Management Corporation Matters

MCST

Every subsidiary proprietor (“SP”) of a strata development or scheme is automatically a member of the duly constituted Management Corporation (“MCST”).  Each SP owns his or her strata unit or lot and is responsible to maintain his own strata lot.  The powers and duties of the MCST are to control, manage and administer the common property, which include the power to improve, remove or enhance the common property. Common property is property used or enjoyed or capable of being used or enjoyed by more than two occupiers. It now includes load-bearing structural elements regardless of whether they are situated in or outside the SP’s strata lot. It is not owned by the MCST but by all the SPs in undivided shares according to their share value. The MCST is a legal entity and statutory body created under the Building Management and Strata Maintenance Act, Cap. 30C (“BMSMA”).  As a legal entity, it can sue and be sued it its own name.  For a new development, the MCST can sue the developer for any defects not made good. The spirit of the BMSMA is self-government and self-management of the day-to-day estate affairs by the MCST, within the ambit of the statutory provisions and the estate’s by-laws. It operates through a Management Council (“MC”).

Management Council

The MC is a representative body of members capped at 14 elected from among the SPs or their nominees at each AGM.  The three office bearers of the MC are the Chairman, the Secretary and the Treasurer. The powers and duties of the MCST and MC are set out in Sections 29, 60 and 61. The MC must act for the benefit of all SPs. Some issues that may confront an MC include the allegations of abuse of powers, the dereliction of duties, conflict of interest, acting for personal benefit, dishonest dealings or a one-man show dominated by a domineering Chairman instead of team work.  It is incumbent on every MC member and office -bearer who volunteers to serve to act with integrity and humility, instead of just being a seat warmer with inappropriate silence.  The seat of the Chairperson is not an ego trip or a power grab or a status symbol.  MC’s work is hands-on hard work and passion.  It is a responsibility carried out without fear of prejudice or hope of advantage.  The key to effective estate management is a decisive leadership and a good team who contribute their expertise from their varied experiences.  Decisions are often made for the estate.  Some can be made by electronic communications among MC members whereas others can only be made at an AGM.  Time and effort should be focused on improvements of the estate for the benefit of all SPs instead of being entangled in legal disputes involving a Council member suing another for defamation, a new MC suing the old MC for breach of duties or SPs compelling the MC to act to rectify a breach occasioned by their inaction via a Strata Title Board application or the MC passing a motion of no confidence against the Chairperson.  Do you know that if you are sued by the MCST or third parties or fellow MC members for defamation, breach of duties or negligence, you are not covered by the “Errors or Omissions” in the Third Party’s estate insurance?  As individual MC volunteers, it is wise and prudent to seek proper legal advice. As a statutory body, the MCST as represented by the MC needs to know its rights, responsibilities and remedies.  You need to be advised on the pitfalls to avoid and the relevant BMSMA provisions. Under the amended Section 38(3), BMSMA, the MCST is empowered to use management funds to obtain legal advice and representation and provide an annual budget so that the lawyer can help the MCST navigate through the points of law and their interpretation in the BMSMA with reference to other statutes.

Managing Agent

The MC may delegate the day-to-day running of the estate to a duly appointed Managing Agent (“MA”) but not their responsibility.  The scope and nature of the MA’s duties is governed by a Service Agreement.  The duty of the MA is to exercise reasonable skill care and diligence. Some common problems encountered by an MA are:  who to take instructions from arising from a failure or delay to make a decision by the MC or when there are two opposing camps on the MC; failure to supervise the satisfactory completion of works or installation of equipment on the common property; inability to handle the SPs who bombarded or harassed them with ceaseless complaints.  There may be even allegations of dishonesty involving handling monies, forging documents or carelessly signing the Purchase Orders without a written confirmation from the MC or not supervising the completion of installation, maintenance or rectifications works but casually stating that works were satisfactorily performed when they were not. It is always prudent not to just take instructions from the Chair.  What are your rights and remedies in cases of harassment or threats by unreasonable SPs?  What are your defences if faced with the above allegations?  How best to protect yourselves?  Prevention is always better than cure.  This is where timely legal advice is crucial to you.  For a new MA taking over the estate management from the old MA, the MC may need to know their rights of termination, their rights for a proper and complete delivery of all documents and accounts to the new MA and other rights and remedies. 

Subsidiary proprietors

For SPs in a residential or commercial strata development, the common issue is always what you can do on your own lot and what you cannot do on the common property and grievances against your neighbour opposite or below or above you. Inter-floor leakage is more straightforward.  What about leakage from the roof or ceiling into your rooms?  If there is a structural load-bearing beam that runs across your kitchen that damages your ceiling?   Whose responsibility is it?  In the spirit of true neighbourliness, you should always try to first resolve every dispute amicably.  As a last resort, you may exercise your rights and remedies, which include an STB application, a private Magistrate’s complaint or a civil suit.  The SPs are now authorized to install safety equipment on his or her strata lot without the MC’s approval so long as it does not affect the facade and is installed in a competent way.  Is the SP or the MCST responsible for structural defects to the columns, external walls or beams?  If an SP has carried out unauthorized improvement works on his or strata lot, which either increases the gross floor area or adversely affects the facade of the development, can the MCST step in to carry out the rectification works at the expense of the SP, if the SP refuses?  What if the unauthorized improvement works were not carried out by the SP but by the previous or original owner?

For a commercial SP or tenant in a retail outlet, are you able to put up any signboard in any location you wish without obtaining prior approval from the MC? What is your recourse if they refuse permission?

Is there a need to protect the interest of the MCST by lodging a statutory charge on the property of the SP who owes months of maintenance fees? If you are the SP in arrears, what can you do?  Besides a statutory charge, what other remedies can the MCST take against the recalcitrant SP?

All the above are valid concern and questions in relation to MCST matters. We can help.

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