RECOVERY OF OUTSTANDING MAINTENANCE CHARGES BY THE JOINT MANAGEMENT BODY (JMB)
All condominium unit owners are obliged to pay maintenance fee as it is essential for the joint management body (JMB) to maintain and managed the common properties as per stated in the Strata Management Act 2013.
Section 33 (1) of the Strata Management Act 2013 (SMA 2013), grants the power on the JMB to collect charges and recover from any parcel owner, outstanding charges, any sum expanded by the JMB and any expenditure incurred. The recovery is important to make sure that the funds are sufficient to manage the development area.
But firstly, we need to understand what does it mean by maintenance charges. Maintenance charges includes;
- all charges paid by the parcel owners or proprietors of the JMB at the material time;
- all or any part of the charges imposed by or payable to the JMB;
- all monies derived from the lease, rent, or use of any property which may be lawfully charged by the JMB;
- all other moneys and property which may in any manner become payable to or vested in the JMB in respect of any matter incidental to its functions and powers; and
- all other monies lawfully received by the JMB including interest, donation and trust.
Meanwhile, Section 21(4) and 33(1) of the SMA 2013 describe debt due as expenditure of any money expended by the Joint Management Body in performing repairs, work or act’ and payment of any amount of money lawfully incurred in the course of the exercise of any of its powers or functions of the carrying out of its duties or obligations’ which shall be guaranteed by the parcel owners. Fine imposed is also a debt.
PROCEDURE TO RECOVER OUTSTANDING MAINTENANCE CHARGES
Firstly, to recover any outstanding charges, JMB may issue an invoice to the parcel owner to pay charges and contribute to the Sinking Fund and if any sum remains unpaid by the parcel owner, at the expiry of 14 days, the JMB may recover the sum according to Section 34 of the SMA 2013.
To recover debt due, JMB may issue a notice to the parcel owner and claim for the debt due and if any sums remain unpaid, at the expiry of 14 days, recover the sum provided in Section 34 of the SMA 2013.
Upon expiry of the 14 days’ notice, the JMB can formally issue a demand notice and serve on the parcel owner demanding payment of the sum due not less than 14 days’ notice in Form 11. After expiry of 14 + 14 days, if the sums remain unpaid, the JMB may proceed with summons or claim in a court of competent jurisdiction or in the tribunal for the recovery.
WHAT ARE THE SENTENCES FOR THE DEFAULTER?
It must be noted that pursuant to Section 34(3) of the SMA 2013, any defaulter that fails to comply with the notice given, they may be liable to an offence and shall upon conviction, be liable to;
- A fine not exceeding RM5,000.00; or
- Imprisonment term not exceeding three years or to both.
In case of continuing offence, the defaulter may also liable to a further fine of not exceeding RM50.00 for every day or part thereof during which the offence continues after conviction.
RECOVERY BY FILING OF CLAIM TO STRATA MANAGEMENT TRIBUNAL
Apart from that, the JMB also can take action by filing a claim to the Strata Management Tribunal. Through tribunal claim, the JMB able to obtain Awards which is more effective and efficient. However, it must be noted that to file a claim to tribunal, the amount of claim must not exceed RM250,000.00 as the tribunal has its own limits of jurisdictions.
Below are few things need to be considered by JMB before filing a claim to tribunal;
- That the matter falls under jurisdiction of the Tribunal according to Part 1 & 2 of the Fourth Schedule of SMA 2013;
- In accordance with Section 105 and 107 of the SMA 2013.
If the JMB able to obtain an award from the Tribunal, any person who fails to comply with the Tribunal’s award shall be deemed to commits and offence under Section 123 of the SMA 2013. Upon conviction, shall be liable of the following;
To a fine not exceeding RM250,000.00; or
Imprisonment for a term not exceeding 3 years or both.
For continuing offence, to a further fine not exceeding RM5,000.00 for every day or part thereof during which the offence continues after conviction.
RECOVERY BY ISSUANCE WARRANT OF ATTACHMENT
Apart from the above, JMB may also recover the outstanding charges vide Commissioner of Building (“COB”) to issue a Warrant of Attachment against the defaulter.
The JMB must firstly writes to the COB to apply for the issuance of Warrant of Attachment against the defaulter. Upon issuance of the said warrant, the JMB may execute force entry to the defaulting parcel or unit if they are not allowed to get in the unit upon request. After that, the JMB is required to prepare a list of inventories to attach any moveable property found in the parcel unit of the defaulting owner.
The COB then required to authorise the attachment of the said moveable properties and JMB subsequently may sell them vide public auction under the supervision of COB and the profits from the auction must be remitted to the JMB at that material time.
RECOVERY THROUGH FILING OF CIVIL SUIT
For this step, the JMB must appoint a lawyer to file a civil suit against the defaulter. It is where the lawyer will start with issuance letter of demand (“LOD”) to demand for outstanding maintenance charges. If they still fail to satisfy the LOD, JMB then will be advised to proceed with filing of Writ of Summons against the parcel defaulter.
What is Writ of Summons?
Writ of Summons or commonly called as Writ is the first legal proceeding which enable the aggrieved party (the Plaintiff) to claim their rights against the defaulting party, which is the Defendant. Upon receiving the Writ, the Defendant is required to enter an appearance to the Court if they wished to enter their defence.
What are the documents needed to file a civil suit against the defaulter?
The JMB is required to prepare the following documents for lawyers’ easy reference;
- Latest statement of account;
- Name and identification details of the parcel owners;
- Last known address of the defaulter;
- Award, if the award against the defaulter already decided by the Strata Tribunal.
How to serve the Writ towards the defaulter?
Upon receiving the sealed copy of Writ from the Court, the lawyer will proceed service upon the defaulter/ defendant via hand and/ or using AR Registered post. If service by hand, the writ shall deem to be served once the defendant received and sign on the acknowledge receipt. If using AR Registered post, the writ shall be deemed to be served once the proof of service return.
What can be done by the JMB if the parcel owner still does not pay even after receiving the writ of summons and judgment made against them?
The JMB can proceed to issue a reminder notice to the parcel defaulter and demand them to make payment within 14 days. If they failed and/ or neglect to comply with the Judgment given, JMB may proceed with execution proceeding against the defaulter such as bankruptcy proceeding, garnishee, writ of seizure and sale, etc.
