ON April 12,2007 the Building & Common Property (Maintenance & Management) Act 2002 (,,the

Aet") came into force in all Staies within Peninsular Malaysia. The main purpose of the Act is to

provide for the proper maintenance and management of buildings and the.common property, AFTER delivery of vacant possession by the developer to the purchasers and BiFORE the
Management corporation ("MC") comes into existence ("the applicable period,,).

Scope of the Act

The Act is intended to apply to any building or land intended for subdivlsion into parcels, and which have been developed for the purpose of accommodaiion, including accommodation for commercial and industrial use. Do not be misled by the word "accommodation". All stratified

properties, including low-cost flats, apartments, condominiums, town houses, shopping complexes, industrial buildings, shop offices and gated communities, fall under the BCpMM Act.
The Act defines common property, more exhaustively than the Strata Tifles Act (STA) and the
Schedule H agreement under the Housing Development (Control & Licensing) Regulations 1989 (Scheduie H). In the STA, common property rneans so much of the lot as is not comprised in any parcel. Schedule H extended this definition to include lifts, refuse chutes, drains, sewers, pipes, wires, cables, ducts and all facilities and installations used in common by ail purchasers.

Common property in the Act is now extended to include all structural elements of the building, stairs, stairways, fire escapes, entrances and exits, corridors, Iobbies, exterior of all common
parts of the building, playing fields and recreational areas, walls and fences. Under the Act, for ihe stratified properties, besides the developers, buyers (parcel owners) and management corporations (MC) three new bodies were introduced to implement proper building maintenance, namelv
the joint management body (JMB),

the commissioner of buildings (COB) and managing agent (MA).

The role and responsibilities of developers of stratified properties are limited to only one year. After that a JMB must be formed to manage and maintain the common property until the issuance
of strata titles and formation of the MC.

The eOE is a new authority established by ihe Government to oversee and enforce the Act. The

COB

is also responsible for adjudicating all

coB,

recovery procedures againsi errant parcel

owners. Usually the

is headed by the president of the local council.

What is JMB
Joint Management Body to enable Purchasers and Developer to jointly manage the buildings and common properties before the issuance of strata tittles and formation of Manaqement eorporation.

. . . o '

A body corporate under common seal

Right to sue and to be sued in its name Comprises of the Developer and the purchasers Duty of Developer to convene the first JMB meeting Until formation of JMB, the Developer is responsible for maintenance and management which includes the responsibility to insure the building against fire and other risks.

[section 4 of the Act]

First Meeting of JMB (section 6)

' ' ' ' ' .

Election of the office bearers of the Committee. (Joint Management Committee) To confirm the taking over by the Body of insurances effected by the developer. To determine the amount to be paid by the purchasers to the Building Maintenance Fund for the maintenance and management of the common property of the building. To determine the rate of interest payable by a purchasers in respect of late payment of charges.

Any matter connected with the maintenance and management of the property of the building. (Ref : Sect 6(1))
Quorum
Tt of the purchasers who have paid maintenance charges to the Building Maintenance Account (members entitled to vote) Joint purchasers (e.9. husband and wife) are not entitled to vote except by a jointly appointed proxy constitute the quorum if one hour still no member turns up or refuse to be office bearers Developer to notjfy the Commissioner who may :appoint a new date or appoint a managing agent to maintain the common property

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if within lz an hour no quorum, the members entitle to vote who are present shall

lf the first meeting is successful, then within 28 days thereafter the JMB must inform the COB the name of the JMB and register it with the COB.

f{ofe'" It would appear

that the developer

is

not to be included

in

the determination

of

the quorum

and is also not a person entitted to vote. It is not crear whether:

(a) a purchaser is entitled to vote if he had previously paid maintenance charges

to

the BMA

but is at the time of the first meeting in arrears;

or

('E;tctt^, il*l.trio.,,, /{...'...n I )

(b) a purchaser who has not

paid maintenance charges to the BMA is entitled to attend the

meeting or be elected to the JMC, even though he is not entitled to vote.

Duties of the JMB [section 8(1) of the Act]

a)

b)

c)
d) e)

0 g)
h)

i)

buildings; and To do such other things as may be expedient or necessary for the proper maintenance and management of the building.

financial statements for the information to the purchasers: To enforce house rules for the proper maintenance and management of the

To properly maintain the common property and keep it in a state of good and serviceable repair; To determine and impose charges that are necessary for the repair and proper maintenance of the common property; To insure and keep insured the building to the replacement value of the building against fire and such other risks as may be determined by the Body; To apply-insurance moneys received by the Body in respect of damage to the building for the rebuirding and reinstatement of that buirding; To comply with any notices or orders given or made by thJlocal authority or any competent public authority 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 other improvements to the property; To prepare and maintain a register of all purchasers of ihe buildino: To ensure that the Building Maintenance fund is audiied and to pioviOe audited

Power of JMB shalt include [Section 8(2)]

management of the common property. To recover from any purchaser any sum expended by the Body in respect of that parcel in complying with any such notices or orders as referred to under paragraph (1Xe); d) To purchase, hire or othen,rise acquire movable or immoveable property for use by the purehasers in connection wiih their enjoyment of the common property; e) To arrange and secure the services of any person or agent to undertake the maintenance and management of the common property of the building; 0 To make house rules for the proper maintenance and management oithe

a) To collect from the purchasers maintenance and management charges in proportion to the allocated share units of their respective parcels: b) To authorize expenditure for the carrying out of tire maintenance and

c)

buitding; and

g) To do alt things reasonably necessary for the performance of its duiies under this A^+
nut.

Anr:ual General Meeting

The AGM of the JMB shall be held once a year and not more than '15 months shall elapse between date of one AGM and the next AGM. The agenda is to consider the BMF and transacr such other businesses as mav arise.

Extraordinary General Meeting (EGM)

An EGI\ll may be convened by the JMB, upon:-

'

requisition in writing made by persons who are registered as purchasers of at leasr onequarter of the total number of parcels, or

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when the JMB receives a direction from the Commissioner to transact a particular business, or

on such other occasion as the JMB thinks fit.

The Commissioner may himself, authorise any purchaser to convene an EGM if he is satisfied that the JMB was not properly constituted.

lrlofe:

Act made provisions for rules to regulate the first meeting of the JMB, there are no provisions on how an AGM or EGM is fo be conducted and it is nof clear whether fhe ru/es on quorum and voting rights for the first meeting of the JMB wiil appty to an AGM
The

or EGM"

House rules

The JMB is required to keep a record of house rules in force and to furnish to a purchaser a copy of such rules or make the rules available for inspection to any person who has a proper interest.

A eopy of the rules and amendments thereto must be lodged with the Commissioner.

Joint Management Committee (JMC)

It performs the Body's duties and conduct the Body's business on its behalf, and may for that purpose exercise any of the Body's power.

The committee shallconsist of; the developer not less than 5 and not more than 12 purchasers who shall hold office for a period not exceeding 3 years or untilthe dissolution of the Body, (when the MC comes into existence) whichever earrier
A chairman, a secretary and a treasurer shall be elected from members of the
JMC.

Sinee the developer is a member of the JMC, its representative can be elected to anv of the above three positions.

Proceedings of the JMC are regulated by the First Schedule of the Act and a member elected shall continue to be a member of the JMC until he resigns, dies, becomes a bankrupt or is no
Ionger a purchaser.

lrfofe"'

in the JMC even though the developer has no right to vote at the first meeting of the JMB.

The developer has a vote

Dissolution of JMB . deemed dissolved 3 months from the 1"' meeiing of Management Corporation (section

.
1)

15)

JMB to hand over to the Management Corporation

Section 41 (Strata Titles Act 1985)

lt shall be the duty of the original proprietor to convene the first annual general meeting of the management corporation within 1 month after the expiration of the initial period. lf the original proprietor fails to comply with subsection (1), he shall be guilty of an offence and shall be liable on conviciion to a fine not exceeding RM25,000.0C ind io a further fine not exceeding RM2000 for each day the offence continue to be committed. "initial period"
in relation to a management corporation, means the period commencing on the day on which the management corporation is formed and ending on the day on which there are proprietors, excluding the proprietor of the lot who is registered as a proprietor of a parcel or parcels or a provisional block or blocks the sum of whose share units is at least one-quarter of the aggregate share units.

2)

Seetion 2 (Strata Titles Act 198S)

Seetion 15(2) the Act

"

The Body shall(a) Not later than 1 month from the date of the first meeting of the management

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. ' -

have no, been audited, the unaudited accounts; all assets and liabilities of the Body; records related to and necessary for the maintenance of the buildinq and its common property; and

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(b) if only unaudited accounts have been handed over under subparagraph (a) (ii); not later than 3 months from the date of the first meeting of the mJnagement corporation, hand over to the management corporation the audited accounts of the Bodv.

' '

lf the Body fails to comply with this section, every member of the Body commits an offence and shall, on conviction, be liable to a fine not exceeding RMi0 000;AND Shall also be liable to a furiher fine not exceeding RMl000 for every day during which the offence is continued after conviction [Section 15(3)]

Section 15(4) the Act

FXCEPTION: a) Where an offence under this section has been committed by the JMB, every member of the JMB shall be deemed to have also committed that offence unless, having regard to all the circumstances, he provesb) that the offence was committed without his knowtedge, consent or connivance;

c)

and

that he had taken all reasonable precautions and had exercised due diligence to prevent the commission of the offence.

Building Maintenance account " Section 16(1)

Developer to open and maintain Building Mainienance Account. (BMA)

'

The BMA shall be opened in the name of the development area with a bank or financial
institution licensed under Banking and Financial lnstitutions Act 1g8g or regulated by the Central Bank under any other written law.

Section 17(1)
A developer shall deposit into the BMA-

a)

all charges received by him from the purchasers in the development area for the maintenance and management of the common property of the development area;
and

b) all charges for the maintenance and management of the common property to be paid by the developer in respect of those parcels in the development area which
has not been sold, being a sum equivalent to the maintenance charges payable by the purchasers to the developer had the parcels been sold.

Section 17(2)

The developer shalla) cause proper accounts of the BMA to be kept in respect of all sums of money received from and all payments made out of the Account;

b)

appoint a professional auditor to audit the Account annually or in the case of where money to be transferred undersubsection 19(3), 1 month before the date of actual transfer:

Building Maintenance Fund (section 22)

o o o o o

Developer shall within one month from the establishment of JMB transfer all surplus money in the BMA to a fund known as Building Maintenance Fund to be maintained bv JMB BMF to be used for purpose solely set out in 522(3) Purchaser to pay maintenance charges within 14 days of notice

Unpaid charges shall be subject to inierest at such rate but not exceeding 10% per
annum.

JMB to maintain a sinking fund to be determined from time to time bv the JMB for actual or expected liabilities (a) the painting or repainting of any part of the common propefi;
(b) the acquisition of any movable property for use in relation to the common property;

(c) the renewal or replacement of any fixture or fitting comprised in any common propeny;
OT

(d) any other expenditure as the Committee deems necessary Managing Agent (section 25) o To be appointed by the Commissioner if
No JMB or. Jd'C is

ilnestablished

Commissioner sbtisfied that maintenance and management is not carried out by Developer or
the JMB properly

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o o

Agent shall enier into management agreement with the Developer or JMB Agent shall be paid remuneration / fees as agreed in the management agreement with the concurrence of the Commissioner and the remuneration shall be charged to the Building Maintenance Account or Building Maintenance Fund (as the case may be)

o
. . ' '

rndepend

elffi

pec u niary i nte rest i n ". into parcels. any building or land intended for subdivision

::f :#ii ,il:

fffJ|[?:3:,H:i
JI

Responsible for the design or consiluction of the building He or his nominee has material interest in the building He is a partner or in employment of a person who has material interest in the building or land He or his family holds any interest in the building or land whether directly or as trustee or othenruise.

[Agent to lodge a bank bond with the Commissioner to make good any loss caused by the agentl (section 27)J

Powers and duties of the Managing Agent

- section

2g

. . . .

control over the moneys in the Building Maintenance Account or Building

Maintenance Fund Exercise the duties and powers of maintenance and management as if he was acting as the Developer or the JMB Deposit money into BMFund within 2 days of receipt Submit statement to Commissioner not later than 1 monih from appointment moneys standing in the credit of the BM account / FUnd amount due & owing from Purchaser income derived from common property to be paid to the BMA/BMFund any sums accrued for maintenance & management and payable but remains unoaid

[Appointment of the Managing Agent does not relieve the Developer of his obligation towards the Purchaser to carry out repairs to the common property, to make good any defects, shrinkage or faults in the common property during the deiect liability-periodl

Deposit and Recovery of Charges (section 31) Deposit

Upon handing over vacant possession, Developer to deposit in cash or bank guarantee

with the Commissioner (amount to be determined by State Authority) for the purpose of carrying out work to rectify defects in the common property of development lf deposit insufficient the COB may direct the Developer to deposit further sum Any unexpended deposit to be refunded to Developer upon expiry of defect liability period Failure to complv -offence

Recovery of charges by JMB (section 32)

Purchaser to pay charges within 14 days from the date of service of notice by JMB Failure to pay issue + another notice for 14 days from the date of service of notice by JMB

il

. r

institute legal proceeding in any coud to recover the sum or take action under S33 - (6 months airears ) go for warrant of attachment of movable property of Purchaser found in the parcel or elsewhere within the local authority area [(Form B) issued by Commissioner]

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conviction.

also an offence to refuse to pay charges; on conviction fine not exceeding RM5000-00 and further fine of RM50.00 for every day of the offence continuing after

fUote;

All provisions relating to payment and recovery refer only to payment by the purchasers and there are no provisions for recovery irom a developer who fails to pay charges for unsold units, A warrant of attachment may not be issued against a developer who is in arrears, as only a purchaser's movable property can be attached.

hJote:

Any person who, without reasonable excuse, fails or refuses to pay maintenance and management charges shall be liable to a fine not exceeding RM5,00O and a further fine not exceeding RM50 for every day during which the offence is continued after conviction. What mav

constitute a reasonable excuse not to pay, remains to be seen.

Miscellaneous (Section 3546)

Notice may be served or deemed to have been served by servrng a copy personally , by registered post to the last known address of business, pircel or residence of the person or attaching the notice at the a prominent part of the last known address of business, parcel or residence of the person to be served lf aggrieved by the act or decision of the COB, appeal to the State Authority within 14 days of notice of the decision or action and ihereafier the decision of State Authority shall be final and not to be questioned in any court [Section 41] Further Regulations to be made under this Act

Power of Entry by Commissioner to inspect and investigate Service of Notice or order lsection 371

Act shall prevail over contracts, deeds and written law

(section 44)

On the coming into force of the Act in the respective local authority area any written law, contracts or deed existing which are contrary to the provision of this Act shall cease to
have effect.

Contracting out prohibited (section 45)

CANNOT CONTRACT OUT OF THIS ACT AND THE PROVISIONS OF THIS ACT

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