Amended Act aims to improve running of property management organisations

Amended Act aims to improve running of property management organisations
Under the amended Act, subsidiary proprietors now have to seek the management councils’ (or Management Corporation Strata Titles’) approval for installations which 'affect the appearance of the building'. TODAY file photo
MND looks to give homebuyers more details on track record of developers and contractors
Published: 4:00 AM, September 12, 2017
Updated: 6:53 AM, September 12, 2017

SINGAPORE — Changes to the Building Maintenance and Strata Management Act were passed yesterday, with Second Minister for National Development Desmond Lee stressing the aim of balancing regulatory oversight and safeguarding the interests of subsidiary proprietors (SPs), against the latitude of self-governance.

The review of the Act began in 2012 and involved extensive consultations and discussions.

Since the Act was introduced in 2005, the number of strata units has doubled from 170,000 to 340,000 and the number of management corporations has grown from 2,700 to 3,400.

Responding to questions raised by Members of Parliament (MPs), Mr Lee said safety equipment SPs such as condominium owners are allowed to install include window grilles, screens, railings and lock and security mechanisms.

Under the amended Act, SPs now have to seek the management councils’ (or Management Corporation Strata Titles’) approval for such installations which “affect the appearance of the building”.

To address disputes arising from building defects, the Ministry of National Development (MND) is looking to provide home buyers with more information on the track record of developers and contractors — with regard to design and construction quality— so that they can make “more informed choices”, said Mr Lee.

“It will also put pressure on developers and contractors to ensure that they deliver reasonable quality.”

Building defects are a common topic of disputes, and Chua Chu Kang GRC MP Yee Chia Hsing suggested raising the defects liability period, currently set at 12 months from the time a building is awarded its temporary occupation permit.

During the defects liability period, developers are obliged to fix any defects that arise in the estates at their own cost. Extending it “will not, on its own, address the root problem of poor quality by some developers and contractors”, Mr Lee said.

Meanwhile, to ensure transparency at the point of purchase, developers will be required to reflect the maximum rate for maintenance charges on sales and purchase agreements and option to purchase forms.

The ministry is also working with industry associations on a voluntary accreditation system for managing agents, he said.

He was responding to Fengshan MP Cheryl Chan’s suggestion to have managing agents comply with basic service standards, staff qualifications and audits of procurement processes.

While management councils wield the power in deciding how to run estates, the work falls on managing agents, who are contractors typically engaged on yearly contracts.

Service standards can vary according to the needs and preferences of different estates, said Mr Lee.

“Our sense is that it is better for MCSTs to specify their expected service standards in their contractual agreements with the (managing agents) instead,” he said.

To guard against conflicts of interest, the amended Act will bar double-hatting in management committees and require SPs to give explicit consent before they can be nominated and elected into a council.

However, some MPs — like Ms Chan and Tanjong Pagar MP Joan Pereira — noted the difficulties of finding volunteers to serve, especially in small estates.

Where there are no willing nominees to form a council, SPs will be “collectively responsible” for the running of the estate, or can apply to the Strata Titles Board for an order to appoint a managing agent to assist with running the estate, Mr Lee said.

Rather than a one-size-fits-all approach, the amended Act seeks to leave some flexibility for MCSTs to self-govern, Mr Lee said.

“From time to time, there have been calls to introduce more prescriptive legislation, particularly to resolve disputes between SPs. To spell everything out in crystal clear detail, with no room for discretion. But this is probably not the most effective way to proceed, as each development has unique characteristics … It also has its own set of circumstances and concerns,” he said.