All Singapore laws are written in English

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All Singapore laws are written in English

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

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for example

• I failed to contact Jenny

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What did I mean?

• 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
• I simply forgot to contact Jenny?

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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.

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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..

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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).

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Ruling? Not Allowed.

• A Management Council (MC) is different from a
  companys 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.

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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.

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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.

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Drafting the law....

• Laws are drafted by legal draftsmen at the
  Attorney Generals Chambers (AGC) who did not
  participate in the industrys 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.

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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

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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

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How about FAQs and Guide Books?

• Yes, there are FAQs in BCAs website
• And they have published a laymens guide called
  Strata Living in Singapore
• BUT
• Sorry, I cant understand the explanation in
  the FAQ or guide book. Can you please
  clarify......

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So whats 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

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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

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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?

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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

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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?

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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.

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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)

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Analysis and Application

• Effects of the BMSMA on-
• the Management Council
• the Management Corporation
• the Subsidiary Proprietors
• the Managing Agent
• the Housing Developer

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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?

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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

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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?

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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.....

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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).

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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 .

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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)

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Share value cannot be changed

• but contribution rates can be changed
  Manhattan Houses 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.

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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)

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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.

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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)

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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 well wait and
  see .......

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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)

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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.

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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)

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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

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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.

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All about resolutions....

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

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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

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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

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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!

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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 ....

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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....

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Key issues for developers...

• reduction of initial period to one year
• 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?

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Concession for developer...

• 3 months grace period to commence collection of
  maintenance fund contributions
• rationale and case studies

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Issues affecting MAs

• MAs 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

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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.

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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

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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)

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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.

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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.

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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

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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

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Camouflaging the multi-tier...

• the mixed-development problem
• the walk-up apartments vs high-rise block
  problems in residential estates
• applying the wrong concept

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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

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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

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• 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

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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

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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.

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Possible sites......
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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?

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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.

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Dont 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.

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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)

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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!

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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

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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.....

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Compendium to BCAs Lay-persons guide book
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THANK YOU

• for your patience.