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HOT: STRATA MANAGEMENT EXEMPTION ORDERS ARE OUT !

Strata Management Case Updates

On 23.6.2021, there were 4 Exemption Orders introduced and published to provide various exemptions from the application of the provisions of the Strata Management Act 2013 through:

(a) Strata Management (Exemption to Developer) Order 2021 (PU(A)274);

(b) Strata Management (Exemption to Commissioner of Buildings) Order 2021 (PU(A) 275);

(c) Strata Management (Exemption to Management Corporation) Order 2021 (PU(A) 276); and

(d) Strata Management (Exemption to Joint Management Body) Order 2021 (PU(A) 277)

They are all downloadable below:

These 4 Exemption Orders target the developer, Commissioner of Buildings (“COB”), Joint Management Body (“JMB”) and Management Corporation (“MC”) but not purchasers, proprietors or occupants. All 4 orders are deemed to have come into operation from 18.3.2021 until 30.6.2021

I will list the orders in sequence below:

Exemption to Developers (PU(A) 274)

  • Section 10: The developer’s management period shall expire within the period from 18 March 2020 until 30 June 2021.
  • Section 11: The developer’s management period shall expire within the period from 18 March 2020 until 30 June 2021.
  • Subsection 14(1)(c): A certified true copy of the audited accounts together with the auditor’s report which need to be filed with the Commissioner within the period from 18 March 2020 until 30 June 2021 shall be filed latest by 1 July 2021.
  • Section 15: The developer’s management period shall expire within the period from 18 March 2020 until 30 June 2021.
  • Subsection 18(1) : (a) The first annual general meeting of the joint management body need to be convened within the period from 18 March 2020 until 30 June 2021; and (b) The developer shall convene the first annual general meeting of the joint management body latest by 1 July 2021.
  • Subsection 49(1)(b) : (a) The preliminary management period shall expire within the period from 18 March 2020 until 30 June 2021; and (b) The period of any contract relating to the maintenance and management of any building or land intended for subdivision into parcels and the common property in the development area entered into within the period from 18 March 2020 until 30 June 2021 shall not exceed one month after the annual general meeting is convened.
  • Subsection 50(1)(c) :The developer shall establish a maintenance account in the name of the management corporation latest by 1 July 2021.
  • Section 51: The developer shall establish a sinking fund account in the name of the management corporation latest by 1 July 2021.
  • Subsection 54(1)(c): A certified true copy of the audited accounts together with the auditor’s report which need to be filed with the Commissioner within the period from 18 March 2020 until 30 June 2021 shall be filed latest by 1 July 2021.
  • Section 55: The developer’s management period shall expire within the period from 18 March 2020 until 30 June 2021.
  • Subsection 57(1): (a) The first annual general meeting of the management corporation need to be convened within the period from 18 March 2020 until 30 June 2021; and (b) The developer shall convene the first annual general meeting of the management corporation latest by 1 July 2021.
  • Subsection 92(1): The developer shall pay the deposit to rectify defects on common property which need to be paid to the Commissioner within the period from 18 March 2020 until 30 June 2021 latest by 1 July 2021.

Exemption to Commissioner of Buildings (PU(A) 275)

  • Subsection 92(5): COB is exempted from the application subject to the following conditions:

(a) the developer shall submit an application for the repayment of the common property deposit to the Commissioner of Buildings; and


(b) the Commissioner of Buildings shall be satisfied with the conditions of the
common property before the deposit of the common property is refunded
to the developer.

Exemption to Management Corporation (PU(A) 276)

  • Subsection 62(1)(c): A certified true copy of the audited accounts together with the auditor’s report which need to be filed with the Commissioner within the period from 18 March 2020 until 30 June 2021 shall be filed latest by 1 July 2021.
  • Paragraph 6 of the Second Schedule: (a) The preliminary management period shall expire within the period from 18 March 2020 until 30 June 2021; and (b) The period of any contract relating to the employment of agents or servants of any building or land intended for subdivision into parcels and the common property in the development area entered into within the period from 18 March 2020 until 30 June 2021 shall not exceed one month after the annual general meeting is convened.
  • Paragraph 10 of the Second Schedule: The annual general meeting which need to be convened within the period from 18 March 2020 until 30 June 2021 shall be convened latest by 1 July 2021.

Exemption to Joint Management Body (PU(A) 277)

  • Subsection 21(3): (a) Any contract relating to the maintenance and management of any building or land intended for subdivision into parcels and the common property in the development area shall expire within the period from 18 March 2020 until 30 June 2021; and (b) The period of any contract relating to the maintenance and management of any building or land intended for subdivision into parcels and the common property in the development area entered into within the period from 18 March 2020 until 30 June 2021 shall not exceed one month after the annual general meeting is convened.
  • Subsection 23(1): A joint management body shall establish a maintenance account in the name of the joint management body latest by 1 July 2021.
  • Subsection 24(1): A joint management body shall establish a sinking fund account in the name of the joint management body latest by 1 July 2021.
  • Subsection 26(1)(c): A certified true copy of the audited accounts together with the auditor’s report which need to be filed with the Commissioner within the period from 18 March 2020 until 30 June 2021 shall be filed latest by 1 July 2021
  • Subsection 27(2)(a) and (b): The obligation of the joint management body under paragraphs 27(2)(a) and (b) which need to be performed within the period from 18 March 2020 until 30 June 2021 shall be performed latest by 1 July 2021.
  • Subsection 27(3): The handing over of audited accounts to the management corporation which need to be done within the period from 18 March 2020 until 30 June 2021 shall be done latest by 1 July 2021.
  • Paragraph 10 of the Second Schedule read together with paragraph 22(2)(a): The annual general meeting which need to be convened within the period from 18 March 2020 until 30 June 2021 shall be convened latest by 1 July 2021.

Saving provision

All the 4 Exemption Orders also share similar saving provisions set out below:

(1) They shall not affect any legal proceedings commenced or any judgment or award obtained within the period from 18 March 2020 until the date of publication of this Order in the Gazette.


(2) Any action taken under the Act before or on the commencement of this Order shall be valid and shall not affect any legal proceedings commenced by or against the parties.

Comments

These Exemption Orders will certainly inject clarity into a strata scheme especially when it deals with performance of statutory obligations by various stakeholders. This will compensate the gap when obligations cannot be fulfilled as a direct result of the SOPs and FAQ issued by KPKT which has no force of law (example no AGM can be convened). These set of Exemption Orders will fill the void and allow all parties to better prepare in managing the documents and information requested for a general meeting. This is especially useful to avoid a Developer / JMB / MC from being penalised for not convening an Annual General Meeting within the period of 18.3.2020 to 30.6.2021.

The clear drawback however is that these Orders were only published on 23.6.2021 but they compel parties to convene a general meeting by 1.7.2021 (which is impossible in law since minimum notification period is 14 or 21 days). Audit reports (for the extended period) will need to be prepared before hand for purposes of tabling in the AGM for instance, and it will be interesting to see how these provisions will translate into actual application.

Question also arises that if a physical general meeting is not allowed to be convened after 1.7.2021 (which is very likely except with a virtual meeting which also is not allowed in law as yet), will the Developer / JMB / MC be penalised or will there be an extension to the intended period of 18.3.2021 to 30.6.2021 or expansion to the existing Exemption Orders.

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Author
Partner at Chee Hoe & Associates. With 10+ years of experience under his belt, he specializes in civil and corporate litigation. He is also the current Chairperson of various Joint Management Bodies.
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