What You Should Know When Buying Into Strata Living
What Should Purchasers Be Aware Of At The Point Of Sale, If The Legislation Is Amended To Allow Different Rates To Be Used From The Developer-Managed Period?
In addition to the Schedule of Parcels, which has to be exhibited at the sales office, purchasers should be informed of the following:-
1. The rate for each component.
2. The composition of shared common property (SCP) and exclusive common property (ECP) for each component that owners need to contribute towards for maintenance charges.
3. Shared common areas and facilities that are open to the public in commercial components and if other component owners are required to pay for the maintenance of those in addition to their own ECP.
4. The formula to calculate rates. The general public may not understand how different rates are arrived at – which is the combination of the uniform rate for SCP and a specific rate for each component for the ECP.
During the panel discussion at a recent Real Estate and Housing Developers' Association event, it was informed that proposals have been submitted for sub-management corporations (Sub MCs) to be planned at the beginning of the development and automatically created when the management corporation is formed.
If different rates are to be used from the developer-managed period, then the current legislation needs to be amended to extend to the formation of subsidiary management corporations, which are allowed only after the management corporation (MC) is formed, to when vacant possession is delivered.
I do not oppose the usage of different rates but it is not ideal to use them without SMCs.
Many owners are not aware that once the rates are passed at the annual general meeting, the only recourse is to seek action in court or the Strata Management Tribunal.
Using different rates with and without SMCs are two very different systems. Buyers ought to be aware of the risks at the infancy stage of this entire saga of using different rates.