To Pay Or Not – The Maintenance Fees

A case study of an upset owner’s refusal to pay

/ June 4, 2021

Apartment buildings; Cover image via Unsplash / Hendrik Will

Feeling reluctant to pay for services rendered unsatisfactorily? It is a common understanding that there is a price for everything in life, which we have to honour in exchange for certain items we desire. However, there may be specific scenarios that we do not feel the obligation to pay. For instance, will you feel the need to pay if the management corporation has not fulfilled its duties to maintain the property properly? I will share my legal experience below.

 

My client, an upset owner, bought a unit where the management poorly managed the whole property. The extent of poor maintenance was upsetting as 3 out of 4 lifts malfunctioned, faded paint, and residents could detect mould or mildew almost everywhere in the building. On this very basis, the said owner refused to pay any maintenance fees and any other fees imposed by the management, which caused legal action to be taken against them. 

 

The management corporation argued that they couldn’t maintain the property if the respective owners were not paying maintenance fees. Although I think the management’s position made perfect sense, the upset owner’s position was also sensible. This is pretty much a chicken and egg scenario. 

 

In that instance, the management demanded the payment of Maintenance Charges & Sinking Fund, Water Charges, Quit Rent, Insurance, One-off Contribution and Finance Charges (“the said Fees”). 

 

Despite that, my client, the owner, insisted that they were justified on the non-payment. Upon checking the management’s documents supporting their claim, I discovered that they might not have the basis to demand the said Fees because their computation was flawed. 

 

Why? 

They computed the said Fees based on Square-Feet basis. Thus, we have successfully struck out the management’s claim against the owner. 

 

The key lessons to be noted from the story are: 

As an owner, you have to pay the management unless the payment imposed is unlawful/illegal under the Strata Management Act 2013 (“SMA”). They would otherwise have the power to deactivate your access card or bar your access into the common property/the premise upon notice. 

 

 As the management or developer, it has to be known that the management’s power to collect payment is provided for under the SMA. 

 

The computation method for the said Fees ought to be done through a share-unit basis but not any other measurement such as square metre and square feet. It would otherwise be considered legally invalid. 

 

The law is also clear that only one payment (being maintenance fees and sinking fund) is allowed. Therefore, the management cannot charge other costs aside from the ones stated. 

 

All in all, the upset owner was lucky because the owner would have failed to defend this case if the management had charged and computed the said Fees on a square-unit basis. The law on strata management is still developing and could be quite technical, which may catch you without you realising. I am certain that you don’t wish to be the upset party. 

 

Jun Hong  is a lawyer practicing in Messrs. JH Yee & Co. (www.jhyee.com)  majoring in commercial and media law who believes in an optimistic route in every difficult situation. The views expressed here are the writer’s own.

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