Resolution prohibiting non-resident proprietors from serving in the management committee set aside

It has been a year since I last wrote about standard procedures for strata property management. The catchphrase “Malaysia Boleh” and its altered meaning were used to describe the sentiments felt in the way these properties were sometimes managed. On the forefront, the Court of Appeal made a landmark decision on 4th October 2019 prohibiting the Joint Management Body (JMB) period from applying different rates of maintenance charges in mixed developments. Thereafter, the Federal Court rejected an application for the right to appeal this decision on 21st May 2020.

Since the beginning of 2020, our country has undergone significant changes, including the outbreak of the COVID-19 pandemic, the unexpected fall of the Pakatan Harapan government, and the current economic and political instability.

As we continue our daily routines, certain problems persist in the world of strata. While this issue might not be significant enough to grab headlines, it still affects the fundamental rights of property owners, which must be upheld as sacrosanct.

Rights of proprietors to be committee members

The Strata Management Act 2013 provisions protect these rights in strata title properties. The Act extends over a wide range of issues on management and communal living in stratified properties — and the authority to ensure that these are done following the law is the Commissioner of Buildings (COB). Owners can also opt to file their cases to the Strata Management Tribunal if the issues are under the purview of the Tribunal. Another recourse would be to seek the intervention of the courts.

Management committee members are usually elected to serve each term at the annual general meeting (AGM). The length of a term counts from one AGM to the next. Although this period can be up to 15 months apart, an AGM has to be held once every calendar year. After serving 3 consecutive terms, the committee members must rest for at least a term before standing for election again.

The second schedule of the Act contains the provisions for the Management Corporation (MC). Paragraphs 2 (7) and (9) set out the requirements of who can be eligible to serve as committee members, and paragraphs 8, 10 and 13 elaborate on the situations where they would not be eligible and the threshold number of members for a proprietor.

The candidate needs to be a proprietor or co-proprietor. A proprietor is a person or body with a registered strata title. An immediate family member of a proprietor who owns two or more parcels can also be nominated for election by that proprietor. All maintenance charges, sinking fund contributions and other dues must not be owed. A cut-off date is specified in the AGM or EGM pack. These are some of the essential requirements. (During the JMB period, the requirements are the same as those in the MC period, but there is no need to have strata titles.)

The statutory requirements for eligibility do not differentiate between resident and non-resident proprietors, i.e., those who stay in the development and those who don’t have the same rights to serve as committee members.

Resolution restricting non-resident proprietors

At last year’s Annual General Meeting at a condo, a resolution was proposed and passed stating that only resident proprietors can be elected as members of the Management Committee. The reason for this decision was that the management had difficulty getting enough MC members to attend the meetings and satisfy the required quorum and that those living in the development would better understand the condo’s issues. Interestingly, all the members elected that year were resident proprietors who had rallied hard to get into the committee. However, meeting attendance did not reflect the same level of enthusiasm.

A growing sense of dissatisfaction was spreading among the non-resident property owners regarding the resolution. It was not only a matter of violating their rights, but they also believed that the intention was to prevent them from having a say in how the property should be managed because of disagreements over management approaches.

A complaint was lodged with the Commissioner of Buildings (COB). Before this, two legal opinions were sought, which advised that the resolution would be invalid as it goes against the provisions of the Act. However, during the Annual General Meeting (AGM), the management argued in favour of the resolution, stating that an additional by-law could be created to permit only resident proprietors to serve on the committee.

The matter was investigated by COB, who issued a letter to the management. They referred to paragraphs 2(7) and 2(9) of the second schedule of the Act. They concluded that no exceptions or restrictions exist on non-resident proprietors serving as management committee members. Therefore, the resolution should be set aside.

Preferences for resident members can be shown by voting, but they cannot be enforced as a rule. A by-law created to serve their purpose was not consistent with the main body of the Act.

The management was required to inform proprietors of COB’s decision, and the outcome of this case would apply to joint management committees of the Joint Management Body.

Where do we go from here?

If there is an assumption that non-resident owners are better suited to be members of the Joint Management Committee or Management Committee, I beg to differ. Where they reside is simply a matter of location. What matters more is their passion and commitment to the work. With advanced social media technology, non-resident owners can easily stay up-to-date with the developments’ happenings. They may also live nearby or have experience managing other properties. Non-resident owners are even holding key positions in some properties. I hope the Commissioner of Building’s decision will lead to a paradigm shift to be more accepting of all owners in strata management.