Speech by Mr. Louis Ng Kok Kwang, MP for Nee Soon GRC at the Second Reading of the Building Maintenance and Strata Management (Amendment) Bill [Bill No. 29/2017]
Sir, I stand in support of this Bill. Better governance and transparency is welcomed in light of the numerous cases brought to the Strata Titles Board and media on disputes involving Subsidiary Proprietors and MCSTs.
The Bill enhances the self-regulating nature of the Building Maintenance and Strata Management Act, enabling our citizens to better manage their estates, which can only be a step in the right direction.
There are two clarifications I seek.
Clarification on approval of maintenance charges before sales launch
Firstly, Clause 15 amends Section 18 of the Act. It now requires the Developer to obtain approval from the Commissioner on the quantum of maintenance charges before the sale of any unit. This is a departure from the current provisions of Section 18 read with Section 16, where in practice sees Developers obtaining approval from the Commissioner just before TOP issuance.
This amendment will provide some comfort to buyers who can better assess their affordability since the property maintenance cost will be more accurately reflected at time of sale. However, a balance has to be sought.
In practice, the amendment means Developers will have to project the maintenance charges payable years before property projects are completed. Can the Minister clarify, what happens if the maintenance charges have to be increased due to inflation or other costs? In the long run, this will not benefit Subsidiary Proprietors if the maintenance charges are insufficient to cover the costs of the MCST running the property, or if on the other hand, is in fact excessive.
Perhaps the Minister can consider incorporating flexible provisions, which allow the rate of maintenance charges, approved by the Commissioner to be adjusted within a certain range based on market rate at the time of TOP? This means the charges can be either be increased or reduced. This range can be provided to buyers in the Sale and Purchase Agreements.
Clarification on Commissioner’s powers to appoint an official manager
Secondly, Clause 53 introduces new Sections 126A and 126B to the Act. This allows the Commissioner to appoint an Official Manager to manage the estate in instances where there is a refusal or inability of the MCST to carry out a duty when there is a health or safety concern.
This is triggered by a written request comprising at least 20% of the aggregate share value of total lots or not less than 25% of total number of Subsidiary Proprietors.
Can the Minister clarify how this percentage threshold is derived? Has this been considered in light of the notoriously poor attendance rate during AGMs as reported in the media, which currently requires a quorum of 30% of the aggregate share value of total lots pursuant to Para 3, First Schedule of the Act?
Presumably, if the 30% quorum can be formed, motions can be passed to resolve disputes and issues, without requiring the need to invoke Sections 126A and 126B.
Hence, can the Minister clarify how a slightly lower threshold of 20% of the aggregate share value of total lots accompanying a written request serve to provide Subsidiary Proprietors with an additional remedy in such dire circumstances?
If the rationale is to provide an interim remedy for MCSTs in deadlock facing situations involving health or safety concern, perhaps the threshold criteria ought to be tweaked such that the Commissioner is provided discretion and full powers to appoint an Official Manager as long as it is satisfied that there is a health and safety concern.
Can the Minister also provide further clarifications on the definition of “health and safety concern”?
Lastly, I want to commend MND for the extensive public consultation it has carried out with regard to these amendments. The public consultations and focus group panel dialogues since 2012 are very welcomed and this has engaged and empowered the community.
Sir, notwithstanding the above clarifications, I stand in support of this Bill.