STRATA TITLE

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Jamaludin Yaakob

STRATA TITLE

CONTENT
Learning Outcomes Introduction Governing Laws Definition of Strata Title Implications of Property Ownership Prove of Ownership Importance of Title Problems with NLC 1965
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Inadequacies of Subsidiary Title General Features of Strata Title Strata Title Act 1965 B & CP (M & M) Act 2007 Legal Issues

Jamaludin Yaakob

STRATA TITLE

Learning Outcomes
At the end of the discussion students should be able to: Explain the legal basis for the needs of strata title; Explain the important concepts of strata title scheme; Discuss critical issues in strata title; and Solve legal problems relating to strata title.
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STRATA TITLE

Introduction A common characteristic of urbanisation having multistorey building for commercial as well as residential purposes. This urbanisation pattern is caused either by choice or by pressure due to unavailability of land in urban centres. The decision to go for vertical development is made possible by advancement in in building technology.
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Introduction This development is supported by the appropriate legislations. The strata title is essentially based on the concept of subdivision of land (horizontally). Whereas, strata title is in fact the subdivision of building horizontally and vertically.

The strata titles are therefore documents relating to ownership of parcels in subdivided buildings.
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Introduction The NLC 1965 had a specific chapter (PART NINE, Chapter 1, sections 151-157) on subdivision buildings. These provisions were found to be inadeqaute to regulate the whole requirements of strata title schemes. In 1985, the Malaysian Parliament had passed the Strata Title Act (Act 318).
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Introduction After 22 years and many complaints, legal issues, court actions and amendments, in 2007, the Parliament had passed another legislation called the Building and Common Property (Management and Maintenance) Act 2007. At the same time the Strata Title Act was also amended to take in account of the Gated and Guarded Community. This new act complements the Strata Title Act 1985.
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Governing Laws National Land Code 1965 Strata Titles Act 1985 Housing Development (Control and Licensing) Act 1966 Strata Titles (Federal Territory of Kuala Lumpur) Rules 1988 Federal Territory of Putrajaya (Modification of Strata Titles act 1985) Order 2002 Building & Common Property (Maintenance and Management) Act 2007
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Definition
Strata Title Act 1985 - titles issued under section 16.

A Strata scheme is a development that divides a building (or land) into parcels, accessory parcel and common property and stipulates a system of management.
Strata titles are issued for each parcel in relation to a strata title scheme. This document carries similar functions and roles as any document of title.
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Definition Strata title is a document issued by the State Authority in relation to ownership of a unit or parcel in a building A procedure that gives legal ownership to subdivision of building into parcels in separate title. A system of ownership of property based on horizontal & vertical subdivision of space of building into lots with separate titles where rights of transfer, lease and charge are not restricted.
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Strata Title Property Residential Condominiums, Apartments, Town Houses, Bungalows, Semi Detached Houses, Terrace Houses, Gated & Guarded Community Commercial office buildings

Retail - shopping complexes

Mixed Used retail/residential, commercial/residential Resorts Serviced Apartments
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Implications of Ownership of Land

POWER SOCIAL STATUS ECONOMY

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Prove of Ownership of Land

Registration Declaration of sale, lease of gift

Occupation

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Importance of Strata Title

Proof of Ownership

Indefeasibility of Title Facilitate Dealings

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Problems with NLC 1965

Problems with titles Problems with dealings Rights of chargee vis-a-vis purchasers Purchasers risk developer sells sold parcels to others

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Problems with Strata Title Scheme

X1 X2 X3 Xx

B2
Caveat

D
Charge Caveat B1
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Problems with Dealings Without title parcel owners encounter difficulty when carrying out dealings: Transfer: no title to register purchasers name, ownership is based on Sale & Purchase Agreement. Charge: not possible to create charge; end financing is secured by deeds of assignment.
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Rights of Chargees Under the NLC 1965 which is based on Torrens System where registration is everything, It therefore appears that registered chargees of the master titles (the bridging financiers) will enjoy priority vis-a-vis purchasers and end financiers, whose rights are based on contracts.

Buxton v. Supreme Finance

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Inadequacy of NLC 1965 1) Developers are not compelled to apply for strata title. 2) Developers may continue to use the land as security. 3) Purchasers of parcels were made to pay quit rents & rates.

4) No provision for application for strata title in phase development.

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Inadequacy of NLC 1965 5) Rights of subsidiary owners were not systematically arranged 6) No provision for common property.

7) No provision for accessories.

8) No provision for management corporation.

9) No provision for MC to make House Rules.

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General Features of Strata Scheme The general concept of subdivision remains unchanged; The strata titles are issued in the name of the proprietors who will subsequently transfer them to purchasers of parcels; Management Corporation automatically comes into existence (except for low cost flats); Common Property is vested in the MC;
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General Features of Strata Scheme Unit Shares are allocated to each parcel; Registered owners of parcels enjoy similar rights as registered proprietors of land under the NLC 1965; The rights of support, service and shelter for the parcels are guaranteed; and Subdivision, partition and amalgamation.
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Overview of Strata Title Act 1985 The 1985 Act (STA), facilitates subdivision of buildings and land. It provides for applications for subdivision, registration and issuance of titles, systematic management of strata schemes; establishes Strata Titles Board for purpose of settling disputes.

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Overview of Strata Title Act 1985 Since it was introduced in 1985, it had been amended four times: introduced which were in: 1) 23rd February 1990 (Act A753),

2) 2nd August 1996 (Act A951),

3) 1st December 2001 (Act A1107);

4) 12 April 2007 (Act A1290).

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Overview of Strata Title Act 1985 In the latest amendment, a further step forward was made to enable the subdivision of land into parcels, accessory parcel and common property. This amendment accommodates the Gated Community Schemes (GACOS).

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Overview of Strata Title Act 1985 PART I Sections 1 - 5

Preliminary Application for subdivision of building or land

Registration of strata titles
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PART II Sections 6 - 14 PART III Sections 15 - 14

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Overview of Strata Title Act 1985 PART IV Sections 20 - 23

Provisional Blocks
Subdivided Buildings: Divisions & Amalgamation of Parcels

PART V Sections 24 - 33 PART VI Sections 34 - 38

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Rights & Obligations attaching to individual parcels and provisional blocks

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Overview of Strata Title Act 1985 PART VII Sections 39 - 55 Management of subdivided building

PART VIII Sections 56 - 57 PART IX Sections 58 - 67

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Termination of subdivided buildings

Deleted
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Overview of Strata Title Act 1985 PART IXA Sections 67A 67X PART X Sections 68 - 85

Strata Titles Board

Miscellaneous

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Buxton & Anor v Supreme Finance In James Edward Buxton & Anor v Supreme Finance (M) Berhad [1992] 4CLJ 1945 the Supreme Court had held at page 1949: In all these cases, it was held that the interest of a registered charge is indefeasible by s. 340(1) of the Code unless it is made defeasible by s. 340(2). . The interest of a bona fide purchaser for value cannot prevail over that of a registered chargee.
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