Strata titles

05/14/14 Ainul Jaria Maidin -LAW 3111-03 1
STRATA TITLES-STRATA TITLES-
titles for subdivided buildingstitles for subdivided buildings

05/14/14 Ainul Jaria Maidin -LAW 3111-032
What is a strata title
 Strata title is an IDT issued in respect of a
subdivided building. It is similar to the IDT
issued in respect of a subdivided land.

Need for strata title
 Post independence economic development and
social restructuring brought about the influx of
rural communities into urban settlements.
 This cause pressure on the existing housing and
increased the demand for housing and proper
infrastructure.
 The need for proper housing brought about the
government policy to promote various types of
housing projects.

 Pressure on the existing land resources
were felt. Furthermore, there is a need to
provide affordable housing for the low
income earners since land in urban areas
were getting expensive.
 The government decided to build high
rise building to promote organised
development.

Law Governing Strata Titles
 The Strata Titles Act 1985 (Act 318/85) came
into effect on 1 June 1985. STA is applicable
only to the West Malaysian states. Modeled after
the New South Wales Strata Titles Act 1973 and
the Singapore Land Titles (Strata) Act
 In Sarawak –Sarawak Strata Titles Ordinance
1974 (No.3 of 1974)
 In Sabah – Sabah Land (Subsidiary Title)
Enactment 1972 (No.9 of 1972)

 It repealed the former strata provisions in the NLC
1965 which governed strata projects, including
applications for subdivision of multi-storey
buildings and the subsequent issuance of strata
titles which were formerly called 'subsidiary titles'
 It came into effect on 1st
of June 1985 vide PU (B)
276/85.
 In Faber Merlin (M Sdn. Bhd. & Ors. V Lye Thai
Sang Wan Suleiman FJ said, “ It is not in dispute
that strata title have as yet never been issued in this
country, and that no strata titles exist.”

Weaknesses of STA
 The STA is a relatively short statute; it contains
only 85 sections, four schedules and a few
prescribed forms.
 Inadequacies in the STA at times, make
interpretation of some of its provisions difficult
to comprehend. A glaring example of such
shortcomings would be the lack of minute
provisions to regulate party walls.
 This could, in turn, lead to a reliance on
common law principles on this issue. At times,
professionals whose sphere of work is related
to the provisions of the STA have to resort to
self-improvisation.

Application of NLC 1965
 Certain shortcomings in the STA may be
resolved by resorting to the provisions of
the NLC.
 The STA is an extension of the NLC.
Section 5 of the STA has expressly stated
that the STA shall be read and construed
with the provisions of the NLC as if it
were a part of the NLC. However, where
the provisions and rules contained in the
NLC are inconsistent with those of the
STA, the strata provisions shall prevail

NLC 1965 provisions
 This Act is modeled after Conveyance
(Strata Titles) Act 1961.
 See the statutory definitions of the terms
'subsidiary register' and 'subsidiary title' in
s 5 of the NLC.

 See also Ch 4 of Pt 9 (ss 151-157); Ch 2 of
Pt 10 (ss 161-163) and Ch 1 to Ch 4 of Pt
25 (ss 355-374) of the NLC. Those former
provisions in the NLC which governed,
inter alia, applications for subdivision of
high-rise buildings and the issuance of
subsidiary (strata) titles as well as strata
development have since been repealed by s
83 and the Fourth Schedule of the STA.

 No subsidiary or strata title has, ever been
issued under the 1965 experimental
provisions which governed the subdivision
of multi-storey buildings, the 'subsidiary
register' and the issuance of 'subsidiary
titles' in respect thereof

Application of NLC 1965
provisions
 Section 5(2) of STA expressly stipulates
that: 'The National Land Code and the
rules made thereunder, in so far as they are
not inconsistent with the provisions of this
Act or the rules made thereunder, or are
capable of applying to [strata] parcels,
shall apply in all respects to [strata] parcels
held under strata titles.'

 The relevant provisions on 'alienation' are
contained in ss 76 to 82 of the NLC.
Section 76(d), in particular, imposes a
mandatory duty on the State Authority to
specify one of the three categories of land
use for the piece of land which has been
approved for alienation. Implied
conditions which affect land subject to
any of the three specified categories of
land use are found in ss 114 to 119

The meaning and nature of strata titles
 It was once remarked that strata titles are
'titles in the sky'. This is to express a strata
concept which is somewhat different from
the conventional form of titles which relate
to landed properties. It is true that
conventional land titles do relate to
agricultural land, dwelling houses and
low-rise shop houses and factories. Such
land titles relate to the respective 'surface'
areas of the landed properties which are
demarcated by their boundary lines.

 This system of issuance of conventional
land titles is in compliance with Pt 5 NLC
which deals with the disposal of State land
via its alienation by the State Authority
 Strata titles, on the other hand, are
synonymous with 'cubic' spaces which are
to be built skywards and the issuance of
strata titles will be governed mainly by the
provisions of STA. But registrable dealings
in strata parcels are regulated by the
registration provisions of NLC

Nature of strata titles
 Similar to conventional land titles. In both
instances, the titles, both the issue and register
documents of title, can be issued only by the
relevant Registrar of Titles or, as the case may
be, the Land Administrator and no one else.
 If land titles or strata titles are issued by any
unauthorized persons or person, such titles will
be nothing more than forgeries. They will not be
marketable and will not pass good titles to their
possessors nor their purchasers, notwithstanding
that the purchasers are bona fide persons and
have purchased for value.

 Other than this observation, it may be said
that all register copies of land titles and
strata titles which have been properly
issued under the hand and official seal of
the relevant Registrar of Titles or the Land
Administrator are guaranteed by the State
under one of the fundamental principles of
Torrens land law.

Application for Subdivision of
Building
 Part II STA
 S.6 STA- Buildings capable of Being
Subdivided
Conditions for Subdivision of Building
into parcels to be held under strata titles
or into accessory parcels
a. Any building or buildings having one,
two or more storeys
b. Building built on alienated land

a. held as one lot under final title or
qualified title. In 1996 Amendment STA
provided that land held under qualified
title which has been duly surveyed and in
respect of which a certified plan has been
approved by the Director of Survey as
also capable of being applied for
subdivision.

Compulsory Application for
Subdivision of Building
 The compulsory application is to be made
under two circumstances:
 Pursuant to s. 151A (2)(c)(I)NLC 1965
where it is provided that the application for
subdivision must be made within 6 months
from the date of completion of the
building.

 S. 8(1) STA the proprietor need to apply
for subdivision only if he has at any time
sold or agreed to sell any parcel in such
building to any person.
 The Director for Land and Mines can
pursuant to s.8(5) STA extend the time to
make application once.
 Failure to apply –offence
 Punishment –fine RM5000 and RM1000
per day as continuing offence.

Cases
 Lee Wai Kin v Yulek Sdn. Bhd. [1986] 2
MLJ 417 – It is the proprietor of the land
who applies for strata titles
 Syed Azman Bin Syed Mohamed v Lian
Seng Construction Co. Sdn Bhd [1992] 2
MLJ 842 – HC held that failure to
comply with time limits stipulated in
s8(2) &(4) does not mean that the court
cannot compel the proprietor of the land
concerned to apply for subdivision of the
building so as to obtain strata title.

Esther Tan Wooi Hong & Ors v Saujana
Holding Sdn Bhd & Ors [1997]3 CLJ 79
 The High Court held that failure to comply
with the time limits stipulated in ss (2) &
(4) does not mean that the court cannot
compel the proprietor of the land
concerned to apply for subdivision of the
building so as to obtain strata titles for the
parcels therein.

Although the proprietor would be considered
as having committed an offence under ss(5),
upon payment of the fine stipulated therein,
he could still apply for subdivision of the
building to the Director of Lands and Mines
or the Land Executive Committee, as the case
may be, who still has the power under ss(1) to
deal with such application.
In the circumstances, the contention of the
proprietor that it was too late for the court to
order him to apply for subdivision of the
building was rejected. The onus is on the
proprietor of any alienated land upon which
there is a completed building capable of
being subdivided to apply for strata titles.

Submission of Application for
Subdivision
 Pursuant to s.10 STA the following must be
fulfilled
 The prescribed application fees
 A proposed strata plan comprising of location
plan, storey plan in respect of each building
containing such details prescribed in s. 10(4) &s.
10(6)
 For a case relating to the responsibility for
payment of charges and expenses incurred in
applying for strata title, see Lee Wai Kin v Yulek
Sdn Bhd [1986] 2 MLJ 417.

 The certificate of license of land surveyor
that the building is wholly situated in the
land.
 The certificate of a registered architect that
the building is in accordance with the
approved building plans.
 A written consent from every person who is
holding a registered interest in the land
 The issue document of title to the land is
not in the possession of the chargee or
lienholder.

 The registered architect certification that
the building is in accordance with the
approved building plans.
 The subdivision would not be contrary to
any written law
 The subdivision would not be contrary to
any restrictions in interests
 The proposed share units assigned to the
parcels by the proprietors of the lot are
equitable

 No items of land revenue is remaining
unpaid
 Written consent from all interest holders
on land are obtained
 Each of the proposed parcel has adequate
means of access not passing through
another parcel

Conditions for Approval
 Director of L&M or the LEC will only
approve the application if it is satisfied
that the conditions in s. 9 STA are
satisfied
 A licensed land surveyor has certified that
the buildings are situated in the boundaries
of the land
 Permission from the relevant local
authority

Processing of applications for
Strata Titles

Application is made to the Land
Administrator, who upon being satisfied
that the documents are in order will
forward the application to the Director of
Survey.
Director of Survey will forward the
application to the Director of L&M or
LEC for approval.

Approval by Director of Land & Mines

 The Director of L&M will approve the
application if all the conditions stipulated
in s. 9& s.10(1) STA are fulfilled.
 He will instruct the Director of Survey to
prepare the Certified Strata Plan

Issuance of Strata Titles

 The copies of the certified strata plan will
be forwarded to the Director for L&M or
the LEC who shall direct the Registrar of
Titles to issue the separate strata title for
the subdivided building in accordance
with the provisions of s.5&6 STA

Problems in applying & processing
of Strata Titles applications

 Problems of the building encroaching onto
a road or over other roads. It is important
for the building to be situated within the
boundary of the land
 Minor changes carried out to the building
after approval of the building plan has
been obtained. The plans must be
resubmitted for approval thus, this will
cause further delay in making the
application

REGISTRATION OF STRATA TITLES
 S.15 - Preparation and maintenance of
strata register
 The Registrar shall prepare and maintain
for the purposes of this Act a register of
strata titles to be known as the strata
register.

DefinitionsDefinitions

Parcels
 In relation to a subdivided by building
means one of the individual units
comprised therein which is held under
separate strata title.

Accessory Parcels
 means any parcel shown in a strata plan as
an accessory parcel which is used or
intended to be used in conjunction with a
parcel eg. Car parks

Common Property

 COMMON PROPERTY
 Means so much of the lot as is not
comprised in any parcel (including any
accessory parcel) or any provisional block
as shown in an approved strata plan

Golden Connection S.B. v CSH Enterprise
Sdn Bhd [1995] 3 MLJ 731 – issues as to
whether a void (empty space) above ground
level was common property within the
meaning of STA.
HC-held that it was common property as the
void on the level of the mezzanine floor was
capable of being used in connection with the
enjoyment of more than one parcel ie.by
both the mezzanine floor owner as well as
the ground floor owner.

 See Faber Merlin (M) Sdn Bhd & Ors v
Lye Thai Sang & Anor [1985] 2 MLJ 380.

MANAGEMENT CORPORATIONMANAGEMENT CORPORATION
A body established to manage the affairs of the
building and any other related aspects

Establishment of MC
 S.39 STA -upon the opening of a book of the
strata register in respect of a subdivided building
a MC consisting of all the parcel proprietors
including in the case of phased development, the
proprietor of the provisional block or blocks
must be established
 The MC is not subject to the Companies Act
1965 (Act 125) nor the Societies Act 1966 (Act
335) as it is not established pursuant to either of
these Acts but ‘upon the opening of a book of
the strata register’


NAME OF MC
 The MC shall be known by the name
appearing in the book of the strata register
relating to a subdivided building, and shall
be a body corporate having perpetual
succession and a common seal

MC BODY CORPORATE
 The MC may apply to the Registrar for a
certificate certifying that the MC is a body
corporate constituted under this Act on the
day specified in the certificate

MC can sue or be sued
 The capacity to sue or be sued is not only
confined to contracts made by the MC.
Eg. MC can sue a person who has
converted the corporation’s personal
property or damaged the common
property to recover the property or
damages. In doing so, the MC must turn
to the general law to find its cause of
action in any action instituted by it.

 In RSP Architects Planners & Engineers v Ocean
Front Pte Ltd and anor appeal [1996] 1 SLR
113, the management corporation successfully
sued the developers of the condominium for
faulty construction of certain areas of the
common property. The Singapore CA held that as
the management corporation has certain rights
and obligations with respect to the common
property under the Singapore Land Titles (Strata)
Act and any breaches or failure to perform any of
the duties imposed by the same Act, would
entitled it to bring and maintain the present action
under the Singapore equivalent of ss (3) above
against the developers for damages.

 As to the cause of action which the MC
had against the developers, the Court of
Appeal made it clear that it had none in
contract. This was because the benefit of
the relevant clauses in the sale and
purchase agreements was intended to
govern the relations only between the
developers and their purchasers, as the
developers clearly did not intend to benefit
the subsequent purchasers down the line.

 Despite this, the MC could still recover its
losses because it had a cause of action in
tort. The degree of proximity between the
developers and MC was sufficient to give
rise to a duty on the part of the developers
to take care to avoid causing to the MC the
kind of damage the latter had sustained.

 Conversely, in Black v Body Corporate Strata
Plan No 4304 (unreported), referred to in Body
Corporate Strata Plan No 4304 v Albion
Insurance Co Ltd [1982] VR 699, a person has a
cause of action against the MC for damage or
injury arising out of its failure to maintain the
common property properly.
 In Black’s case, the plaintiff obtained damages
against the MC for injuries he suffered as a
result of a fall from an external stairway forming
part of the common property. His fall was
caused by the defective condition of a handrail
fitted to the stairway which was a concealed
danger known to the MC but not to him.

Council of Management
Corporation
 The MC shall elect a council which,
subject to any restriction imposed or
direction given by the MC at a general
meeting, shall perform the MC’s duties and
conduct the MC’s business on its behalf,
and may for that purpose exercise any of
the MC’s powers.

Duties and Powers of MC
S.43 STA

Duties of MC
 (a) to manage and properly maintain the common
property and keep it in a state of good and
serviceable repair;
 (b) to insure and keep insured the subdivided
building to the replacement value thereof against
fire and such other risks as may be prescribed
under this Act;
 (c) to effect such other insurance of the subdivided
building as may be required by law;
 (d) to insure against such other risks as the
proprietors may by special resolution direct;

 e) to apply insurance moneys received by it in
respect of damage to the subdivided building in
rebuilding and reinstating it in so far as it may
be lawful to do so, subject to any order made by
the court under section 56;
 (f) to pay premiums on any insurance;
 (g) to comply with any notices or orders in or
made by any competent public or statutory
authorities requiring the abatement of any
nuisance on the common property, or ordering
repairs or other work to be done in respect of the
common property or any building or other
improvements on the lot;

 (h) to comply with any such notices or
orders made in respect of any of the
parcels, if the proprietor fails to do so
within a reasonable time;
 (i) to prepare and maintain, in such form
as may be prescribed, a strata roll for the
subdivided building; and
 (j) to pay the rent of the lot.

 In Proprietors of Strata Plan No 6522 v Furney
[1976] 1 NSWLR 412, Needham J held that the
power and duty of the MC extended to the
addition of such things as draught resistors and
waterproof flashings in order to make the
common property waterproof. He also held that
the word repair in the New South Wales Act 1973
s.68(1)(b) (equivalent to s.l(1)(a)) clearly
included renewal and making good of that which
was not initially sound.
 This was followed in Simons v Body Corporate
Strata Plan No 5181 [1980] VR 103, a case from
the Australian state of Victoria.

 Holland J in Jacklin & Ors v Proprietors of
Strata Plan No 2795 [1975] 1 NSWLR 15
that the management corporation cannot
abdicate or diminish its statutory
responsibility for the administration and
maintenance of any part of the common
property.
 See also Allen v Proprietors Strata Plan No
2110 [1970] 3 NSWR 339.

 However, where part of the common
property has been granted by agreement to
a parcel proprietor for his exclusive use
and enjoyment thereof pursuant to by-law
3 of the Third Schedule, the MC may be
relieved of its obligation to maintain and
keep in a state of good and serviceable
repair that part of the common property
referred to above. As the case of Jacklin
illustrates, much would depend on the
construction of the terms of the grant
itself.

Powers of MC
 (a) to recover from any parcel proprietor any sum
expended by the MC in respect of that proprietors
parcel in complying with any such notices or
orders
 (b) to purchase, hire or otherwise acquire
movable property for use by the parcel
proprietors in connection with their enjoyment of
the common property;
 (c) to borrow moneys required by it in the
exercise of its powers or the performance of its
duties

 (d) to secure the repayment of moneys borrowed
by it and the payment of interest thereon by
negotiable instrument or by a charge of unpaid
contributions to the management fund, (whether
already levied or not) by a charge of any
property vested in it or by a combination of any
of those means;
 (e) to collect during the initial period by way of
contributions from proprietors in proportion to
the share units or provisional share units of their
respective parcels or provisional blocks; and
 (f) to do all things reasonably necessary for the
performance of its duties under this Part and for
the enforcement of the by-laws set out in the
Third Schedule

Duties and powers of the
original proprietor before the
establishment of the
management corporation
S. 61 STA

 (1) During the period before the MC comes
into existence, it shall be the duty of the
original proprietor—
 (a) to control, manage, administer, and
keep the common property in good repair;
 (b) to pay the rent of the lot;
 (c) to insure the building to its replacement
value against fire and to keep it so insured;
 (d) to effect such other insurance policies
of the buildings as may be required by law;

 (e) subject to any order made by a court of
competent jurisdiction, to apply insurance
moneys received by it in respect of damage
to the building in rebuilding and reinstating
the building, so far as it may be lawful to
do so and to pay the premiums on any
policy of insurance effected by it; and
 (f) to perform any other function as may be
necessary for the discharge of its duties.

Strata Titles Board - s 67A STA
 There shall be a Strata Titles Board which
shall consist of a President and such
number of Deputy Presidents and other
member

Strata titles

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