Improving Strata Living in Singapore

Key Changes to the Building Management and Strata Maintenance Act

This article discusses some of the key changes to the Building Maintenance and Strata Management Act (Cap. 30C, 2008 Rev Ed) brought about by the Building Maintenance and Strata Management (Amendment) Act (No. 35 of 2017). The key changes include a revision of the definition of common property, insertion of new section 37A which permits the installation of safety equipment by a subsidiary proprietor on his strata lot, conferring power on MCSTs to rectify contraventions to section 37(3) of the BMSMA, codification of the existing practice of MCSTs utilising management funds towards legal fees, and allowing service of notices by electronic means.

The Building Maintenance and Strata Management (Amendment) Bill (Bill No 29 of 2017) (BMSMAB 2017) was first passed in Parliament on 1 August 2017. It is the first comprehensive amendment of the Building Maintenance and Strata Management Act (Cap 30C, 2008 Rev Ed) (BMSMA) since it came into effect on April 2005. The much-awaited BMSMAB 2017 is a result of a review carried out over five years, comprising three rounds of public consultation, focus group discussions and town hall dialogues.
 
Key amendments to the BMSMA include:

1. a revised definition of common property;
2. clarification of the duties and powers of a management corporation (MCST);
3. refinement of the processes for general meetings and proceedings of councils and executive committees; and
4. greater clarity, consistency and administration of the BMSMA.

The amendments are expected to come into force soon. This article discusses some of the key changes to the BMSMA.

Revised Definition of “Common Property”

The definition of “common property” in the BMSMA and its predecessor, the Land Titles Strata Act (Cap 158, 1999 Rev Ed) (LTSA 1999) has been subjected to two previous rounds of amendments with each amendment seeking to further clarify and fine-tune the definition.

Following feedback received by the Select Committee that the definition of “common property” should be simplified and should apply to both strata and non-strata developments, the definition took its current form in the BMSMA. This was a marked change from the previous definition of “common property” set out in the LTSA 1999, which expressly specified an illustrative list of structures and features forming part of common property.

However, the Building and Construction Authority (BCA) received feedback during this round of review that the current definition of “common property” in the BMSMA should revert to the definition under the LTSA 1999 as the generality of the current definition had resulted in disputes arising between subsidiary proprietors (SPs) and MCSTs as to whether foundations, columns and beams of a development fall within the ambit of the definition, and whose responsibility it is to maintain such structures.²

As a result, while retaining the generic definition of “common property”, the BMSMAB 2017 now specifies certain key structural elements and features that, the BCA opined, should be maintained by the MCST.

The amended definition is set out below:

The generic definition of “common property” in the present BMSMA has come under fire in the recent cases of Sit Kwong Lam v MCST Plan No 2645 [2017] SGHC 57 (Sit Kwong Lam) and Wu Chiu Lin v MCST Plan No 2874[2018] SGHC 43 (Wu Chiu Lin). The issue that arose was how the second limb of the definition of “common property” (Second Limb) ought to be interpreted.

In Sit Kwong Lam, Kannan Ramesh JC accepted that in some cases there could be areas in a development that are not comprised in any strata lot and yet are not used or capable of being used or enjoyed by any SP at all. The appellant argued that such an area or installation was not common property as it did not satisfy the Second Limb, but is “uncategorised” and to be regarded as “no-man’s land”. Ramesh JC rejected the appellant’s argument and resolved the conundrum by reading into the Second Limb, a requirement that an area or installation, forming part of the common property, must not be for the “exclusive use of any particular subsidiary proprietor”.

However in Wu Chiu Lin, Chan Seng Onn J opined in obiter that the Second Limb is meant to be construed broadly, such that even prospective and intangible forms of interaction by SPs with a particular area in a development will be sufficient for that area to satisfy the Second Limb. Chan J’s view was that there is no third category of property in a development that was neither common property nor part of a SP’s strata lot.

Most recently in Sit Kwong Lam v MCST Plan No 2645 (Sit Kwong Lam CA), the Court of Appeal endorsed Chan J’s reading of the Second Limb in Wu Chiu Lin, holding that the Second Limb is to be interpreted broadly and the words “use” and “enjoy” should be read according to their dictionary meanings. Even parts of the development (such as roof trellises and external walls) which cannot be “used”, can still be “enjoyed” by SPs without having physical access to it, as the word “enjoy” connotes a broader meaning to encompass even intangible forms of interaction such as appreciation.

While the amendments in the BMSMAB 2017 and Sit Kwong Lam CA provide greater clarity on what comprises common property, it remains to be seen whether further issues with this amended definition of “common property” will arise in future cases.

New Definitions – “Structural Defect” and “Structural Element”

The BMSMAB 2017 introduces new definitions for the terms “structural defect” and “structural element” under section 2(1) of the BMSMA.

While section 30(5) of the BMSMA makes reference to “structural defects” which the MCST is obliged to rectify, the terms “structural defects” and “structural elements” themselves are not expressly defined in the present BMSMA.

This gap was highlighted by the High Court in MCST Plan No 367 v Lee Siew Yuen and another (Lee Siew Yuen) when the Court was faced with the question of whether defective beams in a strata lot were structural defects which had to be rectified by the MCST. The High Court referred to the definition of “key structural elements” in the Building Control Act (Cap 29, 1999 Rev Ed) and the Oxford dictionary definition of “structure” in deciding that the beams were structural elements and the cracks in the beams were structural defects as they “affected the load bearing capacities of the beams”. The introduction of these new definitions codifies the decision in Lee Siew Yuen and adds clarity to the duty imposed on MCSTs to rectify structural defects.

New Section 37A – Permitting the Installation of Safety Equipment 

The new section 37A permits the installation of safety equipment by a SP on his strata lot without the prior approval of the MCST so long as the safety equipment is installed in a competent and proper manner and is in keeping with the appearance of the building.

The new section 37A also imposes a duty on SPs to ensure that all safety equipment installed is done in a competent and proper manner and is in keeping with the appearance of the building. SPs are further obliged to repair any damage caused to any part of the common property due to the installation of such safety equipment.

Presently, the installation of safety equipment is governed by paragraph 5 of the prescribed by-laws under the Building Maintenance (Strata Management) Regulations 2005 (Prescribed By-Law 5), which permits a SP to install on the SP’s lot any structure or device for the safety of the lot’s occupants.

In the Strata Titles Board’s (Board) decision in Sujit Singh Gill v MCST Plan No 3466 (Sujit Singh), the Board held that:

“the [Prescribed By-Law 5] … when read as a whole, serve[s] to authorise subsidiary proprietors to install and prevent the management corporation from refusing to allow subsidiary proprietors … to install safety structures … , even if such installation is mounted on common property and even if it alters the appearance and facade of the building.”

The new section 37A seems to be an intended departure by Parliament from the Board’s decision in Sujit Singh and clarifies that SPs are obligated to comply with any design guidelines for safety equipment imposed by the MCSTs.

Amended Section 30 and New Section 37(4A) of the BMSMA – Power of MSCT to Rectify a SP’s Contravention of Section 37(3) of the BMSMA

Where a SP has contravened section 37(3) of the BMSMA by effecting improvements in or upon the SP’s lot which affects the appearance of any building comprised in the strata development, the amendments to section 30 and the new section 37(4A) serve to cloak the MCSTs with the power to address such contraventions by notifying the SP to carry out rectification works, and where the SP fails or neglects to do so, the MCST may step in to carry out the works.

The transitional provisions of the BMSMAB 2017 provide that these amendments will apply retrospectively to improvements carried out before the implementation of the amendments.

The Power May be Exercised If the MCST is Satisfied that There is a Breach of Section 37(3) of the BMSMA

Section 30(2)(d) of the BMSMA provides that the MCST may rectify any works done by a SP which increase or are likely to increase the floor area of the development.

Following the BCA’s review of the BMSMA, it was proposed that the MCST’s power be extended to include the rectification of any works done by a SP which affect the appearance of any building within the development. This amendment was inserted to reiterate that SPs are responsible for remedying any improvements done to his lot that detract from the appearance of any building in the development.

Presently, MCSTs will have to file an application in the Courts or to the Board, seeking an order for the reinstatement of the lot in question where the works done by a SP affect the appearance of any building within the development. The relevant forum will then determine whether a mandatory injunction for reinstatement should be granted on the facts of the case.

However, the empowerment of MCSTs to take remedial measures against SPs on the basis that they are “satisfied” that section 37(3) of the BMSMA has been contravened, arguably sets the bar too low. In cases involving an alleged breach of section 37(3) of the BMSMA, the issue of whether the improvements detract from the appearance of, or are not in keeping with buildings in the development, is not always clear-cut and is a matter of heavy contention between the MCST and the SP.

The Power May be Exercised Even if the SP is Not Responsible for the Contravention 

A significant point is that under the new section 37(4A), even where a SP is not responsible for the improvements contravening section 37(3) of the BMSMA, a notice may be issued to invoke the new power under the amended section 30 against the SP rendering him liable for the cost of works carried out by the MCST.

Moving forward, prospective purchasers may be well-advised to seek confirmation from the MCST that there are no improvements that contravene section 37(3) of the BMSMA before proceeding with the purchase and/or to obtain an undertaking from the seller that he would be responsible for such costs.

Usage of Management Fund for Legal Services 

The amended section 38(3) of the BMSMA codifies the existing practice of MCSTs utilising management funds toward legal fees by conferring the power to utilise management funds for the engagement of legal services. The intention behind the amendment is to encourage MCSTs to engage lawyers to provide legal advice on points of law in the interpretation of the BMSMA instead of approaching BCA.

The amendments introduce new sections 38(3A) and 38(3B) that require an annual budget to be approved before an annual general meeting and a supplementary budget for unforeseen or urgent expenditure before an extraordinary general meeting for the engagement of legal services. It is implicit that a MCST cannot utilise the management fund for legal fees beyond the annual budget approved and would have to call for an extraordinary general meeting to do so.

However, it remains unclear how MCSTs are to estimate an annual amount of legal fees to be incurred, given that it may be difficult to account for unforeseen situations where urgent legal assistance is needed.

In advising MCSTs before commencing legal proceedings, law firms will be well placed to ensure that the necessary approvals are duly obtained by the MCST and provide an estimate on the legal fees to be incurred.

Service of Notices by Electronic Communication 

Currently, section 129 of the BMSMA provides that all notices (where required by the BMSMA) are to be served by prescribed physical means. In light of queries posed to BCA on whether notices of meeting may be issued via email, BCA proposed allowing electronic posting and service of documents (such as notices and minutes of meetings) to keep up with this tech savvy age.

The amendment to section 129(1) allows a notice to be served by a MCST on a SP by email. While a step in the right direction, the amendment is hindered by caveats. The new section 129(1B) provides that the notice must also be served on the SP by posting it to his address for service or to his last known place of residence or business. It also provides that the notice will be deemed duly served by email if “it becomes capable of being retrieved by the addressee at an electronic address designated by the addressee”. While safeguards are necessary, these caveats may negate the usefulness of the amendments as they seemingly deter MCSTs from moving towards serving notices by email as it is not possible to determine if the emails sent have become capable of being retrieved by the addressee.

In comparison, the Companies Act (Cap 50, 2006 Rev Ed) permits the electronic transmission of notices of meeting to members/officers of a company, provided that the number or address used “has been notified by that person in writing to the company as one at which that notice or document may be sent” and “the company has no reason to believe that the notice or document will not reach him”. The authors await future amendments which will follow in the footsteps of the Companies Act.

Conclusion 

The revision to the BMSMA is welcomed and many of the amendments are steps in the right direction.

However, in the authors’ view, there is much room for the BMSMA to be further refined. The amendments have not addressed some of the issues proposed in the first public consultation, such as the accreditation of strata managers, and the expansion of the jurisdiction of the Board. Hopefully, future amendments will address these issues as well as strive to narrow the gap between theory and practice.