strata titles

04/11/23 Ainul Jaria Maidin -LAW 3111-03 1

STRATA TITLES- STRATA TITLES- titles for subdivided buildingstitles for subdivided buildings


What is a strata title

Strata title is an IDT issued in respect of a subdivided building. It is similar to the IDT issued in respect of a subdivided land.


Need for strata title

Post independence economic development and social restructuring brought about the influx of rural communities into urban settlements.

This cause pressure on the existing housing and increased the demand for housing and proper infrastructure.

The need for proper housing brought about the government policy to promote various types of housing projects.


Pressure on the existing land resources were felt. Furthermore, there is a need to provide affordable housing for the low income earners since land in urban areas were getting expensive.

The government decided to build high rise building to promote organised development.


Law Governing Strata Titles

The Strata Titles Act 1985 (Act 318/85) came into effect on 1 June 1985. STA is applicable only to the West Malaysian states. Modeled after the New South Wales Strata Titles Act 1973 and the Singapore Land Titles (Strata) Act

In Sarawak –Sarawak Strata Titles Ordinance 1974 (No.3 of 1974)

In Sabah – Sabah Land (Subsidiary Title) Enactment 1972 (No.9 of 1972)


It repealed the former strata provisions in the NLC 1965 which governed strata projects, including applications for subdivision of multi-storey buildings and the subsequent issuance of strata titles which were formerly called 'subsidiary titles'

It came into effect on 1st of June 1985 vide PU (B) 276/85.

In Faber Merlin (M Sdn. Bhd. & Ors. V Lye Thai Sang Wan Suleiman FJ said, “ It is not in dispute that strata title have as yet never been issued in this country, and that no strata titles exist.”


Weaknesses of STA The STA is a relatively short statute; it contains

only 85 sections, four schedules and a few prescribed forms.

Inadequacies in the STA at times, make interpretation of some of its provisions difficult to comprehend. A glaring example of such shortcomings would be the lack of minute provisions to regulate party walls.

This could, in turn, lead to a reliance on common law principles on this issue. At times, professionals whose sphere of work is related to the provisions of the STA have to resort to self-improvisation.


Application of NLC 1965 Certain shortcomings in the STA may be

resolved by resorting to the provisions of the NLC.

The STA is an extension of the NLC. Section 5 of the STA has expressly stated that the STA shall be read and construed with the provisions of the NLC as if it were a part of the NLC. However, where the provisions and rules contained in the NLC are inconsistent with those of the STA, the strata provisions shall prevail


NLC 1965 provisions

This Act is modeled after Conveyance (Strata Titles) Act 1961.

See the statutory definitions of the terms 'subsidiary register' and 'subsidiary title' in s 5 of the NLC.


See also Ch 4 of Pt 9 (ss 151-157); Ch 2 of Pt 10 (ss 161-163) and Ch 1 to Ch 4 of Pt 25 (ss 355-374) of the NLC. Those former provisions in the NLC which governed, inter alia, applications for subdivision of high-rise buildings and the issuance of subsidiary (strata) titles as well as strata development have since been repealed by s 83 and the Fourth Schedule of the STA.


No subsidiary or strata title has, ever been issued under the 1965 experimental provisions which governed the subdivision of multi-storey buildings, the 'subsidiary register' and the issuance of 'subsidiary titles' in respect thereof


Application of NLC 1965 provisions

Section 5(2) of STA expressly stipulates that: 'The National Land Code and the rules made thereunder, in so far as they are not inconsistent with the provisions of this Act or the rules made thereunder, or are capable of applying to [strata] parcels, shall apply in all respects to [strata] parcels held under strata titles.'


The relevant provisions on 'alienation' are contained in ss 76 to 82 of the NLC. Section 76(d), in particular, imposes a mandatory duty on the State Authority to specify one of the three categories of land use for the piece of land which has been approved for alienation. Implied conditions which affect land subject to any of the three specified categories of land use are found in ss 114 to 119


The meaning and nature of strata titles

It was once remarked that strata titles are 'titles in the sky'. This is to express a strata concept which is somewhat different from the conventional form of titles which relate to landed properties. It is true that conventional land titles do relate to agricultural land, dwelling houses and low-rise shop houses and factories. Such land titles relate to the respective 'surface' areas of the landed properties which are demarcated by their boundary lines.


This system of issuance of conventional land titles is in compliance with Pt 5 NLC which deals with the disposal of State land via its alienation by the State Authority

Strata titles, on the other hand, are synonymous with 'cubic' spaces which are to be built skywards and the issuance of strata titles will be governed mainly by the provisions of STA. But registrable dealings in strata parcels are regulated by the registration provisions of NLC


Nature of strata titles Similar to conventional land titles. In both

instances, the titles, both the issue and register documents of title, can be issued only by the relevant Registrar of Titles or, as the case may be, the Land Administrator and no one else.

If land titles or strata titles are issued by any unauthorized persons or person, such titles will be nothing more than forgeries. They will not be marketable and will not pass good titles to their possessors nor their purchasers, notwithstanding that the purchasers are bona fide persons and have purchased for value.


Other than this observation, it may be said that all register copies of land titles and strata titles which have been properly issued under the hand and official seal of the relevant Registrar of Titles or the Land Administrator are guaranteed by the State under one of the fundamental principles of Torrens land law.


Application for Subdivision of Building

Part II STA S.6 STA- Buildings capable of Being

Subdivided Conditions for Subdivision of Building

into parcels to be held under strata titles or into accessory parcels

a. Any building or buildings having one, two or more storeys

b. Building built on alienated land


a. held as one lot under final title or qualified title. In 1996 Amendment STA provided that land held under qualified title which has been duly surveyed and in respect of which a certified plan has been approved by the Director of Survey as also capable of being applied for subdivision.


Compulsory Application for Subdivision of Building

The compulsory application is to be made under two circumstances:

Pursuant to s. 151A (2)(c)(I)NLC 1965 where it is provided that the application for subdivision must be made within 6 months from the date of completion of the building.


S. 8(1) STA the proprietor need to apply for subdivision only if he has at any time sold or agreed to sell any parcel in such building to any person.

The Director for Land and Mines can pursuant to s.8(5) STA extend the time to make application once.

Failure to apply –offence Punishment –fine RM5000 and RM1000

per day as continuing offence.


Cases Lee Wai Kin v Yulek Sdn. Bhd. [1986] 2

MLJ 417 – It is the proprietor of the land who applies for strata titles

Syed Azman Bin Syed Mohamed v Lian Seng Construction Co. Sdn Bhd [1992] 2 MLJ 842 – HC held that failure to comply with time limits stipulated in s8(2) &(4) does not mean that the court cannot compel the proprietor of the land concerned to apply for subdivision of the building so as to obtain strata title.


Esther Tan Wooi Hong & Ors v Saujana Holding Sdn Bhd & Ors [1997]3 CLJ 79

The High Court held that failure to comply with the time limits stipulated in ss (2) & (4) does not mean that the court cannot compel the proprietor of the land concerned to apply for subdivision of the building so as to obtain strata titles for the parcels therein.


Although the proprietor would be considered as having committed an offence under ss(5), upon payment of the fine stipulated therein, he could still apply for subdivision of the building to the Director of Lands and Mines or the Land Executive Committee, as the case may be, who still has the power under ss(1) to deal with such application.

In the circumstances, the contention of the proprietor that it was too late for the court to order him to apply for subdivision of the building was rejected. The onus is on the proprietor of any alienated land upon which there is a completed building capable of being subdivided to apply for strata titles.


Submission of Application for Subdivision

Pursuant to s.10 STA the following must be fulfilled

The prescribed application fees A proposed strata plan comprising of location

plan, storey plan in respect of each building containing such details prescribed in s. 10(4) &s. 10(6)

For a case relating to the responsibility for payment of charges and expenses incurred in applying for strata title, see Lee Wai Kin v Yulek Sdn Bhd [1986] 2 MLJ 417.


The certificate of license of land surveyor that the building is wholly situated in the land.

The certificate of a registered architect that the building is in accordance with the approved building plans.

A written consent from every person who is holding a registered interest in the land

The issue document of title to the land is not in the possession of the chargee or lienholder.


The registered architect certification that the building is in accordance with the approved building plans.

The subdivision would not be contrary to any written law

The subdivision would not be contrary to any restrictions in interests

The proposed share units assigned to the parcels by the proprietors of the lot are equitable


No items of land revenue is remaining unpaid

Written consent from all interest holders on land are obtained

Each of the proposed parcel has adequate means of access not passing through another parcel


Conditions for Approval Director of L&M or the LEC will only

approve the application if it is satisfied that the conditions in s. 9 STA are satisfied

A licensed land surveyor has certified that the buildings are situated in the boundaries of the land

Permission from the relevant local authority


Processing of applications for Strata Titles


Application is made to the Land Administrator, who upon being satisfied that the documents are in order will forward the application to the Director of Survey.

Director of Survey will forward the application to the Director of L&M or LEC for approval.


Approval by Director of Land & Mines


The Director of L&M will approve the application if all the conditions stipulated in s. 9& s.10(1) STA are fulfilled.

He will instruct the Director of Survey to prepare the Certified Strata Plan


Issuance of Strata Titles


The copies of the certified strata plan will be forwarded to the Director for L&M or the LEC who shall direct the Registrar of Titles to issue the separate strata title for the subdivided building in accordance with the provisions of s.5&6 STA


Problems in applying & processing of Strata Titles applications


Problems of the building encroaching onto a road or over other roads. It is important for the building to be situated within the boundary of the land

Minor changes carried out to the building after approval of the building plan has been obtained. The plans must be resubmitted for approval thus, this will cause further delay in making the application


REGISTRATION OF STRATA TITLES

S.15 - Preparation and maintenance of strata register

The Registrar shall prepare and maintain for the purposes of this Act a register of strata titles to be known as the strata register.


Definitions Definitions


Parcels In relation to a subdivided by building

means one of the individual units comprised therein which is held under separate strata title.


Accessory Parcels

means any parcel shown in a strata plan as an accessory parcel which is used or intended to be used in conjunction with a parcel eg. Car parks


Common Property


COMMON PROPERTY Means so much of the lot as is not

comprised in any parcel (including any accessory parcel) or any provisional block as shown in an approved strata plan


Golden Connection S.B. v CSH Enterprise Sdn Bhd [1995] 3 MLJ 731 – issues as to whether a void (empty space) above ground level was common property within the meaning of STA. HC-held that it was common property as the void on the level of the mezzanine floor was capable of being used in connection with the enjoyment of more than one parcel ie.by both the mezzanine floor owner as well as the ground floor owner.


See Faber Merlin (M) Sdn Bhd & Ors v Lye Thai Sang & Anor [1985] 2 MLJ 380.


MANAGEMENT CORPORATIONMANAGEMENT CORPORATION

A body established to manage the affairs of the building and any other related aspects


Establishment of MC S.39 STA -upon the opening of a book of the

strata register in respect of a subdivided building a MC consisting of all the parcel proprietors including in the case of phased development, the proprietor of the provisional block or blocks must be established

The MC is not subject to the Companies Act 1965 (Act 125) nor the Societies Act 1966 (Act 335) as it is not established pursuant to either of these Acts but ‘upon the opening of a book of the strata register’


NAME OF MC

The MC shall be known by the name appearing in the book of the strata register relating to a subdivided building, and shall be a body corporate having perpetual succession and a common seal


MC BODY CORPORATE

The MC may apply to the Registrar for a certificate certifying that the MC is a body corporate constituted under this Act on the day specified in the certificate


MC can sue or be sued The capacity to sue or be sued is not only

confined to contracts made by the MC. Eg. MC can sue a person who has converted the corporation’s personal property or damaged the common property to recover the property or damages. In doing so, the MC must turn to the general law to find its cause of action in any action instituted by it.


In RSP Architects Planners & Engineers v Ocean Front Pte Ltd and anor appeal [1996] 1 SLR 113, the management corporation successfully sued the developers of the condominium for faulty construction of certain areas of the common property. The Singapore CA held that as the management corporation has certain rights and obligations with respect to the common property under the Singapore Land Titles (Strata) Act and any breaches or failure to perform any of the duties imposed by the same Act, would entitled it to bring and maintain the present action under the Singapore equivalent of ss (3) above against the developers for damages.


As to the cause of action which the MC had against the developers, the Court of Appeal made it clear that it had none in contract. This was because the benefit of the relevant clauses in the sale and purchase agreements was intended to govern the relations only between the developers and their purchasers, as the developers clearly did not intend to benefit the subsequent purchasers down the line.


Despite this, the MC could still recover its losses because it had a cause of action in tort. The degree of proximity between the developers and MC was sufficient to give rise to a duty on the part of the developers to take care to avoid causing to the MC the kind of damage the latter had sustained.


Conversely, in Black v Body Corporate Strata Plan No 4304 (unreported), referred to in Body Corporate Strata Plan No 4304 v Albion Insurance Co Ltd [1982] VR 699, a person has a cause of action against the MC for damage or injury arising out of its failure to maintain the common property properly.

In Black’s case, the plaintiff obtained damages against the MC for injuries he suffered as a result of a fall from an external stairway forming part of the common property. His fall was caused by the defective condition of a handrail fitted to the stairway which was a concealed danger known to the MC but not to him.


Council of Management Corporation

The MC shall elect a council which, subject to any restriction imposed or direction given by the MC at a general meeting, shall perform the MC’s duties and conduct the MC’s business on its behalf, and may for that purpose exercise any of the MC’s powers.


Duties and Powers of MCS.43 STA


Duties of MC (a) to manage and properly maintain the common

property and keep it in a state of good and serviceable repair;

(b) to insure and keep insured the subdivided building to the replacement value thereof against fire and such other risks as may be prescribed under this Act;

(c) to effect such other insurance of the subdivided building as may be required by law;

(d) to insure against such other risks as the proprietors may by special resolution direct;


e) to apply insurance moneys received by it in respect of damage to the subdivided building in rebuilding and reinstating it in so far as it may be lawful to do so, subject to any order made by the court under section 56;

(f) to pay premiums on any insurance; (g) to comply with any notices or orders in or

made by any competent public or statutory authorities 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 any building or other improvements on the lot;


(h) to comply with any such notices or orders made in respect of any of the parcels, if the proprietor fails to do so within a reasonable time;

(i) to prepare and maintain, in such form as may be prescribed, a strata roll for the subdivided building; and

(j) to pay the rent of the lot.


In Proprietors of Strata Plan No 6522 v Furney [1976] 1 NSWLR 412, Needham J held that the power and duty of the MC extended to the addition of such things as draught resistors and waterproof flashings in order to make the common property waterproof. He also held that the word repair in the New South Wales Act 1973 s.68(1)(b) (equivalent to s.l(1)(a)) clearly included renewal and making good of that which was not initially sound.

This was followed in Simons v Body Corporate Strata Plan No 5181 [1980] VR 103, a case from the Australian state of Victoria.


Holland J in Jacklin & Ors v Proprietors of Strata Plan No 2795 [1975] 1 NSWLR 15 that the management corporation cannot abdicate or diminish its statutory responsibility for the administration and maintenance of any part of the common property.

See also Allen v Proprietors Strata Plan No 2110 [1970] 3 NSWR 339.


However, where part of the common property has been granted by agreement to a parcel proprietor for his exclusive use and enjoyment thereof pursuant to by-law 3 of the Third Schedule, the MC may be relieved of its obligation to maintain and keep in a state of good and serviceable repair that part of the common property referred to above. As the case of Jacklin illustrates, much would depend on the construction of the terms of the grant itself.


Powers of MC (a) to recover from any parcel proprietor any sum

expended by the MC in respect of that proprietors parcel in complying with any such notices or orders

(b) to purchase, hire or otherwise acquire movable property for use by the parcel proprietors in connection with their enjoyment of the common property;

(c) to borrow moneys required by it in the exercise of its powers or the performance of its duties


(d) to secure the repayment of moneys borrowed by it and the payment of interest thereon by negotiable instrument or by a charge of unpaid contributions to the management fund, (whether already levied or not) by a charge of any property vested in it or by a combination of any of those means;

(e) to collect during the initial period by way of contributions from proprietors in proportion to the share units or provisional share units of their respective parcels or provisional blocks; and

(f) to do all things reasonably necessary for the performance of its duties under this Part and for the enforcement of the by-laws set out in the Third Schedule


Duties and powers of the original proprietor before the

establishment of the management corporation

S. 61 STA


(1) During the period before the MC comes into existence, it shall be the duty of the original proprietor—

(a) to control, manage, administer, and keep the common property in good repair;

(b) to pay the rent of the lot; (c) to insure the building to its replacement

value against fire and to keep it so insured; (d) to effect such other insurance policies

of the buildings as may be required by law;


(e) subject to any order made by a court of competent jurisdiction, to apply insurance moneys received by it in respect of damage to the building in rebuilding and reinstating the building, so far as it may be lawful to do so and to pay the premiums on any policy of insurance effected by it; and

(f) to perform any other function as may be necessary for the discharge of its duties.


Strata Titles Board - s 67A STA

There shall be a Strata Titles Board which shall consist of a President and such number of Deputy Presidents and other member