Heavier sentence should be meted out for non-compliance of Tribunal Awards

By Chang Kim Loong

The recent successful prosecution of cases involving failure to comply with Strata Management Tribunal (SMT) awards is a milestone to the Strata Management Act 2015 (SMA) and sends an important message to the stratified properties stakeholders that awards decided by SMT must be treated seriously.

Recently, the Subang Jaya Municipality (Magistrate’s) Court convicted and fined a defendant (defaulting strata owner), who failed to comply with an award of the SMT ordering payment of outstanding charges and contribution to sinking funds within 30 days from the date of award.

This recent development is long overdue and is certainly a positive development in the correct direction. The success of the recent prosecution cases further boost and bolster the sanctity of SMT’s awards. 

The positive effect of these prosecution cases will hopefully not confine to cases involving default in paying maintenance charges. It is expected that the successful prosecution will also send a chilling message down the spine of the defaulters and to members of public and stakeholders to treat all awards of SMT seriously or risk facing penalty such as fine or imprisonment or both. 

The High Court has the power to impose heavier punishment and higher penalty fine within the limit of Section 123 of the SMA (namely RM250,000 fine or imprisonment for a term not exceeding 3 years or to both) depending on the gravity of the offence and consequences of non-compliance with SMT’s award.

It is worth highlighting that the punishment can also be extended to individuals having been responsible for the ‘management and control’ of the affairs of a body corporate who disobey the awards. 

In this regard, it is important for all committee members of management bodies to closely monitor the status of each case filed against the management bodies at the SMT and take appropriate action to ensure compliance, if need be.

SMA is not a simple piece of federal statute

Since coming into force on 1.6.2015, the SMA has immediately become an important legislation as stratified developments (residential, commercial and mixed) have become a norm in densely populated areas such as Klang Valley, Ipoh, Penang and Johor Bahru. 

The SMA is by no means a simple piece of federal statute. It governs the relationships and interaction between developers, joint management bodies, management corporations, parcel owners, commissioner of buildings, managing agents etc. It is primarily for this reason that the drafters of SMA saw fit to establish a quasi-court in the form of the SMT to provide a speedy and efficient channel to resolve disputes between stakeholders of the SMA.

The SMT has jurisdiction to hear disputes of various natures ranging from simple claims involving recovery of charges to more complicated ones involving exercise and performance of duty, power and functions pursuant to SMA and subsidiary legislation made thereunder by various stakeholders.

In short, it is a quasi-judicial body entrusted to hear and determine strata management related disputes.

Section 120 of the SMA provides that an award is final and is binding on all parties to the proceedings. The same provision further provides that awards shall be deemed to be an Order of Court and could be enforced by any party to the proceedings. 

In the event an award is not duly complied with, a party whose award is in his favour, may request the secretary of the SMT to send a copy of the award to the Courts having jurisdiction in the place to which the award relates or in the place where the award was made, and the Court shall cause the copy of the award to be recorded. 

Once this is done, the party seeking enforcement may file enforcement proceedings at the Courts. However, the reality is far from ideal. Sometimes, a winning party may have financial difficulty to apply for enforcement in Court through the civil processes and is left with a paper award. 

In addition, the SMT will not seek to enforce its award upon handing down its award. This situation, if left unchecked, may render SMT a toothless tiger. In order to give more force to the awards granted by SMT, the SMA has criminalised non-compliance with awards of SMT. 

Datuk Chang Kim Loong is an Hon Sec-Gen of the National House Buyers Association (HBA), a non-political, non-government and not-for-profit organisation.

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