JMC: To serve or self-serve?

By Chang Kim Loong

As a member of a Joint Management Committee (JMC) or Management Committee (MC), one often ask if he/she genuinely passionate to volunteer his/her time to serve for the wellbeing of his/her community.

Does the committee member have a personal agenda to take advantage of his/her position to help himself/herself with jobs, status, information and gains to enrich himself/herself?

Let’s look at the scenarios below:

Scenario 1:

There is a real estate agent, who is in the JMC, and he seems to have all the information of the owners (names, addresses and contact numbers). He periodically contacts me and my neighbours whether we wish to sell our condominium units as he always claims that a certain investor or investors wish to offer a “high price”. How did he obtain our information and contact numbers?

Scenario 2:

You have diligently paid your installments to your bank for the last 10 years and the quantum of indebtedness has been significantly reduced. Then one day you receive a call from a financial planner, who is in the MC, and he asks “Do you wish to refinance your property for another loan? As a financial planner, I can arrange it with the banks. You could use the money to buy another property’.

Scenario 3:

I can do a better job to run the management and maintenance of our own apartment building. My team, although unlicensed, can also do property management by making the meagre deposit (refundable) as bond to the JMB or MC. Trust me that I will not deplete your entire sinking fund and abuse my position’.

Scenario 4:

During the AGM, this big time contractor-cum-investor is very vocal in asking the ‘right questions’ as many parcel owners are not familiar with Strata Management Act, 2013. Consequently, he is made the chairman of the JMC. He always seems to have his own friendly suppliers, contractors, service providers, insurance brokers and even Airbnb operators for everything in the management and maintenance of the common property. In fact, he has pecuniary interest in everything he does.’

The above scenarios, especially 1 and 2 are quite often heard of whereby personal information are divulged to others and people profit from the sale of the personal information.

Personal Data Protection Act, 2010

In Malaysia, we have the Personal Data Protection Act, 2010 (PDPA). It is aimed at preventing abuse of personal data for commercial purposes and has been implemented since Nov 15, 2013.

The Act plays a crucial role in safeguarding the interests of individuals and made it illegal for corporate entities and individuals to disclose, sell personal information or allow the use of data by third parties.

The penalty for non-compliance is between RM100,000 to RM500,000 and/or between 1 to 3 years imprisonment on conviction.

Challenging duties

In the SMA, the JMC or MC should comprise a minimum of three persons and a maximum of 14 persons who are owners eligible to vote. There shall be a chairman, secretary and treasurer, all of whom shall be natural persons.

Although these are voluntary positions, they have to be taken seriously because they involve people’s wellbeing and their investments.

Most owners’ corporations are headed by a leader who might also be the chairman at meetings.

Strong and principled leadership is an essential component of every successful JMC or MC. Very often, those who speak the loudest at meetings are elected but that may not be sufficient for the long term.

Be wary of self-serving candidates

Newcomers frequently make good volunteers but sometimes are distracted by insisting on covering old issues.

How much interest has the candidate (during AGM election) shown in the community and its undertakings? Did he suddenly appear to be interested? Have there been regular meet-ups, participation in activities? If not, investigate the sudden interest.

Be particularly careful about the ‘one-issue’ candidates who volunteer because they want to ‘take-over’ property management, as in our Scenario 3 above.

Be particularly cautious of those ‘unlicensed property companies/ property managers’ that have managed to infiltrate committee members in the JMC and MC, if they are not themselves in the committee.

They may paint a glossy picture of what they can do through their ‘years of experience’ or their so called “knowledge of the SMA”.

But do they have the professional qualifications, management and technical experience and passed the stringent test of professional competency?

Are they registered with the legislated Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP), which is the sole statutory regulatory Board governing property managers that issues licenses to those registered ones in Malaysia under Act 242 ?

A candidate should not have conflicting personal and professional commitments.

For example, the unethical estate agent and the overzealous financial planner, may have particular interest in ‘serving’ the JMC or MC to obtain private information and details of owners so that they may gain advantage and priority (with their fellow owners) for their listings purposes (sale, purchase, financing and rent).

This clearly contravenes the PDPA legislation and the aggrieved party may lodge an official complaint to Ministry of Communications & Multimedia, Malaysia for an investigation.

Person(s) having pecuniary interest

“Pecuniary interest” is an interest that a person has in a matter because of a reasonable likelihood or expectation of appreciable financial gain to the person or through another person with whom the person is associated.

Therefore, it is best that any person or owner, who has pecuniary interest or vested interest in the management and maintenance of his stratified building, should recuse himself from seeking election to the JMC or the MC.

In any decision making process of a subject matter by the committee, a member of the committee who has direct or indirect pecuniary interest or vested interest in the subject matter should declare his interest and immediately recuse himself from the decision making process of the committee on the subject matter.

Although this is not provided in the SMA or Strata Management Regulations, it is the fiduciary duty and responsibility of any committee member for good self-governance.

There is, however, Section 87 in the SMA that prohibits appointment of a managing agent having professional or pecuniary interest. Section 87 is reproduced below for clearer understanding on the issue of having vested interest in the issue of management and maintenance of the stratified buildings.

Section 87

(1) A person shall not be appointed as a managing agent if he has a professional or pecuniary interest in any building or land intended for subdivision into parcels or any subdivided building or land.

(2) A person is regarded as having a professional or pecuniary interest in any building or land intended for subdivision into parcels or any subdivided building or land if –

(a) he has been responsible for the design or construction of the building;

(b) he or any of his nominees, officers or employees has any material interest in the

building or land intended for subdivision into parcels or any part of the building or land;

(c) he is a partner or is in the employment of a person who has any material interest in the building or land intended for subdivision into parcels or any part of the building or land; or

(d) he or his family holds any interest in the building or land intended for subdivision into parcels or any part of the building or land whether directly or as a trustee or otherwise.

Essentially, while it is important to conduct a proper research before purchasing a housing unit, it is crucial to ensure those you vote as a member in the JMC or MC are genuinely interested in protecting owners’ interest and thus preserving or enhancing the value of the property.

This article is written by Datuk Chang Kim Loong, Hon. Sec-Gen of the National House Buyers Association (HBA), a non-political, not-for-profit organisation.

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