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04-01-13, 15:28
http://www.todayonline.com/Voices/EDC130104-0000013/For-the-collective-good-in-condos
For the collective good in condos
From Paul Chan Poh Hoi
04:45 AM Jan 04, 2013
While waiting for the review of the Building Maintenance and Strata Management Act to be completed, I wish to share some observations from my 25 years living in a condominium.
A past management corporation (MC) once spent more than S$1.2 million in sinking funds to upgrade an open area with expensive marble slabs, which were later hacked off and replaced.
The current MC has spent an estimated S$500,000 on legal fees over the past five years in a dispute with a penthouse subsidiary proprietor over the alteration and addition of a structure approved by the previous MC and relevant authorities.
In the latest Annual General Meeting (AGM), subsidiary proprietors were asked whether to accept or reject the authorities' 1996 position granting additional gross floor area from the estate to townhouse and penthouse owners.
No one knows how long and how much more it will cost to resolve this anomaly. But the question is clear: With what justification and for whose benefits can an MC spend a large sum of sinking funds, and why?
To achieve harmonious condominium living, first, the law should prevent an MC from perpetually usurping management by restricting membership to no more than two-year terms, with eligibility for re-election after a two-year lapse.
This would enable new members to review issues from a different perspective, with an alternative approach, thus preventing potential wastage. Second, "one owner, one vote" should be the spirit of the law, to ensure collective responsibility in an estate and because any facility breakdown affects small and large units equally.
Hence, voting must be done in person at AGMs, which serves a genuine purpose of condominium living, where meeting in person, and not by proxy, is essential. Face-to-face deliberation would result in meaningful outcomes of issues at the AGM.
Third, for greater transparency and accountability of business transactions, minutes of monthly meetings should be made available to all interested subsidiary proprietors. I do not accept the poor excuse of confidentiality, since potential buyers can check the MC's performance and request a copy of the condominium's financial report.
Fourth, the law should exempt sinking fund contributions from the Goods and Services Tax (GST) until they are used. It is wrong to pay GST when there is no exchange of goods or services.
Serving in an MC is a voluntary, thankless job, with the same objectives, however, as one serving in any public institution. The cardinal rule of fiduciary duty, to exercise fair judgment, also applies in the administration of an estate, for the collective good. Removing ambiguities to provide greater transparency is necessary.
For the collective good in condos
From Paul Chan Poh Hoi
04:45 AM Jan 04, 2013
While waiting for the review of the Building Maintenance and Strata Management Act to be completed, I wish to share some observations from my 25 years living in a condominium.
A past management corporation (MC) once spent more than S$1.2 million in sinking funds to upgrade an open area with expensive marble slabs, which were later hacked off and replaced.
The current MC has spent an estimated S$500,000 on legal fees over the past five years in a dispute with a penthouse subsidiary proprietor over the alteration and addition of a structure approved by the previous MC and relevant authorities.
In the latest Annual General Meeting (AGM), subsidiary proprietors were asked whether to accept or reject the authorities' 1996 position granting additional gross floor area from the estate to townhouse and penthouse owners.
No one knows how long and how much more it will cost to resolve this anomaly. But the question is clear: With what justification and for whose benefits can an MC spend a large sum of sinking funds, and why?
To achieve harmonious condominium living, first, the law should prevent an MC from perpetually usurping management by restricting membership to no more than two-year terms, with eligibility for re-election after a two-year lapse.
This would enable new members to review issues from a different perspective, with an alternative approach, thus preventing potential wastage. Second, "one owner, one vote" should be the spirit of the law, to ensure collective responsibility in an estate and because any facility breakdown affects small and large units equally.
Hence, voting must be done in person at AGMs, which serves a genuine purpose of condominium living, where meeting in person, and not by proxy, is essential. Face-to-face deliberation would result in meaningful outcomes of issues at the AGM.
Third, for greater transparency and accountability of business transactions, minutes of monthly meetings should be made available to all interested subsidiary proprietors. I do not accept the poor excuse of confidentiality, since potential buyers can check the MC's performance and request a copy of the condominium's financial report.
Fourth, the law should exempt sinking fund contributions from the Goods and Services Tax (GST) until they are used. It is wrong to pay GST when there is no exchange of goods or services.
Serving in an MC is a voluntary, thankless job, with the same objectives, however, as one serving in any public institution. The cardinal rule of fiduciary duty, to exercise fair judgment, also applies in the administration of an estate, for the collective good. Removing ambiguities to provide greater transparency is necessary.