A new committee. Is COB recognition required?
Does an MC Need a COB Recognition Letter to Operate Its Management Bank Account?
A management corporation (MC) elects its committee at a general meeting. However, the bank will not accept the new signatories without a COB recognition letter. Can an administrative requirement prevent the elected committee from accessing the development’s funds?
In Perbadanan Pengurusan Diamond F & Ors v Pesuruhanjaya Bangunan Kuala Lumpur & Anor [2025] MLRHU 1564, the Kuala Lumpur High Court examined the Commissioner of Buildings’ powers and a bank’s refusal to act on the MC’s documents.
What happened?
Disputes arose over the membership of the management committee at Diamond F. The dispute involved proceedings before the Strata Management Tribunal and the court, as well as the COB’s recognition of committee members.
When the MC sought to change its bank signatories following a subsequent AGM, the absence of a new recognition letter became an obstacle. The bank relied on the COB’s position instead of accepting the documents and Tribunal award relied upon by the elected committee.
The MC and two committee members therefore sought declarations concerning the COB’s powers and consequential orders against the bank.
What did the court decide about the COB recognition letter?
On 7 April 2025, the High Court held that the COB’s powers were limited by the Strata Management Act 2013. A management committee did not need a COB recognition letter to be recognised as the committee elected at a general meeting.
For verification of the elected members, the court identified the certified resolutions and minutes required under paragraph 7(8) of the Second Schedule. A relevant Tribunal award or court order could also establish the position. The COB could not add documents to that statutory requirement for this purpose.
The court also declared invalid the requirement for statutory declarations imposed on the Diamond F committee. It similarly invalidated the specified provisions of the COB’s circular requiring statutory declarations and additional committee-member information.
The practical distinction is important: the committee’s authority comes from a valid election under the statutory framework. A recognition letter does not replace that process or give the COB a separate power to decide a contested election.
Can a bank insist on a COB recognition letter?
On the facts before it, the court found that the bank should have acted on the relevant documents and Tribunal award. There was no stay of the award that justified treating it as ineffective merely because further proceedings existed.
The bank was ordered to release the MC’s account and accept the relevant signatories. It was also ordered to pay interest at 4% per annum on the account balance from 8 February 2022 until the account was released. The court did not award damages against the COB.
This does not mean that banks must ignore identity checks, suspected forgery or a genuine dispute about the authenticity of documents. The judgment distinguished those concerns from insisting on a recognition letter without a proper legal basis.
What should MCs and property managers take note of?
An orderly handover starts with the election and its records. Keep the meeting notice, attendance and voting records, certified minutes, resolutions and signatory documents together. Comply with the statutory filing requirements instead of assuming that the absence of a recognition letter removes those obligations.
Paragraph 7(8) also requires the audited accounts and auditor’s report presented at the general meeting to be filed. These accompany the resolutions and minutes, and the deadline is 28 days. The ruling about verifying elected members does not remove that wider filing duty.
Where an election is challenged, identify the actual Tribunal award or court order and whether it has been stayed. A pending challenge and an order suspending its effect are different matters.
If the bank refuses access to the account, obtain the precise reason in writing. A missing recognition letter is different from an allegation of forged minutes. A court order preventing the proposed signatories from acting would also require a different response.
The decision highlights the need to distinguish valid election documents from administrative practices. Neither an outgoing committee’s disagreement nor the absence of a COB recognition letter should replace a proper examination of the elected committee’s legal authority.
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