CASE UPDATE: Aikbee Timbers Sdn Bhd & Anor v. Yii Sing Chiu & Anor and Another Appeal [2024] 2 MLRA 196
The author has previously written on the outcome of the appeal cases at https://koojiahung.com.my/2023/12/02/court-of-appeal-management-corporation-can-impose-different-rates-of-charges/. Based on the grounds of judgment, the Court of Appeal has also confirmed that Developer has statutory power to impose different rates of charges between residential parcels and commercial parcels during Preliminary Management Period according to Section 52(2) of the SMA 2013 reading together with the SPA, relevant Schedules of the HDR 1989 and HDA 1966, emphasizing on the principle of just and reasonableness.
“[54] In a mixed development, like the one before us, the exclusive common facilities are exclusively for the benefit and enjoyment of the residential parcels’ owners. The expenditure for the maintenance and management of these exclusive common facilities which are exclusively for the benefit of the residential parcel’s owners should not be included in the formula for the chargeable rate for the commercial parcels owners who have no right to enjoy such exclusive common facilities. The rigid imposition of only one chargeable rate for maintenance charges for residential parcels and commercial parcels would not reflect the true construction of a social legislation.“
WHAT’S NEXT:
The grounds of judgment cut across a few important aspects: –
- Social legislation in the context of a strata regime is not confined to the simplistic view of protecting only the individual purchaser, who is commonly perceived as the weaker party.
- Different rates of charges can be determined and implemented from the date of vacant possession onward, subject to the fulfillment of certain conditions.
- This could serve as a common theme running through different periods in the strata regime for the imposition of different rates of charges.
- A developer who wishes to impose different rates of charges in a mixed development must establish a strong legal footing, this includes drafting a comprehensive DMC and preparing an accurate budget.
- Purchasers in a mixed development can be bound by the terms and conditions of the SPA and DMC which cater for the imposition of different rates of charges between different components from the date of vacant possession.