‘townhouses’.

‘land parcel’: a unit which is comprised therein a subdivided land on which there is a completed building of not more than 4 storey which is held under strata title.

Gated communityGated community

Application for Strata TitleApplication for Strata Title

General Requirements:1) There must be at least one building

with two or more storey. If a building is one storey, may subdivide into

land parcel.2) The land on which the building

stands must be alienated land.3) The land must be one lot held under

final title.

Who should apply?Who should apply?

Section 8(1):

The proprietor of the land who has sold or agreed to sell any parcel in such building.

Lee Wai Kin v Yulek S/B Lee Wai Kin v Yulek S/B [1986][1986]

Pf. purchased a flat in a block of buildings developed by the Dfs.

He had paid the purchase price and went into occupation.

Strata title to the flat had not been issued to the Pf.

Df had been demanding various sums of money from the Pf. For expenses to be incurred for applying for such title.

Lee Wai Kin’s Lee Wai Kin’s case:case:

Pf. applied to court to determine several questions.

Held:In view of s.8(1) STA, it was incumbent

upon the Df. (as proprietor of land) to apply for Strata Title to the flat on behalf of the Pf..

Pf. to pay the costs. Amount is the prescribed fee to be paid u-s.10(1)(a).

When to apply? (Mandatory)When to apply? (Mandatory)

See s.8(2):If sale and purchase agreement signed

BEFORE completion of building, must apply for ST 6 months after building is completed.

If sale and purchase agreement signed AFTER completion of building, must apply for ST 6 months after the date of the first unit sold.

Can the period to apply be Can the period to apply be extended?extended?

Yes.Under s.8(6), the Director of Lands and

Mines may extend the period once not exceeding 3 months.

Consequence of not applying?Consequence of not applying?

S.8(7) STA:Not making an application within the

prescribed period is an offence.Punishable with FINE of between

RM10,000 to RM100,000.For every day the offence continues –

RM100-RM1000 for each day.

Syed Azman v Lian Seng (KL) Syed Azman v Lian Seng (KL) Construction Co. S/B Construction Co. S/B [1992][1992]

Pf had purchased the 3rd floor of a proposed 5 storey building.

Building completed in 1973 and Pf paid the full purchase price u-the agreement.

Until the date of hearing, the strata title had not yet been delivered to the Pf.

Pf claimed specific performance i.e. immediate delivery of the strata title pursuant to the agreement.

Syed Azman’s Syed Azman’s case:case:

Df. argued, inter-alia, they were incapable of specifically performing the terms of the agreement as the 6 months period specified in s.8(2) STA had expired and no extension of such period had been made before its expiry.

HELD: (Lim Beng Choon, J.)HELD: (Lim Beng Choon, J.)

Df’s contractually and statutorily bound to apply for separate title for the property purchased by the Pf.

Upon payment of the fine stipulated u-STA, the Df as proprietor, could therefore apply to the Director for subdivision of the building and the Director could still deal with the application even after expiry of the 6 months period.

Court ordered the Df. to do the needful within 1 month of the judgment.

RESTRICTION ON DEALING WITH ACCESSORY PARCEL

See s. 69 STASee s. 69 STA

Where the approved strata plan shows that some portion of the development (i.e. a carpark, storeroom, etc) are to be taken to be ‘accessory parcel’, then neither the developer nor the parcel owner may deal with such accessory parcel or any interest therein separately from the parcel.

Doreen Tan Ying Ying v Chong Tet Doreen Tan Ying Ying v Chong Tet On On [1986] 1 MLJ 504[1986] 1 MLJ 504

Pf. Hd purchased 2 apartments from a developer.

Subsequently, she purchased the disputed parking bay from the same co.

Pf. later sold one of the apartments to the Df.

Found out that Df. Had been using the disputed parking bay.

Doreen Tan’s Doreen Tan’s case:case:

Pf. sought an injunction to restrain the Df. from using the said parking bay. Contended that she sold the apartment excluding the parking bay.

HELD: (HC)Pf’s application dismissed.Developer was not entitled in law to sell

the parking bay as a separate entity as it was an accessory parcel attached to the Df.’s apartment.

John Dennis De Silva v Crescent Court John Dennis De Silva v Crescent Court Management Corporation Management Corporation [2006] 3 MLJ [2006] 3 MLJ 631631

Pf=owner and resident of condo unit at Crescent Court.

Parked his car at bay 106.25/9/04-Pf’s car bearing the sticker of

Crescent Court was denied entry and right to park at bay 106 on the ground that he had not paid his monthly maintenance charges.

John Dennis’s John Dennis’s case:case:

Pf. sought interim injunction to restrain the Df from preventing the Pf from entering the condo complex in his car and preventing the Pf from parking.

Df averred that the parking bay was allocated to the Pf, not purchased by the Pf.

Pf brought evidence that he had contributed money to construct a roof over the parking bay and therefore he had proprietary interest in the parking bay.

HELD:HELD:

From the Strata Plan, the parking bays were common property.

The Pf had a proprietary interest in the parking bay as all owners of Crescent Court ‘owned’ the common property.

The act of the Df in preventing entry was ultra vires ss. 52,53,53A and 75 STA.

Plaza Pekeliling Management Corp. v Plaza Pekeliling Management Corp. v IGB Corp. Bhd. & Anor. IGB Corp. Bhd. & Anor. [2003] 1 MLJU [2003] 1 MLJU 216 (HC)216 (HC)

Justice Abd Malik Ishak:“common property meant that there was

no title to it because if there was title, then it was not a common property”

In this case, AHU Rooms, toilets, risers, roof top and carparks had been issued

with strata titles, thus were not considered ‘common property’.

Management CorporationManagement Corporation

Established upon opening of a Strata Register for the said strata scheme. (see s.39(1) STA)

Consists of all parcel proprietors.Is a body corporate that can sue and be

sued.U-s.42 STA, the MC is the proprietor of

common property and holds the IDT for the common property.

Roles and Responsibilities:Roles and Responsibilities:

Responsible for maintenance and management of common property in the scheme – lifts, corridors, swimming pool, etc.

Responsibilities of MC (see s.43, s.44(6), Third Schedule of STA,

54 STA).

s.43(1) STAs.43(1) STA

1) To manage and properly maintain the common prop. and keep it in the state of good and serviceable repair.

2) To insure and keep insured

te building or land to the replacement value agst fire and such other risks.

3) To comply with any notices or

orders made by any public/

statutory authorities requiring the abatement of nuisance on the

common property/ ordering

repairs, etc.

4) To comply with any such notices or orders given in respect of the parcels if the proprietor fails

to do so within a reasonable time.

5) To prepare and maintain a

strata roll for the sub-

divided building.

s.44(6) STAs.44(6) STA

6) To keep a record of the by-laws for the time being in force and to lodge a

certified true copy with the Commissioner of Buildings (COB)

33rdrd Schedule Schedule

7) To enter in the strata roll any intended change without delay.

8) To maintain in a state of good and serviceable repair the fixtures and fittings (including lifts) existing.

9) To establish and maintain suitable lawns and gardens on the common property.

10) To maintain repair and

where necessary, renew sewers, pipes, wires, cables and ducks existing on the lot.

11) To produce all policies of

insurance effected by the MC together with the

receipts to the proprietor/ chargee upon request.

s. 54s. 54

12) To display the name and address of the MC as shown in the book of the strata register at the main entrance for the lot

and to provide the post box.

RESPONSIBILITIES OF THE PARCEL PURCHASERS

Rights (s.35 STA) see also s.36Rights (s.35 STA) see also s.36

Other than rights of a proprietor under the NLC, parcel proprietors hv the following rights:

1) Right of support by the common property and other parcels.

2) Right of service – rights to passage and provision of water, sewage, drainage, gas, electricity, garbage, etc.

ResponsibilitiesResponsibilities

Parcel proprietors have the following responsibilities:

1) Ensure regular payment of the management fund.

2) To attend the AGM;3) Comply with any directive by the

authority relating to his parcel.

Management Fund (s. 45)Management Fund (s. 45)

To meet administrative expenses incurred for the purpose of controlling, managing and administering the common property.

Amount to be contributed by the parcel proprietors is determined at the AGM.

Non-payment of Management Non-payment of Management Fund by Parcel OwnersFund by Parcel Owners

S. 55A of the Building and Common Property (Maintenance and Management) Act 2007 provides this to be an offence where upon conviction can be fined not more than RM5000 and additional RM50 per day for any delay in the contribution after conviction.