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Belongings of Kajang apartment management fee defaulters auctioned

 | August 16, 2017

MPKJ’s action to help apartment management bodies recover management fee arrears has shown results, says official.


Siti-Rosemawar-auctionedPETALING JAYA: The Kajang Municipal Council’s (MPKJ) move to authorise the confiscation of belongings of apartment management fee defaulters, making it the first council in Malaysia to do so, has produced instant results, said a MPKJ offical.

Speaking at a dialogue organised by the Rehda Institute here today, Director of the MPKJ Building Department, Siti Rosemawar Mohd Sahi, said the move, implemented at an apartment in the district, resulted in a 33% increase in management fee payment the following month.

Siti explained that the confiscation of moveable property was one of three ways apartment management bodies could recover unpaid management fees, with the other two being initiating legal action or seeking the help of the Strata Management Tribunal (SMT).

Under the Strata Management Act 2013, the management is allowed to confiscate and auction the moveable property of defaulters, provided they get a warrant from the local council’s Building Department. The proceeds from the auction go to the management.

Confiscated items will be held for 14 days by the management and will be auctioned unless all arrears are settled then.

She said MPKJ became the first council in Malaysia to authorise the seizure of the moveable property of an apartment in May after it received a request from the management of Vista Sri Putra, an apartment of 700 units whose management had been crippled by arrears.

“The management was owed over RM200,000 and couldn’t afford to upkeep the apartment. Even the lifts weren’t working.”

Siti said the management identified 10 debtors and MPKJ sent them notices that their moveable property would be confiscated if they did not meet with the management to settle their debts.

“Only half went to the management to work out repayment plans or pay up arrears. Another five refused to cooperate. So we issued a warrant and carried out a raid, together with the management body and the police.”

Siti said MPKJ officers and the police only stood outside the units while the management staff removed the items.

“Household items such as televisions, smart phones, gas tanks, microwaves and others were confiscated.

“It doesn’t matter if the items belong to a renter or if they had purchased some items on an installment basis. All moveable items can be confiscated.”

Naturally, she said, some of the defaulters refused to open their doors, but they did so after being advised by the police.

After the raid, some of the defaulters settled their arrears of up to RM9,000 in full.

“Clearly some of them have the means to pay their management fees but simply refuse to do so. Some didn’t bother at all, so their items were auctioned. But even the proceeds from the auctioned goods weren’t enough to settle the arrears.”

Siti said before this action, the average payment rate for management fees at the apartment was only around 45%. After the raid, this spiked to 78%.

However, she noted that many remained stubborn and that the repayment rate had since begun to fluctuate between 50% and 65%.

She said the council had drawn up a Standard Operating Procedure for the confiscation of moveable property.

“Management bodies which want to do this must be prepared because our role is to facilitate and issue a warrant. They need to have a store for the confiscated property, fork out money for security and insurance for the items, as well as bear the labour and auctioning costs.”

Siti said it was too soon to say if this method was the most effective in recouping arrears, though it produced instant results and allowed the management to obtain proceeds from the auctions which was better than nothing.

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