Building solid joint management bodies

The 4th Annual General Meeting is scheduled to be held in the month of August, 2010. Please read through this article by HBA. We need a good management team to continue to lead to a more productive and happy community.


Posted Date: Oct 15, 2009
By: HBA

Tips to consider when electing your council leader in your home community

The concept of a management body should be fairly clear to management corporation's council members or even many long-time strata property owners. For non-involved owners and residents, especially first-time owners , this form of common-interest 'governance' can be perplexing and, at times, bewildering, owing to the many parties (developers, managing agent, management council, other buyers) involved as well as with the legal duties of each party.

Those who have never lived in an owners' corporation (condo, apartments, townhouses, gated communities) often do not understand the necessity of service charges, sinking fund, rules and volunteering to sit in the management council. For them, the 'management' may be perceived as little more than a nebulous entity that expects prompt payment on monthly invoices. This lack of understanding can lead to miscommunication and misunderstanding with the general perception that condo living is 'hard'.

Required by law

Call it by whatever name, Joint Management Body (JMB), Management Corporation (MC), Residents Association (RA), they are all basically a community association of property owners looking out for their best interest. In the first two, it is a requirement by law for strata titled property under the Strata Titles Act, 1985 and the new Building and Common Property (Management and Maintenance) Act, 2007 ('BCP'), whereas Residents' Association are voluntary organizations registered as a society.

The BCP Act now allows the formation of a joint management body from the start and owners do not have to wait till the first annual general meeting called by the developer to have a say in how their investment is managed and maintained.

Very often, only a small percentage of owners in condominiums or other types of strata titled development take interest in how their properties are managed. This leaves the handful of volunteers burned out after years of volunteering their services. There are also some who are interested but do not have the knowledge or skill to sit in the decision making council.

Challenging duties

In BCP, the joint management committee representing the purchasers' should number at a minimum five purchasers and a maximum 12. Whereas, in the Strata Titles Act, the Management Council should consist of, a minimum of three parcel owners and a maximum 14.

Although these are voluntary positions, it has to be taken seriously because it involves people and their investments. Most owners' corporations are headed by a leader who might also be the chairman at meetings. Strong leadership is an essential component of every successful owners' corporation. Very often, those who speak the loudest at meetings are elected which may not be sufficient for the long term.

A good leader can make a difference for an owners' corporation spirit. By considering the strength and qualities it takes to succeed, selecting your leader can in a very real way, lead to a more productive and happy community. Here are some tips on how to choose the leader of your home community.

‘A manager does things the right way and a leader does the right thing.’

A leader is someone who not only recognizes the ‘right thing’, but who can also motivate others to help him get the right thing done. Strong leaders should have skills, knowledge, and experience plus the abilities to motivate and command.

How do you recognise who has this special combination of insight and inspiration? There are personal characteristics that point to strong leadership style. Look for people who display these particular abilities:

• Ability to take criticism - No one in a position of power will escape criticism. Leaders have the ability to discern when criticism is valid and when it is not.

• An open mind - A leader must be able to approach a problem creatively. Perspective is an invaluable leadership tool. A council/committee that is afraid of change will stagnate.

• Communicate well - Explains, persuades and praises. Some volunteers are not particularly articulate, yet are valuable and productive. Leaders should be able to express ideas clearly and persuasively.

• Decisiveness - Taking a stand involves making mistakes. A good leader takes a stand and if an error is made, acknowledges it and makes a course correction.

• Enthusiasm - Enthusiasm is contagious. With it, council members are motivated to keep volunteering. Without it, voluntary work becomes a burden.

• Leads by example and promotes teamwork - Arrives on time, never shirks responsibilities and demonstrates good work habits. Instils cooperation among volunteers, making it easy for them to pitch in together. Pitches in alongside others and not just issue orders for others to follow-up.

• Listens to others - Source for and uses other's ideas and gives credit when credit's due.

• Problem solving skill - Uses knowledge and experience to help get the job done.

• Sensitivity - A genuinely caring leader inspires confidence in others. Confidence leads to results. Leaders delegate, give and seek constructive feedback. A leader knows how and when to give praise. Praise is the simplest and often the most valued form of reward. A leader knows how to criticise constructively: pointing out what is wrong without attacking personalities. A good leader seeks opinions and ideas from others.

• Sound judgment - Has the ability to identify and prioritise issues. A good leader then weighs alternatives carefully before making decisions.

• Takes responsibility - Never blames others for problems.

• Vision - A strong leader understands and promotes the community's best interests. Leaders set goals, communicate what's needed to achieve them and then move toward them.

Here are some tips to consider when electing the leaders of your owners' corporation:

• A leader should understand the functions of the owners' corporation and be familiar with significant historical events of the community. Newcomers frequently make good volunteers. However, there are some situations which call for someone possessing a historical perspective. For example, if the corporation is in the midst of a sensitive litigation or a new management contract, a newcomer might detract by insisting on covering old ground again.

• How much interest has the candidate shown in the community and its undertakings? Has there been regular meeting attendance and participation in activities? If not, investigate the sudden interest. Be particularly careful about ‘one-issue’ candidates who volunteers because they dislike a certain contractor or are opposed to a recent service charges increase.

• A candidate should not have conflicting personal and professional commitments. For example, a high public profile candidate may have numerous commitments that mean infrequent participation.

If all the above sounds to you like a mini-government, it is in fact one. If you own a property with common property, you automatically become a member, like it or not. Over time, we have noticed that home owners can be categorised into three groups; those who make things happen, those who wait for things to happen and those who asked what happened. Which group do you belong to? Choose your leaders well and prosper or wait for the next election at the annual general meeting and run for council member post unless situation demands that there shall be a extraordinary general meeting (EGM) requisition for new leadership.

The National House Buyers Association is a voluntary, non-governmental organisation that strives to protect house buyers' rights and interests. For more information, visit: www.hba.org.my

Source: http://www.iproperty.com.my/

CONDO-MINIMUM – the plain truth

Posted Date: Sep 24, 2009
By: HBA

Are you buying a condominium? Here is a guide to help you understand the commitments better so that you know what you are buying into.

There are many reasons why people make their homes in condominiums. Some do it because their children have grown up and moved out, and their homes are now too large. Others consider it because it is cheaper to buy a unit in a condo rather than a landed property in the location they want.

The sharing of maintenance and repair responsibilities may also appeal to people who have limited time, or are not interested in such chores, as well as those who want recreational facilities at their doorsteps. Thus, when you buy a condo, you are buying into a certain lifestyle, complete with requisite facilities and services such as security, cleaning of common areas, swimming pools, multi-purpose halls, playgrounds for children and courts for racquet games.

The word ‘condominium’ comes from the Latin words ‘con’ which means ‘together’; and ‘dominium’, meaning ‘property’.

This type of property ownership has two parts to it: Ownership of the individual unit, and joint ownership of the ‘common property’ with the other unit owners in the project.

It is easy to be seduced by the ‘glamour’ of living in a condo. Therefore, before the allure clouds your mind, you must first understand that ownership comes with shared responsibilities and factors you should beware of. Here are some:

Payments, and more payments

As the owner of one of the units in a project, you are required to pay a monthly service charge to cover the cost of maintenance and the management of the common areas.

This charge will increase over time, as a result of inflation and other aspects beyond your control. Many of the ‘common’ facilities and services - such as lifts, swimming pool, gym, tennis court, landscaped gardens and even security services - are expensive to maintain.

Many first-time condo buyers usually give little thought to exactly how this charge is derived and are also generally unclear about who actually does the maintenance, or who ultimately makes the decision about what work gets done.

Furthermore, they may also not know whether it is the developer that looks after the project, or if it by the Joint Management Body (JMB) or is it a Management Corporation (MC) that is entrusted to handle the task.

In this situation, the best thing all condo owners should do is study their Sale and Purchase Agreements, Building & Common Property (Maintenance & Management) Act, 2007 and the Strata Titles Act carefully to understand the responsibilities that comes along with stratified property ownership and the contributions to the funds involved.

Tolerance

Condo residents share walls, floors, ceilings, hallways, entrances and parking areas with their neighbours. Respect for other people's right to the quiet and peaceful enjoyment of their homes is therefore essential.

As a resident, your neighbours will appreciate (and hopefully reciprocate) your efforts to turn down the volume of your TV or hi-fi set, walk softly, close your doors quietly and limit your vacuuming to reasonable hours.

Inconsiderate residents ruin the lives of those around them, but at the same time, you will need to have some degree of tolerance to live in a condo. For example, you have to accept the presence of noisy, boisterous children.

Community rules

Whether a condo is small or large, it will invariably come with a set of by-laws, rules and regulations for the benefit of the community at large.

Whether it is the developer or the JMB or that of the MC that sets them, the covenants, by-laws, rules and other conditions bind all owners.

These by-laws govern almost everything, from special assessments and the election of residents' association officers to the allocation of parking space and use of recreational facilities.

Owners who fail to follow the by-laws can be fined, and complaints with the relevant authorities for the seizure of an owner's property can be made if fines or assessments are not paid. You can only be happy living in a condo if you are willing to follow its by-laws, rules and regulations.

Volunteering time

All unit owners automatically become members of a condo's MC, which is formed once strata titles have been issued to the individual units. However, even before the issuance of these titles, it is the JMB that is formulated to jointly work with the developers.

The office bearers of the JMB or MC are made up of volunteer owners. There are cases, of course, of condo owners never volunteering their service, or even turning up for meetings. Residents will notice such lack of participation, especially if the project is small.

Being part of a community means being prepared to serve on the JMB or MC, or joining a special committee, helping to get estimates for repairs, or taking responsibility for other tasks that benefit the condo as a whole. If you are willing to pitch in, you will earn the gratitude and respect of your fellow unit owners.

Before you make the move…

When contemplating buying a condo, there are some questions you should ask yourself. Some of these include:

• What is the history or background to the development? For example, have there been persistent problems with water leakage or poor collection of service charges?
  
  
• If you are purchasing a unit that has yet to be issued with a strata title, will you have to bear the cost of any difference in the built-up area, should it be larger than the 'estimated size" as described in your Sale and Purchase Agreement (SPA)?
  
  
• What is the current financial status of the condo's Joint Management Body (JMB) or Management Corporation (MC)? Ask for a copy of the year-end financial statement, the current budget and evidence of adequate insurance coverage. However, this is usually easier said than done, as many developers who manage condos consider financial statements highly confidential. You will have to be persistent so as not to be saddled with any sudden increase in service charges, or end up with a badly managed condo that will reduce the value of your property.
  
  
• Does the common property appear to be well maintained and managed?
  
  
• Will the unit owners own the facilities as part of the common property, or will the developer continue to own them?
  
  
• How many units in the building does the developer own? In cases where the developer owns a larger number, it will continue to dominate the MC.
  
  
• How many units have been rented out? In condos where there are more tenants than owner-occupiers, chances are you will have fewer people volunteering for community services.
  
  
• Are there extra parking bays for owners? Are there enough parking bays for visitors? Are there restrictions on visitor or owner parking? Is there any parking allocation for motorcycles?
  
  
• If there is vacant land around the condo, will some new project take shape there in the future? If so, what impact will it have on the quality of life that you expect?

You will have to talk to the existing condo residents, particularly owner-occupiers, for answers to some of these questions. Ultimately, the decision as to whether condo living is right for you or not should be based on your preferences and tolerance level.

Buying a condo should be a well thought-out decision, based upon an understanding of the social, financial and legal aspects of the purchase.

Just as with the purchase of any type of house, you should consider carefully whether it is the right place for you and your family to live in, in the long term.

The National House Buyers Association is a voluntary, non-governmental organisation that strives to protect house buyers' rights and interests. For more information, visit: www.hba.org.my

Source: http://www.iproperty.com.my/