All Singapore laws are written in English

But the English language is the most ambiguous language resulting in confusion and mis-interpretations

for example:

“I failed to contact Jenny”

What did I mean?

1. I did all I could to contact Jenny, e.g. telephoned her, SMSed her, emailed her, sent her letters and postcards, but could not contact her?

OR:

2. I simply forgot to contact Jenny?

And laws are even worse..... Why?

Because those who drafted the laws are not the same people as the proponents or users of the laws.

Law draftsmen cannot read what were in the minds of the proponents or users and in order to camouflage possible errors, used superfluous language with multiple meanings.

The training of lawyers....

the law degree (LL B) at NUS allows the undergraduate to major in Constitutional Law, Criminal Law, Family Law, Construction Law, Company Law, etc., but NOT Strata Laws.

Thus, a lawyer who specialises in Company Law would use the Companies Act as the template for interpreting the Strata Law ..... as in the case of..

STB No. 31 of 1994

Issue: Council passed resolutions by “circular

motion” without convening a council meeting.

Rational: Under the Companies Act, the Board of

Directors can pass resolutions by passing around for other directors to sign (circular motion).

Ruling? Not Allowed.

A Management Council (MC) is different from a company’s Board of Directors (BOD) in that the directors need not own shares of the company, but Council members must be home owners or SPs.

Shareholders are not allowed to attend meetings of the BOD, BUT

SPs are allowed to attend meetings of the MC.

New Provision (2nd Schedule)

Many councils have difficulty getting the quorum and passing resolutions. Hence, the law has been amended to provide for the passing of resolutions in writing (similar to the circular motion mentioned earlier), so long as the necessary requirements under the Second Schedule, Section 7, are complied with.

How are laws made or amended?

Problems in society surfaced as in the Bukit Timah Plaza water contamination case and others.

Stakeholders (affected parties) petitioned the government.

Working committee is formed.Views, suggestions and proposals are made.

Draft provisions are formulated and various parties negotiate their differences.

Drafting the law....

Laws are drafted by legal draftsmen at the Attorney General’s Chambers (AGC) who did not participate in the industry’s deliberations and did not know what were the exact intention of each issue.

Thus, in many cases, the legal draftsmen “second guess” the intention or simply used general terms which could be ambiguous.

So who should interpret the law?

For Strata Laws, the most suitable authority is the BCA because they are involved in all the negotiations and deliberations, and even the preliminary drafting work.

Unfortunately, they cannot entertain the individual council member or even the management corporations

WHY?

Because there are more than 3,000 MCs in Singapore and more are being formed.

BCA would need an army to entertain the thousands of council members, managing agents, housing developers and the inquisitive SPs.

So their standard reply is “consult your lawyer”

How about FAQs and Guide Books?

Yes, there are FAQs in BCA’s website And they have published a laymen’s guide

called “Strata Living in Singapore”

BUT

“Sorry, I can’t understand the explanation in the FAQ or guide book. Can you please clarify......”

So what’s the solution?

Join AMCIS --- WHY? Firstly, there is one and only one AMCIS.

So BCA need not deal with the huge population of council members, etc.

Secondly, AMCIS has a panel of legal advisers to clear the more common problems and reduce duplication

and MOST IMPORTANT....

AMCIS contributed almost all the new provisions and amendments and has details of the numerous events that lead to each amendment or new provision,

for example, take the new definition of council members

Section 53 of the BMSMA

specifies that all council members shall be natural persons

but this definition does not exist in the LTSA

Why and who is a natural person?

Definition of a natural person...

You and I are natural persons – homo sapiens – whether male or female, heterosexual or homosexual.

Animals are not; aliens from outer space are not, and companies are not natural persons.

While a company is a legal entity in that it can sue and be sued, it is not a natural person

How to apply the new definition?

So what is the difference with and without this new inclusion of a natural person?

Under what circumstances do we invoke or apply this new definition and what results do we expect?

BCA or AMCIS --

Now you can see why other than BCA, AMCIS is the only authority on the BMSMA and the LTSA

Especially so when we are non-profit and we are formed BY management cor-porations FOR management corporations.

BMSMA & LTSA for MCs

the Strata Laws are for Management Corporations to manage their estates

not for the housing developers which is the Building Control Act (except the initial period)

not for the managing agents (except the hiring and firing)

Analysis and Application

Effects of the BMSMA on:-

the Management Council the Management Corporation the Subsidiary Proprietors the Managing Agent the Housing Developer

Another definition.....

the new BMSMA defines -- "immediate family member" , in

relation to any person, means a spouse, child, adopted child, step-child, sibling or parent of that person;

this definition was not given in the LTSA. Why?

Proportional representation....

the original LTSA allowed an investor owning more units to have more seats in the council

this privilege was removed because of complaints that big investors such as housing developers could effectively control the council with more council members

Why the change??

the BMSMA now allows more than one seat (S. 53 (12)(b) – the 49% rule)

How will this affect the council? Are we not going backwards?

What precautions should MCs take?

Back to Exclusive Use.....

the most common problem is on special car park lots....

others are generally those corner units where the staircases lead to only one unit.....

New provision to allow short-term exclusive parking... As the result of the above and other similar

instances where it becomes necessary for short-term exclusive use to be granted, the new BMSMA allows the MC to pass an ordinary resolution under a By Law for that purpose if the term is not more than 1 year (S. 33(1)(a)

And for more than 1 but less than 3 years, a special resolution is needed (S33 (1)(b), while for longer terms, a 90% resolution is required (S.33 (1)(c).

New share value scale Existing share values for residential

properties are in 100 m2 intervals which makes it unfair for properties just 1 or 2 sq. m. larger and having to pay the full share for the next 98 or 99 m2 of space.

New scale is in 50m2 intervals and reduces the inequality .

Example:

Old formula: up to 100m2 .... 3 shares and 4 shares between 101 m2 and 200 m2, an increase of 33% if your area is merely a few sq. m. more

New formula: up to 100m2 , the share value is 6, and for 101 to 150 m2 , the share value is 7, or an increase of 16.6%, half the previous case. Only when your area exceeds 150 m2 will you need to pay the full 33% increase to 8 shares (2/6 = 1/3)

Share value cannot be changed

but contribution rates can be changed – Manhattan House’s case.

For example – in an estate with two blocks, one high rise of 20 storeys with lifts and roof top water tanks, and one walk-up apartment of 3 storeys without the lifts and water tanks.

Varying contribution rates...

Assuming all units are of the same size and are allotted the same share value of 6 shares, the contribution rate for the walk-up apartments could be, say, $60 per share value, while the rate for the high rise block could be, say, $80 per share value, to take into account the additional costs of maintaining the lifts and water tanks [resolution by consensus, S. 41 (8)]

Alternative solution....

An alternative way to overcome the disparity is for this estate to adopt the multi-tier MC scheme in which each block forms its own MC and a master MC is formed to take care of the shared common properties such as the swimming pool, car parks, garden, etc.

But a multi-tier MC has its difficulties as would be discussed later.

Rebates on maintenance fund

GIRO, prompt or early payment rebates now made possible after 12 years of debate!

Only a special resolution is needed under Section 41 (9)

Term of office for council members

No change, except for the Hon Treasurer similar to the Societies Act, but small estates with less than 10 units can seek exemption from this rule; others can play “musical chairs”

Chairman, secretary and treasurer can now resign and land the estate in anarchy – we’ll wait and see .......

Disqualification of council members

SPs disqualified from voting can no longer be voted to office (case: Peoples’ Park)

SPs convicted of fraud or dishonesty [Section 54 (j)]

Council members elected, but are in arrears of contributions for more than a quarter (3 months) can be removed [S. 54 (2)(a)]

FREEZE the Council – S54 (4)..

4) The members for the time being of the council shall, notwithstanding anything in the Second Schedule, constitute a quorum at a meeting of the council for the purpose only of

(a) appointing a person under subsection (3) to fill a vacancy in the office of the chairperson, secretary, treasurer or other member of a council; or

(b) convening a general meeting of the management corporation for that purpose.

Disclosure of interests...... in addition to disclosure, council members -- (b) not take part in the consideration or

discussion of, or vote on any question with respect to, that contract or proposed contract or other matter; and

(c) if the chairman or the person presiding at that meeting so directs, withdraw from the meeting during the consideration or discussion unless asked by the council to be present to provide information. (Sect. 60)

Penalties for dishonesty....

(a) be liable to the management corporation for any profit made by him or for any damage suffered by the management corporation as a result of the breach of any such provision; and

(b) be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months or to both – Section 61

Power to convene EOGM...

Council is now empowered to convene extra-ordinary general meetings [Section 27 (2)] with the half-hour rule applicable as in an ordinary general meeting.

All about resolutions....

Need to introduce three new types of resolutions – by consensus, comprehensive and 90%.

Counting of votes....

Case of counting the positive votes for a special resolution (covered walk way) instead of the objections under old LTSA

Example: Total 1000 shares, 400 shares attended the meeting (including proxies)

280 shares or 70% voted in favour; 80 shares or 20% objected; rest either abstained or spoilt votes

Si liau.....

MA declared special resolution defeated because less than 75% voted in favour. He assumed that if more than 25% objected (as per LTSA), then more than 75% must support the motion.

Group of SPs took MC to court for a judiciary declaration to reverse the decision because only 25% objected, not more. LTSA did not say you count the “yes” votes

New way of counting.....

the BMSMA removes this problem by counting the “yes” votes like all the other resolutions – at least 75% in favour.

Warning….. This may lead to more trouble!

Greater transparency?

Minutes of council meetings must now be posted on the notice board within seven (7) days of the meeting and remain on the notice board for 14 days (Second Schedule, S.3)

Problem: minutes are normally prepared by managing agents......how to comply ....

Hire an APMA

APMA stands for Accredited Professional Managing Agent and are required to comply with the industry standards of performance for managing agents approved by AMCIS as per PMR 2.

Penalties are prescribed for failure and disciplinary action, including removal from the accreditation status can be imposed....

Key issues for developers...

1. reduction of initial period to one year

2. reduction of quorum for AGM to 30%

to facilitate the take-over by owners (case: B8 and others)

Why owners need to take over from developers ASAP?

Concession for developer...

3 months’ grace period to commence collection of maintenance fund contributions

rationale and case studies

Issues affecting MAs

MA’s contract can now be three years instead of one, but must be reviewed annually. Any difference?

MC can authorise council to appoint, terminate and replace managing agent without a general meeting ...S.66 of BMSMA vs: S.68 of the LTSA

Application of Section 68...

a management corporation may, by a resolution passed at a general meeting, appoint a managing agent

Contrast (1) with (1A):- (1A) Any managing agent appointed under

subsection (1) shall hold office until the conclusion of the next annual general meeting.

adverbs “may” and “shall”...

(3) Any managing agent appointed by a management corporation may at any time be removed from office

(10) The fees and expenses of a managing agent shall be fixed by the management corporation in a general meeting or, if so authorised by the subsidiary proprietors at the last preceding general meeting, by the council of the management corporation

$1.0b. Poser:

If the LTSA specifies that when the MA is appointed.... he SHALL hold office until the next AGM, and yet MAs routinely are allowed to “resign” from their office without a general meeting, but MCs need to convene a general meeting in order to remove the MA or appoint a replacement, where is the equality or justice?

Applications of S. 68 (PW and others)

Preserve your exit......... To appoint M/s XYZ as managing agent for the

21st financial year and authorise the Management Council to determine its remuneration. In the event, M/s XYZ, is unable to act as managing agent for the Corporation or on terms not acceptable to the Management Council, the Management Council is hereby authorised to appoint any other AMCIS accredited managing agent for the 21st financial year, and to determine its terms of appointment and remuneration accordingly.

New BMSMA allows....

To authorise the incoming management council to appoint a managing agent and determine its terms of appointment and remuneration, and to empower the council to replace him and re-appoint a new managing agent as necessary without convening a general meeting for this purpose.

Section 68 – collecting proxies

Cases: Mixed developments in Peoples’ Park, Chinatown, Alexandra, Orchard Road, etc., ECs in east coast, Condos in Bishan, Thomson, Jurong, etc.

Section 68 – prohibited activity of managing agent is an expansion of Rule 7.6, Fourth Schedule, Professional Code of Conduct for APMAs

Multi-tier MC or Multi-tier Headache?

Introducing the multiplex condominiums (MPCs)....

objective design co-ownership of the facilities complex clear cut boundaries size of MPCs – Country Club Condos

Camouflaging the multi-tier...

the mixed-development problem

the walk-up apartments vs high-rise block problems in residential estates

applying the wrong concept

Discounts instead of Multi-tier

Case of Manhattan House – STB allowed discounts to residential units without central airconditioning

Hence, walk-up apartments without lifts and roof-top water tanks may also be given similar rebates

Even ground floor units of the high-rise block can also be given rebates for not using lifts

Veto of lift upgrading, etc. is poor management....

Lack of planning and budgets result in need to raise funds for upgrading works offering opportunity for disgruntled SPs to veto

Special resolution is academic at time of upgrading (including repainting, re-roofing, etc.) if provisions have been made annually

Approval of annual budgets providing sinking fund levies for lift upgrading, repainting, re-roofing, etc., is, granting approval for the eventual project.

Thus, as long as funds are built up at the point of executing the project, approval by way of special resolutions are unnecessary since the project had been approved annually with the building up of the funds

Multi-tier MC wrong solution...

Accordingly, the rebates would be a more effective way of solving the above problems rather than creating a multi-tier MC with its multi-tier politicking and consequential problems.

Before your can even solve a problem, you may have created multiple problems

Multiplex Condos are neat....

with clear cut boundaries, distinctly different parcels that can even be divested if necessary.

There are already existing groups of condos that lend themselves to forming a multiplex condo to implement the multi-tier MCs.

Possible sites......

Subsidiary Proprietors beware..

ISSUE NO. 1

Interfloor seepage. Commissioner has just announced that the onus is for the upper floor unit to prove that his unit is not at fault

What lead to this new ruling?

IMPORTANT: ISSUE NO. 2...

Falling Windows can land you in JAIL!

Section 9 of the BMSMA requires you to prove that you have maintained your fixed structures, particularly windows, otherwise you can be fined up to $10,000, and/or jail up to 12 months, regardless of the type of window – casement, sliding, top hung, louvres, etc.

Don’t be confused by casements

Order made in 2004 involves replacement of aluminum rivets and stays for casement windows

New law (S.9) covers MAINTENANCE of ALL types of windows and other structures such as awnings.

AMCIS to your rescue..........

For a small fee, the AMCIS GLOBAL WINDOW INSPECTION service provides:

Inspection of your windows by BCA certified window installers to certify that you have maintained your windows.

Free insurance to cover you from civil claims for damages and injuries (up to $500,000 per claim)

PLUS ..............

Free legal service to represent you in court in the unlikely event of a prosecution

ACT NOW, before you or your SP is jailed!

Costs?

Very nominal as AMCIS is non-profit: Estates with less than 100 units -- $27 per

unit (members) or $30 (non-members) 100 to 299 units -- $24 per unit (members)

or $27 (non-members) 300 units or more -- $22 per unit (members)

or $25 (non-members) Act NOW for a peace of mind

Upgrading standards.....

of real estate management.

PMR 2 is being reviewed and upgraded to PMR 3 to prepare for the next amendment of the LTSA and BMSMA

Standards to be raised, new criteria to be developed....PMS, equivalent of FRS.....

Compendium

to

BCA’s Lay-person’s guide book

THANK YOU

for your patience.