my condo has a few handful of people who refuse to pay maintenance. what are the ways to encourage them to pay?

1. legal methods
- yes but lengthy and costly

2. cut water cut electricity
- cannot because is individual meters

3. cut access card
- cannot because usually the defaulter is the condo owner but the tenant is innocent



ideas guys?

If they are not paying maintenance, then chances are they are not paying water either. So you can cut them off.

why couldn't you bar their access cards? Once the tenant realised that they cannot get in, chances are, they will default rental payments. So best for management to bar the access cards.

ya i was tenant before so i know the issue. one side they are obligated to pay the rental, one side they are being harrased by management office.

the idea is to encourage payment without going to extremes.

i believe you can do a "clean up" of access cards for "security reasons" to filter out those cards lost/stolen which can still be used to access condo.

request all owners to re-register access cards. those card numbers not registered by certain date will have no access. one condition to register is all outstanding fees owed to management must be paid.

i guess tenants will just have to bug those stubborn landlord or stop paying as michael says.

ya re-registration of cards is a good idea

Actually legal method is seriously quite dumb if you asked me. Under the provision in strata title act, the management can only apply to court and seal off the unit and sell ONLY movable items (Any in house lawyers? Please correct me if I am wrong). So end up the expensive and time consuming exercise may end up with nothing if the unit was empty and rented in such condition.

yes you are right. can only take loose items, and need to auction them off.
its a time consuming and not efficient.

hmmm...my condo management apply the legal way and it works quite well woh......btw, all legal charges are charged to owner, not management

Can the tenant deduct the maintenance fees from the rental and pay the lanlord the balance?

if can.

So chase after the tenant.

Your management might be one of the luckier ones. I supposed a good condo environment, most would pay regardless of the price.

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Added on May 23, 2012, 9:37 amA tenant should not deduct maintenance fees from the rental. They will continue to use the unit as if the owner has paid. That is, the maintenance fees has nothing to do with the tenant. Until they are barred from entering the premises or the water supply is cut, then tenant may threaten the owner that they will withold the rental until payments are made.

This post has been edited by michaellee: May 23 2012, 09:37 AM

+1 This should be the most effective way, and management/JMB/MC can print out the list (what is the unit number, how much they are owing) and post it in every public area in the condo.

there are a lot of low cost flats, they secured their lifts with access card which not be able to allow them to get to their unit if they didnt pay the maintenance fees

Cannot, it is separate issue.

Management and maintenance fee issue is between management and owner, nothing to do with tenants.

Management can disallow the tenant to use the common facilities like deactivate the access card for common facilities (which is given to owner then owner give to tenant), but cannot chase the maintenance fee after the tenant.

there are cases where if the access card is blocked, the tenants become angry and aggressive on the security guards.

on asking the tenant to pay the maintenance, that agreement between tenant and owner. if the tenant dint pay owner in full, then the tenant breach contract with the owner.

if the tenants became angry and aggresive, the security guards should get the cop

Not dumb, but need to do so, as all need to do in proper way.

Sg has better law/regulation to govern or ensure maintenance fee is paid, which can be a role model to strict amend law for the better future safeguarding of strata property here.

It is not that expensive, also management can opt to pass the cost of legal fee to the owner, and I had seen the resolution was passed in the AGM/EGM to empower the management company to do so.
Whether it is needed to or not, or permitted by law/regulation, that I am not sure.

Also, any amount owed can be charge interest and compounded, if any owe money more than 30k, as compounded interest can be exponantial, there is option for bankruptcy route.
Correct me if I am wrong.

Actually, it is dumb for owner not to pay maintenance fee.
It only kill your own property value over the long term.
Not enough maintenance fee, strata property cannot be maintained well.
Property not maintained well, it only kill the value itself.
By not paying the maintenance fee, it is like owner throwing stone on their on foot.

Then please tell the tenant to convey the anger to the owner, it is owner fault. As simple as that.

Sg has no better laws to deal with such problem. If I am not mistaken, Sg strata title act in dealing with delinquent paymaster is similar to the Malaysian solution. However, the owners in Singapore cannot stand not renting out their apartment so they will pay.

Management will pass the legal cost to the delinquent paymaster but no use if that person do not reply. Actually there are so many loopholes in our legal system that if a person is well versed, they can make money from it, especially via auction properties with huge amount of money outstanding. As it is a popular method, I shall not share it on public forum.

I once bought into a high rise where the delinquent paymaster was like 20-30%. Bought about 15% of the units there, turn the place around. Got expats moving in. Rent increased few folds. Suddenly a surge of buyers coming in to buy. With strong rental, the delinquent paymasters now consist of less than 3% of the total units and even then only aging for a few months. The best way to resolve delinquent paymasters is to work out with the JMB and the community and educating them. Spruce up the place. Get the best security (even if it is at a higher cost). Maintain the place well, soon you will have lots of people wanting to stay. Of course the above comes with a caveat. You need good location still.

well done michael. thats should be a good case study for all of us here.

The JMB at my place do this way. All the car sticker need to renew every year. The owner need to make sure all outstanding bills with management MUST be settled before the car sticker issued, regardless owner or tenant stay. If tenant, the management will ask the tenant to settle with his/her landlord.

I would say this approach is effective. The current collection rate is more than 70% as compared to 40-50% before. Defaulters are mainly from those units which owners never stay-in or rent out. It is ok as the JMB will collect it back one lump sum, together with interest, when they sold off the unit.

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Added on May 23, 2012, 2:21 pmIn most of the cases I know, the tenant normally settled/agreed with their landlord to pay the bills upfront and deduct from their monthly rental. There are cases where the landlord come to office, the 2nd day after security block the tenant's access, to pay the bills as the tenant threaten to move out.

This post has been edited by CK15: May 23 2012, 02:21 PM

I just realised I might have given some wrong advices. I think it is impossible for the management to block access or in your example, entry to car park to either the tenant or the owner. The only legal way is to cut the water supply if they owe the money or to sue the fella. Unfortunately this boils down to something similar in another thread about locking up the houses if a tenant doesn't pay.

Payment of maintenance is a separate issue compared with access. So at the moment I will stick to the legal way of doing things again, which is first to cut off water supply (you can argue that whatever he pays will go to maintenance first then water supply.. so if he ends up aging the water supply for 3 months, you can cut it off). If the bugger still refuses to budge, then write notice of demand. Honestly there is really little we can do with these parasites except to wait for the chance that they want to sell the premises and their lawyer would advise them to settle all outstandings.

In fact recently I was faced with an interesting problem. During a thunderstorm, a tree branch had fallen unto a few vehicles. Act of god normally cannot claim insurance. But who has to pay for the damage? The victim may argue about negligence, the management need to protect themselves by saying they are not aware of potential damage and pass the liabilities to landscape. Landscape would claim that under their contract, there was no mention of their responsibility to look at trees whether they are healthy or otherwise. So you can see, there are many stories from JMB without an answer and the question that TS has started truly has no resolution to date.

If you are at JMC shoes, you need to find out MOST PRACTICAL & EFFECTIVE ways to collect the bills. In fact, we have seek advices from many parties, including lawyers and local council, there is NO LEGALLY WRONG to block car entry to the premise, as long as the House Roles clearly stated that. In fact, most of them NOT RECOMMEND to CUT water. The recommend way is to reduce water pressure/supply flow to very minium instead (take 2 hours for shower! ).

We take two ways to mitigate the risks you mentioned: 1) Put notice at the entry point to state "Park at your risk!" and 2) Buy public liability insurance.

I think best if you actually get your lawyer to write to you in black and white as mentioned before, you cannot block an owner's entry to their properties. What they owe your management is a private matter. Unfortunately this debate has been going as old as the chicken and egg story. Always best to refer to the strata title act 2007, which is unfortunately a very thin book for an act (you probably can read the whole book in 2 hours) and you will find that there are specific section that deals with default and payment. Unfortunately blocking access is definitely not the solution as you have impaired a rightful owner's rights into their own abode. It is always ultimately up to the court to determine the final solution. Just because many JMB had gotten away with this ruse, it may not be the legal way to dealing with such matters.

Cutting of water supply is in fact legal as it constitute a service provision. No payment will result in no service. If the high rise has individual meters connected to the relevant state water authorities, then you cannot cut it off. Like TNB, you cannot cut it off.

All insurances do not cover Act of God unfortunately unless you specify. A notice at the toilet door saying "SLIPPERY" does not mean the shopping centre owner is devoid of liabilities if someone actually slip and fell. Unfortunately, the reality of law can be quite cruel at times which is why we pay litigation lawyers heaps of money to tell the court our actual logic of matters.

Usually will use option 2 & 3.

Michael,

Just to add in a few points.

There are generally two options open to the Management Corporation under the Strata Titles Act.

1. Recovery by way of civil suit in Court.

This is provided for pursuant to Section 52


The above ought to be read together with Section 75(2)


It is not as simple as sending a letter of demand and thereafter institute legal proceedings. Two notices must be issued. This is provided for pursuant to Section 53.



Basically a two-week notice, plus another reminder notice of another 2 weeks. Total 4 weeks before instituting a civil suit.


2. Recovery by way of attachment of movable property of proprietor

This is provided for pursuant to Section 53A.



However, the provisions of Section 53 must be complied first, i.e. the notices must be served.

This section basically empowers the LA to issue a warrant for the attachment of the movable property of the proprietor.

Under a normal Writ of Seizure and Sale, it is the Court bailiff who will execute it. Under the Act, a council member or any person authorised by the MC can execute the warrrant. This means to go to the unit and attach the property. The person doing so shall be deemed a public servant. As such, any obstruction or interference by the owner can be deemed to be interference in the duty of a public servant which is a criminal offence punishable by law.

The pros of this second method are:
1. Saves time. Easier and faster than to proceed via civil suit as the MC skips to enforcement stage immediately after the notices are sent.
2. Execution is not complicated and can be done by a MC council member.
3. Intimidation and fear factor - other residents would be aware of the attachment proceedings and would be more inclined to pay up since there is a threat of enforcement. We all know how it is in Malaysia - people are more likely to follow the law when there is a serious and visible threat of enforcement or punishment.
4. Save costs on legal fees.


Cons:
1. It is tedious to get the LA to issue the warrant for attachment. It depends on the efficiency of the LA in question. I've heard of a situation where the LA brushed aside requests for attachment and told the MC to just appoint a lawyer and sue the owner.
2. Movable property relates to movable property of the OWNER/PROPRIETOR and not the TENANT. As such, if there is a tenant using the premises, no action can be taken against him personally nor his movable property. It is an illegal to do so. As such, the MC can end up with nothing if all the movable property in the premises belong to a tenant.

Michael, if I may add in a little:

Not all cases of natural disasters fall under Act of God - thus absolving the authority from any liability for loss suffered.

If it can be shown by the claimant/victim that the authority could have taken preventary/precautionary steps to prevent/mitigate the effect from occuring AND the authority failed to take those steps, then a case of negligence would arise and the authority can no longer hide behind the shield that it was as a result of an Act of God.

For example, if the tree branches were already overgrown and not trimmed, and is of an unreasonable length and size, then there is an implied duty upon the authority to trim it. It is a reasonable duty of care upon the authority to do so. As such, even though the effect (broken branch falling on a car, causing damage) is caused by an Act of God, it could have been prevented had the branches been trimmed to a reasonable and safe length and size.

The legal remedy would be against the JMB, as it is the duty of the JMB to ensure the safety of the common property for the usage of all. As such, the JMB would be the defendant in the legal suit by the plaintiff - car owners. If JMB feels that it had delegated it's duty to a landscaping company/maintenance agent, then it must add that entity as a third party and claim indemnity from them, in the event that they are negligent. The plaintiff has no nexus with the landscaping company as no contract is entered into between them.

So, if the plaintiff is successful in his suit for negligence, then JMB has to pay to the plaintiff damages. If the third party claim is allowed, JMB would then be allowed to claim for full (or part) indemnity from the landscaping company.

Of course, the burden is upon the plaintiff to prove that JMB was negligent. JMB does not have to prove anything at all. Once negligence has been ascertained, then JMB has to study its contract with the company to see if liability can be placed on the company for negligence/breach of contract.

Thanks for your reply. Still studying your above one and couldn't absorb but I think in general you have given the full legal way of doing things (which I don't know why others here are so against of using).

This case is a bit interesting. I think they are going to sue the management company rather than JMB itself. Management company said they have purchased enough liability insurance to cover the cost of repairing the car. It can be very difficult to prove negligence as the trees are reasonably healthy and most like 10 years old tree (ie. still very young with reasonable sized branches). That particular day, there was a severe thunderstorm that not only caused havoc within the compound but outside. Many other cars were damaged outside of the compound. I would say the victim stand a very low chance of winning. But then again, I am not the judge.

There is nothing in the Act which allows the MC to cut off utiilties nor block the access card issued to the owner (who thereafter handed over them to the tenant). If access to parking is via the access card, then it is also deprivation of the right to usage of the parking in the unit. In some cases, the parking lot is a separate unit owned by the proprietor with its own strata title.

There is nothing which allows the MC to 'slow down' the water supply to the unit as well. It is similar to deprivation of enjoyment of utilities.

As such, any of the above acts is deemed to be self-help. It is often said before in this forum (especially in topics of rights and remedies of landlords against tenants who default in rental or refuse to vacate the premises) that self-help is illegal in Malaysia.

Basically, the proprietor can sue the MC for illegal deprivation of use and enjoyment of facilities. It is no defence to the MC at that stage to say that it was done because the proprietor did not pay maintenance. That is a separate issue altogether.

Two wrongs do not make a right.

If the proprietor is in default, then use the proper channels under the Act, as pointed out in my earlier post above.

Here is a famous reported case on a proprietor who successfully obtained an injunction against a MC who blocked his access card and refuse him entry into the parking lot of the condo.

If you take the time to read it, it would be very knowledgeable and I think it can answer the questions posed by TS in this topic.

This case also states that even if the House Rules/Deed of Mutual Covenant provides that the MC can block the access card of owners who do not pay maintenance, it is illegal and void as it goes against the Strata Title Act. So the posts by some forummers above that if it is provided for in the House Rules, then it can be done - with respect, that argument is not sustainable in light of the decision in this case.

To date, there is no judgment by a superior Court to overrule this case, so the law still stands despite it being a High Court decision.

John Denis De Silva v. Crescent Court Management Corporation [2006] 2 CLJ 605

 John_Denis_De_Silva.pdf ( 98.14k ) Number of downloads: 262




This post has been edited by dariofoo: May 23 2012, 06:13 PM

Dario, actually condos receive water from a main water supply from the supplier (varies from state to state). Then from the main, the MC will have many different pipes going through an in house meter to record the water usage. So I personally believe in this case, the proprietor actually applies for water supply from the MC. And the MC will provide such services as long as the proprietor pays. One trick which I like to use is that if the proprietor insists on paying for only water usage, i will take whatever money and then issue him a receipt for part payment of maintenance. Unfortunately base on MC records, the proprietor will be seen as not paying water bill since we take the oldest owing sum. I don't think this is self help right?

Access as per what I have corrected myself above. Cheers mate.

On water bills, it depends if your bill comes from management or from the state water company.

if from management, then the management can have the right to cut water.
if from state, then its not allowed to cut

same goes to power. its true especially for shops like mid valley.

If the MC is the one who is deemed to be the supplier, then there ought to be a proper agreement whereby the owner agrees that the MC retains the right to interrupt supply if there are sums due and owing. In such cases, it would not be deemed as self help, as the owner has consented to such an arrangement.

Any other scenario and it would be self-help and thus illegal.

What position are you in with regard to this scenario? A member of the MC? Tenant?

Hahaha, a proprietor with interest in the building. With such methods we have indeed reduced the cases of deliquencies. I don't like to take council members role but starting a property management company soon. So gotta get myself prepared though I won't be actively involved in the day to day running of that particular business.

There are lots of grey areas for this strata act 2007. You should know very well our law and enforcement. The burden to prove these grey areas are at the owner's hand if he/she decided to bring the case to the court.

He/She might get the injunction to temporary uplift restriction, but high change he/she has to pay additional legal costs + outstanding maintenance fees + water bills + HIGH % INTEREST (10% at my place). MC/Property Manager's legal fees will be withdraw from Maintenance account. So, even you win the case, but still need to pay the outstanding amount, and you are contributing to MC/Property Manager's legal fees as well. If you lost the case, then you have to pay more $$$$$. Worth to try?

Having say that, don't mean I'm totally right. One important thing for all strata property owners is they are liable to pay all related fees stated in the DMC. If one don't like to pay that, then choose the individual title property then.

The key objective to form the JMB is to manage the property and ensure all common facilities are well keep. The JMC is the decision maker and the Property Manager is just a runner. The ideal case case all owners pay they due on time. But, this never so easy!

1)also can put name owner list, unit number refuse to pay at near lift or gate house,let them shame
2)owner hav to clear all outstanding fees before release consent to new buyer
3)write a letter remind that hav a penalty 10% a year

done all that lo

1. People who refuse to pay have extremely thick skin, do you think they will even know the word of 'shame' ?
PS. There are also some thick skin people in this forum....

2. When vendor sells the property, this is already in the S&P. But how often do they sell ? Every 5 years, you cannot collect your fees. Too long to wait !

3. 10% penalty will work for some but not all.

This post has been edited by jalsrix: May 27 2012, 11:27 PM

Perhaps management offices can also start up a distribution list to all unit owners showing latest updates on the prop, collection status, etc.

This post has been edited by icez: May 27 2012, 11:42 PM

we are a management company that does collection for buildings such as condominiums,shop lot or any residential areas.

Any company that are having problems with maintenance fees collection can call in for further information. we also give advice to the chairman on how to go about before we come in for collection.

Thank You,

cool

hi just wonder if we take legal action against these maintenance defaulters, is it ok to charge them back the LOD fees even after they have paid immediately .

after vp is it possible i dun pay maintenance for long period like 3-5 yrs? then pay one time after selling? they will charge the interest or not ah?

depending on the management committee, usually they will fetch you warning letter, some resort to cutting your water/electricity. Deny your car park access and etc. Last resort is issue lawyer letter.

This is governed in the 1985 strata titles act clauses 52-55recovery of sum as debt due to management corporation.

Mgmt Corp (MC) will need to serve letters to the owner. If the owner continue to repeatedly ignore the letters, MC can apply to court to serve a warrant of attachment to the owner's belongings in the building. The attached belongings can be auctioned off if the owner still dont want to pay after a certain period. Finally the owner can be fined up to RM5000 and further fine of up to RM50/daily if contribution remains unpaid after conviction.

wow... meaning cannot skip maintenance fees lar.. what if strata release after 1-2 yrs? can skip or not? will still bind to strata agreement?

must pay...nw new act legal proceeding from JMB or mgmt wuld be much cheaper...

I have a case here to ask for opinion: There is mismanagement of previous Management Corporation that doesn't do properly their job in Management Fee collection. My sis bought over a unit whereby she already check with the previous tenant that no outstanding management fee. (Now obviously previous tenant lie on this).After few years, change of new management company, suddenly ask for the outstanding amount incurred by the previous tenant to current owner. The first thing is how do the management at that time allow property transfer before they validate all previous owner outstanding management fee settle??Why we the new owner must bare the cost since it is the responsibility of management to validate outstanding fee together with the lawyer film whom in-charge of this property sales?Since my sis take over as owner, she never miss up even 1 month to pay management fee on time for the fee incurred all time along her ownership.Now the management block our access card into the condo. Could we the owner take legal action towards the management for the denied access to condo due the their fault of not settling the outstanding debt with previous owner? If we would like to take legal action, is this can make through Hal Ehwal Pengguna?Is management act of block access card is valid or legal in this condition?If it is not legal we would collect up the evidence of the management act and prepare for sue in court.

I have a case here to ask for opinion: There is mismanagement of previous Management Corporation that doesn't do properly their job in Management Fee collection. My sis bought over a unit whereby she already check with the previous tenant that no outstanding management fee. (Now obviously previous tenant lie on this).After few years, change of new management company, suddenly ask for the outstanding amount incurred by the previous tenant to current owner. The first thing is how do the management at that time allow property transfer before they validate all previous owner outstanding management fee settle??Why we the new owner must bare the cost since it is the responsibility of management to validate outstanding fee together with the lawyer film whom in-charge of this property sales?Now the management block our access card to the condo.All time from the moment my sister become the owner, she never fail to pay the management fee for every month. Any legal action of the owner can be taken against the management in this condition?Can we bring the access card block case to Hal Ehwal Pengguna? I want to ask the act of denied access by management due to their fault of fail to settle outstanding fee with previous owner is it valid or legal? If this is not valid, we would collect evidence of management denied our access into condo to get them sued.

bought over from previous owner i presume
for the sale to happen, the management office will need to issue a letter to declare that the previous owner has no outstanding management fees

ask your lawyer about this letter and it should help you clear your name.

You need consent from management otherwise no change of details allowed hence you gotto pay up before all things are cleared for transfer!

Hi.. Recently the management like install access card facility at the lift... Is tat really lawful? Or just abusing the word common facility.

One thing to ponder.
Who decides the maintenance rate and the justification of such rates?
And how do we know they are actually using it for the condo upkeeping rather than swindling it for personal gain?

I don't see how it is an unlawful move.

Life is a common facility that under under JMB/MC management.

It is for security reason, I don't see how it hurts the owner benefit.

No standard rate, it depends on JMB/MC to balance the book in term of financial.

JMB/MC is voted in by the owner of property, so in other word owners themselves decide.

Any maintenance fee payment is paid to MC account, not to any personal.
While the account needs to be audited every year.

MC is the body to ensure the money is well managed, so owner must vote in the committee carefully to ensure the committee talk well care on the money collected.

yes its lawful. in fact its a good idea. the lift cost a lot to maintain u know.

if no pay = walk stair.

I presume the above also applicable to tenant and their visitors?