Joint management bodies, management corporations, parcel owners and developers are regularly turning to the Strata Management Tribunal ("Tribunal") due to its efficiency, cost-effectiveness and speed in resolving strata management disputes.
The Strata Management Tribunal is a specialized tribunal that provides an alternative to the court process to resolve disputes related to strata properties. It is established under the Strata Management Act 2013 and is responsible for hearing and determining disputes, issuing orders and directions, and enforcing its decisions. Read our article entitled "10 Things to Know About the Strata Management Tribunal" for more information about the Tribunal.
As the number of cases filed in the Tribunal increases and more awards are issued, the issue of non-compliance with Tribunal awards has also become increasingly prevalent.
Section 120 of the Strata Management Act 2013 provides that a Tribunal award shall be deemed to be an order of a court and can be enforced accordingly by any party to the Tribunal proceedings. If the Tribunal award has not been complied with, the Tribunal will send a copy of the award to the relevant court and the court will cause the copy of the award to be recorded.
1. Service of the award
Firstly, it is the Tribunal's statutory duty to serve, or in other words, deliver a copy of the Tribunal award to all parties.
The successful party may also serve the award on the non-complying party to demand compliance with the terms of the award. Upon service, the non-complying party's acknowledgement of receipt of the award should be obtained.
2. Notice of award non-compliance
Once the award is served on the non-complying party and in the event of non-compliance with the award, the successful party should prepare and submit 3 copies of the notice of award non-compliance (notis ingkar award) and 5 copies of the award to the Tribunal.
3. Recording in the civil court
The Tribunal will forward the award to the magistrate's or sessions court for it to be recorded. This has the effect of the civil court registering the award as a civil case and confirming the award as a court judgment. More importantly, any debt arising from the award now becomes a judgment debt.
The Tribunal will provide written confirmation to all parties once the award has been recorded in the civil court.
4. Letter of demand
After the award has been recorded in the civil court, it is ready to be enforced by way of civil execution proceedings.
It is advisable to issue a letter of demand to the non-complying party to give notice that civil and criminal legal proceedings will be commenced against the non-complying party if the terms of the award are still not complied with.
By issuing a letter of demand, it is hoped that the non-complying party will finally come around to complying with the award and further legal proceedings and costs can be avoided.
5. Civil execution proceedings
To enforce the judgment debt arising from an award, the following civil execution proceedings can be commenced:
- Bankruptcy (against individuals)
- Winding-up (against companies)
- Judgment Debtor Summons
- Writ of Seizure and Sale
- Garnishee proceedings
To enforce mandatory or prohibitory injunction orders arising from an award, committal proceedings for contempt of court can also be pursued.
Our article entitled "Debt Recovery in Malaysia" explains each of the execution proceedings above.
6. Criminal proceedings
A complaint can be made against the non-complying party's non-compliance with the award concurrently with civil execution proceedings. This complaint is to be submitted to the Commissioner of Buildings ("COB").
Failure to comply with an award is a criminal offence under Section 123 of the Strata Management Act 2015. If found guilty and convicted, a person may be liable to a fine not exceeding RM250,000 or to imprisonment for a term not exceeding 3 years or both. For a continuing offence, there will be a further fine not exceeding RM5,000 for every day of non-compliance.
The COB has the jurisdiction to investigate and prosecute the offence. For example, in July 2020, the Subang Jaya Municipal Council, through the COB, prosecuted a parcel owner for failure to comply with an award to pay outstanding maintenance charges. The Subang Jaya Magistrate's Court convicted the parcel owner and imposed a fine of RM5,500.
It is important to understand how to register and enforce awards from the Strata Management Tribunal to ensure that successful parties receive the benefits of their awards and non-complying parties are held accountable. Understanding the enforcement process allows parties to take appropriate legal action against non-complying parties, which may include civil and criminal proceedings. By enforcing Tribunal awards, parties can ensure that the strata management system operates fairly and effectively.
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.