| Mr
Speaker, Sir, I beg to move, "That the Bill be
read a third time."
Select
Committee
2
At its Second Reading in April this year, the House
committed the Building Maintenance and Management Bill
to a Select Committee. This was in view of its likely
impact on a broad cross-section of the population.
3
The Select Committee has received 61 written representations
on the Bill from various stakeholders. This comprised
management corporations (MC), subsidiary proprietors
(SP), managing agents (MA), developers and lawyers.
The Committee has heard oral evidence from 15 individuals
or groups, whose views are representative of the stakeholders.
It has taken into account these representations as well
as Members’ views expressed during the Second
Reading. The full details are in the Report of the Select
Committee, which has been presented to Parliament on
7 Oct and available to the public since 8 Oct 04.
4
Sir, the Committee has been guided by some key considerations.
First, recognizing the different interests of stakeholders,
the Committee has sought to strike a balance between
the interests of majority and minority SPs, and owner
developers and SPs. Second, the Committee has been conscious
that SPs need to take greater ownership in managing
their developments, in line with the intent to promote
self-regulation. Finally, the Committee has sought to
strengthen the Bill to inculcate a maintenance culture
and to facilitate the staging of large development projects.
I shall now elaborate on the key recommendations.
New
short title of Bill
5
The Committee has agreed to change the Bill’s
short title to “Building Maintenance and Strata
Management” to reflect its substantial content
on strata developments.
Balancing
the different interests of user groups - in mixed-use
strata developments
6
The original Bill proposed a two-tier MC system for
mixed-use developments, with a main MC and a second
tier of subsidiary MCs (sub-MCs) to represent different
users, eg. residential and commercial. The main MC manages
the property common for general use of all SPs. The
sub-MCs manage the common property used exclusively
by their respective user groups (ie. “limited
common property”) and can levy contributions from
them for maintenance or improvement.
7
Sir, the two-tier MC system has been tried and tested
in other countries, such as Canada and Australia (New
South Wales and Victoria). User groups have flexibility
to make their own decisions without being frustrated
by other groups who may not share their interest. Hence,
for example, high-rise residential unit owners can now
upgrade their lifts without being hampered by objections
from owners of low-rise units without lifts. Likewise,
retail shop owners in a mixed development can plan to
upgrade the concourse of a shopping area without having
to face resistance from residential unit owners.
8
The representations to the Committee generally supported
the two-tier MC system. In fact, several representors
have asked that the three categories of developments
allowed to form sub-MCs, namely:-
(a)
residential and non-residential lots (e.g. residential
apartments and retail shops);
(b)
non-residential lots used for different purposes (e.g.
hotels, offices and retail shops);
(c)
different types of residential lots (e.g. high-rise
apartments and low-rise town houses).
be
expanded to include one more category, i.e. non-residential
lots in distinct office blocks. The Committee has agreed
to this. To ensure that the addition of the fourth category
will not result in the proliferation of sub-MCs, qualifying
criteria will be prescribed by regulations. Such criteria
can include the minimum size or gross floor area of
eligible developments.
9
To facilitate dispute resolution under the 2-tier MC
system, the Strata Titles Boards (STB) will be allowed
to adjudicate boundary disputes on limited common property
between MC and sub-MC, or among sub-MCs. This would
be more efficient and less costly than going to the
courts.
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Balancing
the interests of majority and minority SPs – representation
in the council
10
In the original Bill, each SP can only have one seat
in the council, even if he owns more than one lot. Some
representors consider this to be unfair to those SPs
with substantial interests in a development. This is
because the minority SPs can then dictate the overall
management of the development.
11
Sir, it is reasonable to expect majority SPs to want
to have a greater say in the management of their assets.
Hence, the Committee has agreed to allow owners of multiple
lots to have proportional representation in the council
according to share value. This is subject to a cap of
49% of the council seats for any one SP. For example,
a SP can have up to 6 seats in a 14-member council,
or 1 seat short of half the total seats. This is to
prevent absolute control by any SP in the council and
provide some safeguard to the minority SPs.
Balancing
the interests of owner developers and SPs - contributions
to maintenance fund
12
Sir, the current industry practice is that the developer
sets up the maintenance fund for a development after
the issue of its Temporary Occupation Permit (TOP).
As soon as the developer starts collecting maintenance
contributions, the developer must also contribute to
the fund, for the unsold units as well as for the sold
units not handed over to the purchasers.
13
It is fair that the developer, who has not handed over
the unit to the purchasers, should contribute to the
maintenance fund. However, in several representors’
view, requiring developers to contribute to the fund
for sold units not yet handed over could pressure them
to rush through the handing over and compromise quality
and customer service. The feedback is that developers
usually need up to 3 months after TOP to hand over the
sold units in large developments. Hence, the Committee
has agreed to allow developers a grace period of 3 months
from TOP before starting contributions for unsold units
and sold units not handed over.
Establishing
a maintenance culture
14
Sir, Members have expressed concern over the weak building
maintenance culture in Singapore. I share their concern.
External
windows
15
I have emphasized the danger posed by falling windows
on several occasions in Parliament this year. The Building
Control Act has been amended to provide for the Minister
to prescribe minimum standards for the design and installation
of windows. Existing casement windows in residential
buildings are required to be retrofitted with stainless
steel rivets. This addresses the upstream safety aspects
of design and installation.
16
Sir, we also need to address the downstream aspect of
maintenance to be fully effective in addressing the
problem. External windows have been defined as common
property in strata developments. This is so that the
MCs can have control over window designs, in order to
preserve the uniform appearance of building façades
for aesthetic reasons. However, with the high incidence
of falling windows in the last 4 years (from 19 cases
in 2000 to 106 cases in 2003), the rationale for defining
all external windows as common property and the onus
on MCs to maintain them are no longer relevant. A re-definition
is needed so that the most appropriate party is made
responsible for window maintenance.
17
External windows can be classified into 2 distinct groups:-
(a)
those that can be opened, e.g. casement, sliding and
top-hung windows, and louvres; and
(b)
those that are fixed, eg. curtain walls or fixed glass
panels.
18
The Committee recommends that windows that are openable
be excluded from the definition of common property.
As the SPs are the ones who have access and control
over such windows, they will be made responsible for
their maintenance. However, fixed windows remain as
common property and MCs will continue to maintain them.
In addition, the MCs will still retain the ability to
regulate window designs for uniformity of the building
façade.
19
For consistency, a consequential amendment will also
be made to the Town Council Act to exclude openable
windows from common property. These windows will come
under the flat owners’ maintenance.
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Maintaining
exterior features
20
To inculcate a strong maintenance culture, we need continuing
public education. We also need to strengthen our legislation.
The Committee has agreed to empower the Commissioner
of Buildings (COB) to prosecute the “person responsible”
for failure to maintain the exterior features of their
buildings, and thus endangering the lives or properties
of others. These exterior features include windows,
aircon units, wall tiles and any other elements permanently
fixed to the external façade of buildings. The
penalty is a maximum fine of $10,000 or 12 months imprisonment
or both.
21
The “person responsible” is the person or
entity, who has charge of the maintenance or daily control
of the external features. This means:-
(a)
Town Councils, for common property in HDB flats;
(b)
MCs, for common property in strata developments; and
(c)
Owners, for common property of any other buildings or
premises.
For
openable windows, which are no longer common property,
the SPs in strata developments and flat owners of HDB
flats will be the “person responsible”.
Encouraging
greater ownership amongst SPs
Resignation
of office bearers
22
Under an existing provision, office bearers in the council
(i.e. the chairman, secretary and treasurer) are not
permitted to resign unless replacements are found. Several
representors feel that this is unfair to volunteers,
who have to continue in office for many years due to
general apathy of fellow SPs. Therefore, many are discouraged
from coming forward to hold office.
23
The Committee considers this to be a valid point and
recommends that office bearers be allowed to resign,
regardless of whether replacements can be found. However,
the office bearer must first notify the MC of his intention
to resign and must convene a general meeting to try
to find a replacement. Without replacements, the whole
council may be vacated. If this happens, the entire
body of SPs will then have to bear responsibility for
the management of the strata development. Individual
SPs will be made jointly and severally liable for the
payment of all the MC’s debts. If the SPs do not
maintain their estate properly, the COB will issue a
notice to compel them to take corrective actions. A
new provision also allows any SP to apply to the STB
to compel an election and the appointment of new office
bearers.
24
Sir, this is a reasonable approach as SPs must take
ownership of how they want their estate to be managed,
including stepping forward to hold office in the council.
Removal
of council member on being appointed MA
25
Many representors are concerned over the discretionary
power of the management council to remove a council
member, if he is also appointed as an MA.
26
Sir, the MA’s appointment is an important decision
that has an impact on all SPs. The Committee has therefore
agreed that the termination and re-appointment of MAs
be done at a general meeting so that every SP will be
aware of the decision. At the meeting, the council member
who wishes to be appointed MA will have to declare any
conflict of interest.
Facilitating
staged developments - variable initial share values
27
The Committee has considered a proposal for developers
to be given the flexibility to vary the share value
allotted to units in phased or staged developments.
Share values allotted in the first stage of such developments
usually need adjustments due to changes in the following
stages. At present, developers have to get the consent
of all purchasers or SPs in order to change the share
value. This is difficult to achieve in practice.
28 This restrictive condition may stifle opportunities
for creative developments on White Sites and the upcoming
Business and Financial Centre (BFC) at the New Downtown
in Marina South. Hence, the Committee has agreed to
the proposal to enable developers to better plan and
implement mega developments to meet our future demands.
29
A new provision will allow share value for a unit to
be stated within a range of values, to be adjusted according
to changes in the later stages of development. Developers
are required to let would-be purchasers know these conditions
upfront so that they can make an informed decision.
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Other
Recommendations
Provision
that made failure to pay contributions an offence
30
A provision, making failure to pay maintenance contributions
a criminal offence, was removed in the original Bill.
This provision is now reinstated following a representation
that the threat of criminal sanction is an effective
deterrent against SPs defaulting in contributions. MCs
are also relying on it to recover outstanding debts
owed by SPs.
Statutory
presumption of liability for inter-floor leakages
31
The Committee has heard that in disputes over inter-floor
leakages, the fault is usually with the upper floor
unit. This is so in the majority of such disputes heard
by the STB. Despite this, the upper floor unit owners
tend to be uncooperative, and drag on the dispute resolution
process unnecessarily. Therefore, the Committee is agreeable
to the proposal that the Bill attributes a rebuttable
presumption of liability to the upper floor unit owner
for such cases that are handled by the STB.
32
Sir, this presumption of liability will make upper floor
unit owners more responsive to lower unit owners who
have to bear with the inconvenience and distress as
long as the leakages remain unresolved. This will facilitate
and expedite the resolution of such disputes.
Layperson’s
Guide
33
Sir, as this Bill is highly technical in nature, the
layperson may find it difficult to fully understand
its content and implications. Hence, BCA will publish
a layperson’s guide to highlight the changes in
the new legislation and the implications to various
stakeholders. The guide will provide interpretation
of the various aspects of the new Act, as applied to
situations commonly encountered by stakeholders.
Conclusion
34
Sir, this Bill is the result of extensive consultations
with the public at large and with various industry stakeholders,
over a period of 20 months (from Pre-POWER and POWER
sessions in Feb and Apr 03 till completion of the Select
Committee process in Sep 04). It addresses the corporate
governance of the MCs, as well as the problems arising
from differences among the various user groups and stakeholders.
The Select Committee is recommending amendments to the
Bill, which will no doubt further improve the framework
for strata management and maintenance in Singapore.
35
However, I wish to stress that this will not solve all
the problems facing strata developments today. Strata
developments are founded on the concept of community
living. Individuals own their strata units but share
the ownership of common property. Community living requires
a certain degree of give-and-take from each resident.
He must be aware of his responsibilities and liabilities.
Ultimately, the SPs and other stakeholders will have
to take on greater ownership of their estates and work
together to resolve issues for the common good of the
community.
36
Sir, I beg to move.
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