(Delivered in Parliament on 11 September 2017)
Mr Speaker, this Bill introduces fairly substantial amendments. While I do agree with most of the amendments here, I have some concerns and require some clarifications regarding this Bill.
Suspension of Management Council and appointment of official management
Clause 53 of the Bill introduces new sections 126A and 126B which confers on the Commissioner new powers to suspend the management council of the management corporation (MC) if it is satisfied that the MC is unable or refuses to carry out a duty under the Act that must be urgently carried out to remove any danger to the health or safety of the owners or occupants of the units and for such MCST to be placed under so–called “official management”. These are very stern if not drastic measures, potentially threatening the status quo of the management of a MCST. What will be the circumstances that the Commissioner be considering when making a decision to suspend the MC or to appoint an Official Manager? Will this recourse be abused by minority owners in the MCST who may for reasons unrelated to the conditions in Sections 126A and 126B be disagreeable with the current management of an estate e.g. rival owners who may have lost out in MC elections or are disagreeable with the current management’s plans or management priorities? I am concerned that the condition stated in clause 126B(1b) is too general and may be opened to unintended abuses. Perhaps the requirements should have been spelt out in greater details in this Bill or even in the subsidiary legislation under the Act for better certainty and to prevent abuse.
Definition of ‘common property’
There is an expanded definition of common property under the interpretation section in the new Section 2(c) with 4 areas namely (i) pipes, wires, cables or ducts used or capable of being used by 2 or more occupiers, (ii) the cubic space enclosed by a structure enclosing pipes, wires, cables or ducts, (iii) any structural element of the building and (iv) the waterproof membrane attached to an external wall or roof. The amendment also provided 5 examples.
While the inclusion of the above areas may provide helpful access and management by the MCST and the MA, I am concerned whether it will also provide more grounds for misunderstanding or disputes between owners and the MCST or MA.
There are likely to be cases that may be different from the 5 examples given and may not fit in clearly to the straitjacket of the 4 areas in Section 2(c).
On the other hand, the new 4 areas in Section 2(c) may create new scenarios where disagreement or dispute may result. Let’s take example (d) in the new Section. It appears that a fire sprinkler protection system is now part of common property. Owners of an office strata unit may now need MCST’s consent to make changes to the fire sprinkler system within their strata unit. And if so, what if a MA, MC or MCST unreasonably withhold consent to the work intended or requires something to be done to the disagreement of the owners for reasons of costs, design or otherwise? Would a renovation not be held up? What are the options opened to owners in such situation if they do not agree with the MA or MCST?
Finally, with the new areas in Section 2(c), I am concerned whether or not this may become a double edged sword for the MCST or MA or even owners as parties learn who will be responsible for what. Some owners may take the opportunity to push the boundary and push certain responsibility to their MCST.
Imposing budget
The new Section 38(3A) imposed upon the MC the need to have the budget for (1) the organising of any social, cultural, educational or sports activities that is for the benefit of all subsidiary proprietors and occupiers as well as (2) engagement of legal services for the management corporation, to be placed for approval as part of an annual budget at the AGM. The above two items of expenses are new additions under this Bill and inserted in Sections 38(3)(d) and (e). Organising of social, cultural, educational or sports activities are not new to condos or private estates as such. Neither is the need for MC to use legal services. However, what is new is the budgetary requirement in Section 38(3A) i.e. the need to have the budget be approved for these items at an AGM. In Section 38(3B), a further new amendment proposes that the MC may convene an EOGM for approval of budget for unforeseen or urgent expenditure for the same 2 items. I find this slightly troubling. First, the need to go to EOGM for these two items of expenditure may be cumbersome for not just the MC but the residents as well. The attendance of residents in most MCST AGM is hardly ever glowing. If the MC wants to hold a simple event for the residents which was never budgeted previously, it would be put off by the trouble to try and hold the EOGM, not to mention the likely difficulty of getting a quorum. Residents may feel that it may not justify their time. The new measure of requiring the budget to be approved beforehand at the previous AGM may also mean that MCs may resort to the practice of setting aside a kiasu budget which is needlessly larger than necessary and may not encourage prudence. It may stifle attempts by active MC to constantly come up with new activities to encourage residents to fraternize and also building up of the community relations within the estate. Would this lead to external organizations, whether commercial or statutory, coming up with sponsorships of events for their own agenda, particularly given that budget is always an issue which affects MCSTs.
Would it not be better to have a more general regulation leaving it to owners in each MCST to decide what kind of budgetary constraints or authorization they wish to impose on their MC? This can be done at AGMs or even through the individual byelaws of each MCST? Does the law need to interfere now with this new budgetary requirement?
Improvements which increase the floor area
May I clarify with the Minister, for the proposed amendments to Section 37, specifically the new subsection in Section 37(4A) where the MC will have power to require any owners to carry out rectification works in the case of any breach of Section 37(1) and (3), will the MC be able to take action against the current owners if the work was carried out by a previous owner?
If the answer to my above question is yes, would the owner be able to seek recourse against the previous owners and if the position on this is uncertain, would the minister consider amending the legislation to allow the right of recourse at least in certain prescribed situations?
Separately, if an action is being taken by the MC under Section 37(4A) against an existing owner and such action has not come to an end, will the MC be entitled to file a caveat against the property in case the property is being put on the market? This may serve to protect innocent buyers who may not be informed of the alleged breach or any related action the MC may be taking against the existing owner.
Ban on double appointment holders in MC
The new Section 53(9A) prohibits a person from holding more than one appointments in the MC for the following appointments: chairman, treasurer and secretary. While I can understand the rationale for this new rule, I would like to ask the Minister, whether the proposed exception that the Minister has just mentioned in his speech also apply to cases where a MCST is owned by a few owners e.g. 2 or 3 owners?