Choose your MC committee members carefully

IF you are looking for an existing condominium unit to buy or to rent, what would you consider?

In addition to the pricing and location that meet your expectation, I bet the condition and maintenance of the condominium would also rank high on your checklist.

It is common to see new condos attract more enquiries and rental interests. However, many old condos do generate higher return or rental yield in the same neighbourhood.

What makes the difference? The answer may depend on the people, especially the owners of the properties.

As mentioned in my previous article, while developers and property managers play an important role in the upkeep of properties, the property owners are the main stakeholders in deciding the fate of their properties.

They are the party who approve the budget and usage of their service charge and sinking funds.

As such, at the annual general meeting, homeowners should be careful when they elect their homeowners’ representatives to lead their condo on the management corporation (MC).

The committee members in a MC can make or break the value of a property. A proactive MC will take initiative to invest and maintain the property with their accumulated funds.

In most cases, the annual budget for maintenance and the total amount in the sinking fund could come up to hundreds of thousand or even millions of ringgit after a few years.

Homeowners need to ensure that they elect respectable and trustworthy people in the MC committee to look after their interests.

It would be ideal if there are laws that made it an offence for anyone to offer themselves to be an MC member, if they do not disclose that they had previous criminal records. This will help to ensure that the committee members are of good standing and have homeowners’ interest as their priority.

MC members who focus on the long term will make decisions that will benefit the condo with a three to five years outlook or longer.

Instead of merely cutting down expenses which would make everybody happy today, but may cause the condo to become rundown tomorrow, a far-sighted MC should take the road less travelled, which is to invest today for better quality tomorrow.

Currently, under the Act, there is a restriction for MC chairman, secretary and treasurer to hold only two consecutive terms in the office, and committee members can only be in the office for three terms consecutively. This can be a challenge for a new MC to carry out plans continuously. When new members join the MC, they may tend to have new plans, and there may be lack of sustainability and continuity in terms of implementation.

It would be good if the outgoing MC chairman and members can form sub-committee, and work with the current MC to review plans instead of just implementing a set of new plans after each AGM.

In addition to the MC members, other homeowners can play a greater role in the upkeep of their properties through active participation prior and during the AGM.

The current Act requires that the AGM notice, agenda and financial audit report be posted to homeowners at least 14 days before the AGM. Homeowners are allowed to ask questions and raise additional motions under other matters seven days before the AGM.

The time allocated seems to be very short for important matters to be brought up for discussion.

Perhaps a longer time to be allocated will be beneficial to all, so that all concerned will have a better opportunity to ponder and may even submit resolutions to be decided at the AGM.

For better practice, perhaps the MC can consider to issue the AGM notice even six weeks in advance, and encourage homeowners to give feedback or raise additional motions within two weeks prior to the AGM.

This will give both the MC and homeowners more time to go through and discuss their issues of concern. Instead of the provided 48 hours under the Act, it will benefit the owners if the final notice on AGM and agenda can be announced two weeks prior to the AGM.

When all parties put in efforts prior to the AGM, the meeting can be conducted effectively with constructive discussion.

In property management, true reputation is formed over the long term, not overnight. A well-managed property can stand the test of time, and still preserve and enhance its value. Datuk Alan Tong has over 50 years of experience in property development. He was the World President of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.