Pre-formation of Management Corporation

When a development has more than 4 units and more than 2 purchasers, S16 (1) provides that the developer shall establish a maintenance fund when the TOP is issued by the Commissioner of Building Control under the Building Control Act Section 21.

Section 16 (2) provides that the maintenance fund is solely and exclusively used for:

• Payment for audit fee, cleaning, security and other amenities
• Repair and maintenance, and not for original installation
• Premiums for insurance for damage by fire and other risks
• Maintaining the common property in a state of good and serviceable repair
• Other reasonable administrative costs incurred in daily operations e.g. utilities, licensing etc
  

Moneys in any maintenance fund established shall be deposited only with a licensed bank

Section 17 states that the developer shall:

• Be empower to collect from purchaser maintenance fees from the date of possession or expiration of 14 days from the date of notice, whichever earlier.
• To maintain a register containing details of the development of sub-divided strata lots e.g. floor area, and details of their purchasers

Where any purchaser fails to pay maintenance fees within 28 days of the written demand served, shall constitute a debt owing to the developer and recoverable in any court of competent jurisdiction or in the Small Claims Tribunal as if the amounts are payable under a contract for the provisional of services. (S22 (1))

Post-formation of Management Corporation (S23 & (5))

Used solely and exclusively for

• Maintain common property
• Provide cleaning and security services
• Maintain, repair fixtures & fittings
• Maintain, repair sewers, pipes, wires, cables & ducts used in connection with the enjoyment of 2 or more units
• Pay insurance premiums
• Pay auditing fees
• Pay all charges incurred for administration or maintenance fund and common property.

Developer's Duties ( S10 (5))

• Keep proper books of account for moneys received & paid out of maintenance fund.
• Appoint an auditor
• File with Commissioner, a certified true copy of audited accounts within 28 days of accounts being audited
• Permit Commissioner access to accounting & other records
• Maintain a register containing
• Proposed share value assigned to unit
  • Floor area of unit
  • Name & address of purchaser of unit
  • Name & address of solicitors acting for purchaser
    

Post-formation Of Management Corporation (S9(4) &(5))

Section 23 (1) implies that when a Management Corporation is constituted, the developer shall:

• Transfer all balances of moneys in the maintenance fund previously established into an account in the name of the Management Corporation
• Maintain proper books of accounts
• Appoint an auditor to audit the maintenance fund till the date before the Constitution date
• File a certified true copy of the audited report within 28 days after the audit to the Commissioner.
• Developer exercises and performs the duties of the Management Council of the Management Corporation, until the formation of it at the 1st annual general meeting. To hold first AGM.
• The developer is required to convene the meeting within 1 month after the end of the initial period or within 6 weeks of receipt of a request by subsidiary proprietors of not less than 1/10th of total number of lots.
• To hand over plans and documents at the first AGM. Detailed requirements are in S(26) (4).

 

 

Updated January 2006