Four statutory orders issued by the Minister of Housing and
Local Government were gazetted on 23 June 2021. They are:
- Strata Management (Exemption to Developer) Order 2021("U.(A) 274/2021")
- Strata Management (Exemption to Commissioner of Buildings) Order 2021("U.(A) 275/2021")
- Strata Management (Exemption to Management Corporation) Order 2021("U.(A) 276/2021")
- Strata Management (Exemption to Joint Management Body) Order 2021("U.(A) 277/2021")
In essence, the aforesaid orders
("Orders") exempt the respective
stakeholders from compliance with certain provisions applicable to
them under the Strata Management Act 2013
("SMA"), subject to the applicable
condition(s) of exemption set out in the Orders being satisfied.
The Orders are deemed to have come into operation
from 18 March 2020 until 30 June 2021
("Relevant Period"), being the period
during which various movement control orders were imposed in
Malaysia to contain the outbreak of the Covid-19 pandemic.
The exemptions are discussed below.
P.U.(A) 274/2021 – Exemptions applicable to
the Developer
Provision |
Conditions of Exemption |
|
Section 10 SMA – Developer to establish maintenance account |
This section sets out, among others, the requirements for a developer to establish and operate a maintenance account |
If the developer's management period expires during the Relevant Period |
Section 11 SMA – Developer to establish sinking fund account |
This section sets out, among others, the requirements for a developer to establish and operate a sinking fund account |
If the developer's management period expires during the Relevant Period |
Paragraph 14(1)(c) – Duties of developer in relation to accounts |
This paragraph requires a developer to submit a certified true copy of the audited accounts and the auditor's report of the maintenance account and the sinking fund account to the Commissioner of Buildings ("COB") within 14 days of the accounts being audited. |
If the developer submits the certified true copy which need to be filed with the COB during the Relevant Period by 1 July 2021 |
Section 15 SMA – Handing over by developer to the joint management body ("JMB") |
This section provides for the handing over to the JMB of, among others, balances in the maintenance and sinking fund account |
If the developer's management period expires during the Relevant Period |
Subsection 18(1) SMA – Duty of developer to convene first annual general meeting ("AGM") of the JMB |
This subsection sets out the requirements for the developer to convene the first AGM of the JMB |
If the first AGM of the JMB which needs to be convened within the Relevant Period is convened by 1 July 2021 |
Paragraph 49(1)(b) SMA – Restrictions during preliminary management period |
This paragraph prohibits, amongst others, the developer from entering into maintenance and management contract which extends beyond the preliminary management period |
If:
|
Paragraph 50(1)(c) SMA – Developer to establish maintenance account in the name of management corporation ("MC") |
This paragraph requires the developer to open and maintain a maintenance account in the name of the MC under the circumstances set out in this paragraph |
If the developer establishes the maintenance account by 1 July 2021 |
Section 51 SMA – Developer to establish sinking fund account in the name of MC |
This paragraph requires the developer to open and maintain a sinking fund account at the same time when the developer is required to open and maintain the maintenance account under subsection 50(1) of the SMA |
If the developer establishes the sinking fund account by 1 July 2021 |
Paragraph 54(1)(c) SMA – Duties of developer in relation to accounts |
This paragraph requires the developer during the preliminary management period to file with the COB a certified true copy of the audited accounts together with the auditor's report within 14 days of the accounts being audited |
If the developer submits the certified true copy which need to
be filed with the COB during the Relevant Period by 1 July
2021 |
Section 55 SMA – Handing over of control to MC |
This section provides for the handing over to the management committee of the MC of, among others, the control of all balances in the maintenance account and sinking fund account |
If the developer's management period expires during the Relevant Period |
Subsection 57(1) SMA – Duty of developer to convene first AGM |
This subsection sets out the requirements for the developer to convene the first AGM of the MC |
If the first AGM of the MC which needs to be convened within the Relevant Period is convened by 1 July 2021 |
Subsection 92(1) SMA – Developer to pay deposit to rectify defects on common property |
This subsection sets out the requirements for the developer to pay a deposit with the COB for rectification of defects |
If the deposit which need to be paid to the COB within the Relevant Period is paid by 1 July 2021 |
P.U.(A) 275/2021 – Exemption applicable to the Commissioner of Buildings
Section 92 of the SMA requires a developer to pay a
deposit to the COB for the purpose of rectification of common
property defects. Sub-section (5) of section 95 requires the COB to
return the unexpended deposit to the developer on the expiry of the
defect liability period for the development area. P.U.(A) 275/2021
exempts the COB from the requirement in sub-section 5 subject to
the following conditions:
- the developer submits an application for the repayment of the deposit to the COB; and
- the COB is satisfied with the conditions of the common property before the deposit is refunded to the developer.
P.U.(A) 276/2021 – Exemptions applicable to the
Management Corporation
Provision |
Conditions of Exemption |
|
Paragraph 62(1)(c) SMA – Duties of MC in relation to accounts |
This paragraph requires the MC to file with the COB a certified true copy of the audited accounts together with the auditor's report within 14 days of the accounts being audited |
If the MC submits the certified true copy which need to be filed with COB during the Relevant Period by 1 July 2021 |
Paragraph 6 of the Second Schedule SMA – Power to employ agents and servants |
This paragraph gives the management committee power to employ agents and servants on a yearly basis in connection with the powers and duties of the MC. |
If:
|
Paragraph 10 of the Second Schedule SMA – AGM |
This paragraph provides the timeline within which the MC shall hold an AGM |
If the AGM which needs to be convened within the Relevant Period is convened by 1 July 2021 |
P.U.(A) 277/2021 – Exemptions applicable to the
Joint Management Body
Provision |
Conditions of Exemption |
|
Subsection 21(3) SMA – Duties and powers of JMB |
This subsection prohibits the JMB from entering into maintenance and management contract exceeding 12 months |
If:
|
Subsection 23(1) SMA – JMB to establish maintenance account |
This subsection requires the JMB to open and maintain a maintenance account |
If the JMB establishes the maintenance account by 1 July 2021 |
Subsection 24(1) SMA – JMB to establish sinking fund account |
This subsection requires the JMB to open and maintain a sinking fund account |
If the JMB establishes the sinking fund account by 1 July 2021 |
Paragraph 26(1)(c) SMA – Duties of JMB in relation to accounts |
This paragraph requires the JMB to file with the COB a certified true copy of the audited accounts together with the auditor's report within 14 days of the accounts being audited |
If the JMB submits the certified true copy which need to be filed with the COB during the Relevant Period by 1 July 2021 |
Paragraphs 27(2)(a) and (b) SMA - Dissolution of JMB |
These paragraphs provide for the handing over to the MC of, among others, balances in the maintenance account and sinking fund account |
If the obligations which need to be performed within the Relevant Period are performed by 1 July 2021 |
Subsection 27(3) SMA - Dissolution of joint management body |
This subsection requires the JMB to hand over to the MC the audited accounts |
If the handing over which need to be done within the Relevant Period is done by 1 July 2021 |
Paragraph 10 Second Schedule read together with paragraph 22(2)(a) - AGM |
This paragraph provides the timeline within which the JMB is to hold an AGM |
If the AGM which needs to be convened within the Relevant Period is convened by 1 July 2021 |
Exclusions
- The exemptions under the Orders shall not affect any legal proceedings commenced or judgment or award obtained from 18 March 2020 until the date of publication of the Orders in the Gazette, i.e. 23 June 2021.
- The exemptions under the Orders shall not affect the validity of any action taken by the respective stakeholders under the SMA before or on the commencement of the Orders and shall not affect any legal proceedings commenced by or against the respective stakeholders.
Comments
The exemptions serve to ensure that the respective stakeholders
affected by the implementation of the various movement control
orders would not be penalised for their failure to comply with
their duties and obligations under the SMA. However, as many of the
exemptions are given on the condition that the relevant duty or
obligation be complied with by 1 July 2021 and given that the
exemptions were only gazetted on 23 June 2021 and the current Full
Movement Control Order has been further extended, there may not be
sufficient time for compliance especially if affected offices
remain closed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.