theSun Property December 2017

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STRATASERIES

Singlingout strata

> Examining strata-titled property

many of us living on

strata-titled property can

say that we are well aware,

informed and updated on

strata-type property issues? In fact,

there are many people who buy and

have bought such property without

knowing much about it. Many are

of the notion that all high-rise

residential property – flats,

condominiums and apartments –

are considered strata-titled

property, which to an extent is

quite correct, then again ...

Hence, the property team at

theSun

decided to get strata info

straight via a series of articles

highlighting views of industry

professionals on this property type.

A FINGER ON STRATA

Brief definitions and explanations

to help the layman (and woman)

receive strata clarity:

The word “strata”, according to

the dictionary, originates from the

word “stratum”. It is defined as

“one of the parts or layers into

which something is separated”.

In property, a strata title is

defined as:

a form of ownership devised for

multi-level apartment blocks

and horizontal subdivisions with

shared areas. The “strata” part of

the term refers to apartments

being on different levels, or

“strata” –Wikipedia.

one of the title structure of

ownership, and it basically gives

you the privilege to control over

a property or a piece of land, as

well as enable you to transfer the

property to others; generally

applies to high-rise buildings

such as residents of flats,

apartments, condominiums and

commercial buildings jointly

developed within a development

that shares common facilities –

WMA Property.

one of the title structures of

ownership and control over

property. It is usually applied to

subdivided buildings or

complexes such as high-rise

buildings, town houses,

duplexes, flats, apartments,

condominiums and commercial

buildings – National House

Buyers Association.

According to Strata Management

Act 2013 (Act 757), the

“development area” of a strata-

titled property relates to:

1. A building or land intended for

subdivision into parcels, means

any land on which the building or

land intended for subdivision into

parcels is developed or is in the

course of development or

intended to be developed.

2. A subdivided building or land,

means any alienated land held as

one lot under final title (whether

Registry or Land Office title) on

which the subdivided building or

land is developed.

STRATA IN ESSENCE

When buying property inMalaysia,

one should be aware of the various

titles or deeds the intended

property is attached to. These

include Leasehold, Freehold,

Bumiputra Reserve, Master Title

and of course Strata Title (mixed-

use, commercial-use and

residential-use), the last which we

will highlight, being the popular

property type in urbanised areas

across the globe, and inMalaysia,

strata living is fast becoming a

way of life.

According to property expert

Chris Tan, who knows strata

through and through, property

owners especially intended

purchasers of strata-titled property

should rethink the concept of “my

home is my kingdom”, in its place

consider the more practical “love

your neighbour”. He says that

“strata living is intended for

collective living, thus will be best

enjoyed collectively”. He is also of

the view that property purchasers

looking to buy strata-titled

property should be open to

community living, sharing of

common property, paying for

service charges and sinking funds,

as well as maintenance and

upgrading of common property.

He correlates strata owners with

“shareholders of a public-listed

company where the management

body takes mandate, similar to the

board of directors, and the market

value of one’s property is impacted

directly by howwell it is managed

by the management body”. Now

howmany of us are aware of this?

CURRENT AND CRUCIAL

No doubt, there is a lot to discover

where strata-titled property is

concerned, not to mention a

Pandora’s Box of strata disputes

awaiting resolution. However, we

will only touch the tip of the

iceberg this week and highlight

several issues ExaStrata Solutions

Sdn Bhd CEO and chief real estate

consultant Adzman ShahMohd

Ariffin feels the public should be

aware of in purchasing properties

under strata development of the

following nature:

1. Developments held under

liquidation.

The developers have wound up

and liquidators are managing the

development. In several cases, the

statutory payments such as quit

rent and assessment rates have not

been paid. As a result, it is difficult

for purchasers to secure loan as the

receipts are not available to be

submitted for loan application and

thereafter submission of

Memorandum of transfer (MOT).

Some liquidators also charge up to

2-3% administrative fee for issuing

consent for owners to sell.

2. Developments which are of

mixed components e.g. retail/

office/service apartments all on

one title.

The maintenance charge rate

payable must be the same for all

components under Act 757.

However, the different components

may have different needs and also

facilities and may even require

more expenditure which results in

more to be borne by the

maintenance fund. This will cause a

lot of disagreement between the

owners in the different

components.

3. Developments which have

very little chance of issuance of

strata title in the near future.

There are cases of developments

which have already been occupied

for more than five years but the

developers have yet to submit the

application for strata titles. In these

cases, the developers may have

already become dormant. Some

may have also run out funds and

are not willing to pursue the

application for strata titles due to

the high expenses involved. Hence,

very little chance of obtaining the

titles any time soon.

4. Developments which have

less than 70% take up.

When less than 70% of the units

are not purchased, it is likely that

there will be poor collection of

maintenance charges. Unless the

developer is paying maintenance

charges for the unsold units, it is

unlikely that the development will

be well maintained and managed.

5. Developments which were

developed by developers not

registered with theMinistry of

UrbanWellbeing, Housing and

Local Government.

It is best to check whether the

developer is registered with the

ministry in order to ensure that

they are governed by the Housing

Development Control and

Licensing Act 1966.

“In the above cases, the

marketability as well as value of the

properties may be affected to a

certain extent in the long term. It is

therefore wise to avoid these types

of developments,” Adzman states.

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MARCH 11, 2016

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DECEMBER 15, 2017