The concept of sub-division of title pertaining to property was first introduced in Peninsular Malaysia on 1 January 1966 via the National Land Code 1965. Subsequently, the Strata Titles Act 1985 (“STA 1985”) together with numerous other amendments, which facilitate the sub-division of a building into parcels, have been enacted.
The most recent modernisation of law that will bring about a significant change to the landscape of strata developments and common property management comes in the form of the Strata Titles (Amendment) Act 2013 (“STAA 2013”). The STAA 2013 has come into force since 1 June 2015.
Some of the amendments under the STAA 2013 that carry significant weight include:
(a) the STA 1985 has been extended to Labuan (section 2);
(b) the introduction of the Electronic Land Administration System of Strata Titles (new section 4B);
(c) the requirement for the original proprietor to apply for sub-division of a building or land within one (1) month from the date of issuance of the certificate of proposed strata plan (section 8);
(d) in the case of phased developments, the issuance of a provisional strata title for a provisional block comprising of land parcels is now allowed (section 9A);
(e) with regards to low-cost buildings, the original proprietor must apply for sub-division of the building upon receipt of the certificate issued by the State Authority classifying the building to be low-cost (section 9B);
(f) the designation of limited common property and the creation of one or more subsidiary management corporations (section 17A) to represent the different interests of parcel proprietors; and
(g) the execution of transfer documents of ownership of strata titles by purchaser within thirty (30) days from the date of issuance of the strata title by the Land Administrator (section 19A).
Two key areas that both property buyers and original proprietors alike need to be familiar with:-
1. Application for Sub-division of Building or Land
The original proprietor must apply for sub-division at the super structure stage, the procedure of which has been streamlined into two stages:
(a) First: Application for a certificate of proposed strata plan (“CPSP”); and
(b) Second: Application for sub-division within one month from the date of issuance of the CPSP.
What is the “super structure stage”? It is defined as the stage upon the completion of building works as duly certified in accordance with the by-laws made under the Street, Drainage and Building Act 1974. In practical terms, it is likely to mean the completion of building works up to the completion of walls that are necessary for measurement of parcels, accessory parcels and common property.
For the first stage, the STAA 2013 lays down the various situations and time periods within which the proprietor must apply for the CPSP. All proprietors should give added consideration to this new requirement as it includes situations before and post-commencement of the STAA 2013.
At the second stage, once the CPSP is issued the proprietor shall apply to the Land Administrator for sub-division within one (1) month from the date of its issuance.
The implementation of these new time frames represent a significant step in expediting the application for sub-division and will also play a major role in facilitating the delivery of vacant possession after the strata title has been issued.
2. Limited Common Property and Subsidiary Management Corporations
This progression in the STAA 2013 is particularly beneficial for mixed developments where the usage of each parcel owner may differ widely.
Subsidiary Management Corporations
The primary or principal management corporation (“MC”) may now create other subsidiary management corporations (“SMC”) to represent different parcel owners.
For instance, in a mixed development that consists of commercial and residential blocks, the main MC would manage common property used by all parcel owners such as the car parks, security points and common garden grounds; the commercial SMC would manage the lifts, lobbies and centralized air-conditioning meant exclusively for the office owners; and the residential SMC would manage the swimming pool, gym and lifts meant exclusively for residents.
This system would certainly help improve the efficiency in the management of the various common areas, allow for better allocation of resources (provided funds collected are properly channeled towards the maintenance of specified areas) and provide better representation of different owners.
Limited Common Property
The MC may also now designate restricted common property areas for the exclusive use, enjoyment and management for a particular group of parcel owners. However in order to do this, these areas must be clearly defined and marked on a special plan, which must then be submitted to the Director of Survey.
This would resolve issues relating to the overlap of management and resources, and likewise the lack of management of certain areas, as each SMC’s responsibility will be clearly delineated.
Malaysia’s property construction and development industry has advanced leaps and bounds over the past few of decades, and our Malaysian lawmakers have now demonstrated that Malaysian law is capable of evolving, adjusting and adapting in order to keep pace with the industry’s growth – this progressive mindset can only be favorable for the Country’s future.