IT starts with whether one is genuinely passionate about volunteering one’s time to serve for the well-being of his community in the joint management committee (JMC) or management committee (MC) under the Strata Management Act 2013 (SMA), or one has a personal agenda to take advantage of his position to help himself with jobs, status, information and gains to enrich himself.
Scenario 1:
There is this estate agent lady, who is in the JMC, and she seems to have all information on the owners (names, addresses and contact numbers). She periodically contacts me and my neighbours on whether we wish to sell our condominium units, as she always claims that a certain investor or investors of hers wish to offer a “high price”. How did she obtain our information and contact numbers?
Scenario 2:
You have diligently paid your instalments to your bank for the last 10 years, and the quantum of indebtedness has been significantly reduced. Then, one day, you receive a call from a financial planner, who is in the MC, and he asks: “Do you wish to refinance your property for another loan? As a financial planner, I can arrange it with the banks. You could use the money to buy another property.”
Scenario 3:
I can do a better job running the management and maintenance of our apartment building. My team, although unlicensed, can also do property management by making the meagre deposit (refundable) as a bond to the JMB or MC. Trust me that I will not deplete your entire sinking fund and abuse my position.
Scenario 4:
During the annual general meeting (AGM), this big-time contractor-investor is very vocal when asking the “right questions”, as many parcel owners are not familiar with SMA. Consequently, he is made the chairman of the JMC. He always seems to have his own friendly suppliers, contractors, service providers, insurance brokers, and even Airbnb operators, for everything in the management and maintenance of the common property. In fact, he has a pecuniary interest in everything he does.
The above scenarios, especially 1 and 2, are quite often heard when personal information is divulged to others, and people profit from the sale of the said information.
Personal Data Protection Act 2010
In Malaysia, we have the Personal Data Protection Act 2010 (PDPA). It is aimed at preventing the abuse of personal data for commercial purposes, and has been implemented since November 15, 2013. The act plays a crucial role in safeguarding the interests of individuals, and makes it illegal for corporate entities and individuals to disclose or sell personal information, or allow the use of the data by third parties. The penalty for non-compliance is a fine of between RM100,000 and RM500,000, and/or between one and three years’ imprisonment upon conviction.
Eligibility
A member of the executive committee, namely the JMC or MC, is required to have a high standard of integrity. SMA provides a comprehensive list of conditions that must be followed to be eligible for election and to be a committee member.
First, to be eligible for election as a committee member, the parcel owner must be at least 21 years old and have fully paid his maintenance charges and sinking fund at least seven days before the AGM. It is to be noted that a proxy is not eligible for election as a committee member.
Second, while a parcel owner is a committee member, he must observe the following conditions:
a) He is not a bankrupt;
b) He is still a parcel owner;
c) He is not convicted of an offence of fraud or dishonesty;
d) His conduct must not bring discredit on the JMC or MC;
e) He must be of sound mind;
f) If he is the chairman, he must not absent himself from three consecutive committee meetings without leave of the committee;
g) If he is not the chairman, he must not absent himself from three consecutive committee meetings without leave of the chairman;
h) He must not be in arrears of the maintenance charge and sinking fund (including interests) for three consecutive months;
i) Representative is not removed by his body corporate owner;
j) If he commits a serious breach of the by-laws, he must remedy the breach within 14 days of the notice from the committee; and,
k) He is not convicted of an offence of moral turpitude.
Wikipedia’s definition of “moral turpitude”, in the legal context, is “an act or behaviour that gravely violates the sentiment or acceptable standard of the community”. It has also been described as an “act of baseness, vileness or depravity in the private and social duties that a man owes to his fellow men or to society in general, contrary to the accepted and customary rule of rights and duty between man and man”.
It simply means a criminal act that is contrary to the community standards of justice, honesty or good morals.
If the parcel owner fails to observe the above conditions, he is deemed to have vacated his office as a committee member. A committee member may resign from his office at any time by giving written notice to the committee. Consequently, the general body, JMC or MC, may elect another owner, who is eligible to vote, at an extraordinary meeting (EGM) to replace the member and to hold office for the remaining term, or to leave the position vacant until the election of the JMC or MC, as the case may be, at the next AGM.
Challenging duties
In SMA, the JMC or MC should comprise a minimum of three persons and a maximum of 14 who are owners eligible to vote. There shall be a chairman, secretary and treasurer, all of whom shall be natural persons.
Although these are voluntary positions, they have to be taken seriously because they involve people’s well-being and their investments. Most owners’ corporations are headed by a leader who might also be the chairman at meetings. Strong and principled leadership is an essential component of every successful JMC or MC. Very often, those who speak the loudest at meetings are elected, but that may not be sufficient for the long term.
We have written on the topic of leadership qualities and how to distinguish them in our past article, titled “Choose the right leaders and prosper”, published by EdgeProp on July 24 last year.
Be wary of self-serving candidates
Newcomers frequently make good volunteers, but are sometimes detracted by insisting on covering old topics. How much interest has the candidate (during an AGM election) shown in the community and its undertakings? Did he suddenly appear to be interested? Have there been regular meet-ups and participation in activities? If not, investigate the sudden interest.
Be particularly careful about the “one issue” candidates who volunteer because they want to “take over” the property management, as in Scenario 3 above. Be particularly cautious of “unlicensed property companies/managers” that have managed to infiltrate committee members in the JMC and MC, if they are not themselves in the committee. They may paint a glossy picture of what they can do thanks to their “years of experience” or so-called “knowledge of SMA”. But, do they have the professional qualifications, management and technical experience, and passed the stringent test of professional competency? Are they registered with the legislated board of valuers, appraisers, estate agents and property managers (www.lppeh.gov.my), which is the sole statutory regulatory board governing property managers that issues licences to registered ones in Malaysia under Act 242?
A candidate should not have conflicting personal and professional commitments. For example, the unethical estate agent and overzealous financial planner, as in Scenarios 1 and 2 above, may have particular interest in “serving” the JMC or MC to obtain private information and details on owners, so that they may gain an advantage and priority (with their fellow owners) for their listing purposes (sale, purchase, financing and rent). This clearly contravenes PDPA, and the aggrieved party may lodge an official complaint with the Communications Multimedia Ministry (www.kkmm.gov.my) for an investigation to be carried out.
Person(s) having a pecuniary interest
“Pecuniary interest” is an interest that a person has in a matter because of a reasonable likelihood or expectation of appreciable financial gain to the person, or through another person with whom the person is associated. Therefore, it is best that any person or owner, who has a pecuniary or vested interest in the management and maintenance of his stratified building, should recuse himself from seeking election to the JMC or MC.
In any decision-making process by the committee, a member of the committee who has a direct or indirect pecuniary or vested interest in the subject matter should declare his interest therein, and immediately recuse himself from the decision-making process of the committee on the subject matter. Although this is not provided in SMA or Strata Management Regulations, it is the fiduciary duty and responsibility of any committee member for good self-governance.
There is, however, Section 87 of SMA, which prohibits the appointment of a managing agent having a professional or pecuniary interest. Section 87 is reproduced below for a clearer understanding of the issue of having a vested interest in the management and maintenance of stratified buildings:
Section 87
1) A person shall not be appointed as a managing agent if he has a professional or pecuniary interest in any building or land intended for subdivision into parcels, or any subdivided building or land.
2) A person is regarded as having a professional or pecuniary interest in any building or land intended for subdivision into parcels, or any subdivided building or land, if:
a) he has been responsible for the design or construction of the building;
b) he or any of his nominees, officers or employees has any material interest in the building or land intended for subdivision into parcels, or any part of the building or land;
c) he is a partner or is in the employment of a person who has any material interest in the building or land intended for subdivision into parcels, or any part of the building or land; or,
d) he or his family holds any interest in the building or land intended for subdivision into parcels, or any part of the building or land, whether directly or as a trustee or otherwise. – The Vibes, January 18, 2021
Datuk Chang Kim Loong is honorary secretary-general of the National House Buyers Association, a non-political, not-for-profit organsation manned wholly by volunteers
