Love your neighbours, strata wise

IF you walk into a property showroom today and decided to invest and make a purchase, it is very likely you will be buying yourself a ticket into an experience in “Strata Living”.

A strata property development scheme is no longer a simple tall building with many unit owners sharing the common property; it is also horizontally possible within the ever popular “secured” gated and guarded scheme to even sharing the usage of the building to cover commercial, retail and every other possible element that enhances your urban life style today that focuses on both convenience and connectivity.

Here are three hard facts that you need to deal with:

• The developer will not be managing the strata property forever; the owners need to take full responsibility over the entire building eventually.
• The service charge payable by each unit owner has no buffer and works on a presumption of a 100% prompt payment. Any non-payment is a compromise to the budget to manage the building effectively.
• The building standard and lifespan are not to last the entire tenure of the underlying master title. Wear and tear is to be expected and replacement costs is to be borne from the sinking fund where the sufficiency at the material time is questionable.

The basis of strata living is on self-management and self-sufficiency. It can only function in optimum when all the owners participate. The initial period driven by the developer is meant to be a grace period for the owners to learn the trade in managing their own property. The 2007 legislation in forming the joint management body is the clearest manifestation of such intention.

With the intended issuance of strata title simultaneously with delivery of keys to the units, owners should learn even faster as the concept of joint management will be eliminated effectively and that the owners shall immediately take charge of the strata scheme through the formation of the Management Corp.

While there are developers that are keen to ensure that these strata schemes developed by them to be continuously well maintained as part of the ongoing branding portfolio, the standard of maintenance is essentially in the hand of the owners. Pointing fingers in this regard would still ultimately lead back to the owners. It is the owners’ in-charge and thus it is only wise for the owners to take charge.

Therefore, a key consideration in selecting a strata scheme is always whether it is more likely to be owner-occupied or it is more driven by investors that are keener for gains and returns.

The common presumption is always that the users are likely to participate effectively in the management of the scheme. Passing through the property in the evening with just a few lighted units is certainly not an encouraging sign.

In addition to that, no building is ever built to last forever. The developer delivers the property subject to a defect liability period contractually or imposed by the law and then the longevity of the building is then in the hand of its occupants. There is always an expiry date even with timely services and parts replacement from time to time. Owners need to be prepared for further reinvestment to get the maximum values out from the property.

With the duly passed and yet to be effective Strata Title (Amendment) Act 2013 as well as the Strata Management Act 2013, the legal framework is playing catching up. The practical issue is whether the occupants have the correct attitude and mindset living in a Strata scheme?

For ages, we have practised the concept of “My home, my kingdom” where we have fenced up the boundary of our piece of land and sit on the very throne of our own building that we called “home”. Then few kingdoms grouped up together to form a small community where we usually called “Taman”.

Back then, living in Taman has been harmonious and governed by the voluntary “Rukun Tetangga” as a mean of self-help and cross guarding for community living. Not to forget also the Muhibbah under a subject in school named Civic that tough us how to behave as a citizen of a community which was since then replaced by Moral in year 1989.

There was not much issue of security and sharing of common facilities (even with no form of ownership like a strata scheme) where everyone helped out each other to maintain a peaceful living surrounding.

Strata living however is a different ballgame altogether. It works on the basis of an almost agape concept of “love your neighbours” rather than setting the boundaries of your “kingdom”.

Once you bought into a strata scheme, the involuntary community living starts. Like it or not, you need to work together with your fellow residents and homeowners to make your strata living a success.

Here is the deal: a strata owner is no different from a shareholder of a public listed company. While the legal regime expects a high standard of corporate governance from the management, it can still go haywire without the active participation of its owners. That’s why you better start loving your neighbours and take charge to first and foremost protect the very investment that you live in.

>> Chris Tan is the founder and managing partner of Chur Associates
>> The views expressed are entirely the writer’s own.

 

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