Joint Management Body (JMB)

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Joint Management Body (JMB)

JMB

Joint Management Body, or JMB for short, is established under section 17 of the Strata Management Act 2013 (SMA) upon bringing together the first annual general meeting of the JMB by the developer.

In this context, the term “developer” is used for any person or body of persons, who develops any land for the purpose of converting it into a residential property, commercial or industrial use, or a combination of such uses.

After the delivery of vacant possession of a parcel to a purchaser, less than 12 months after that is the first annual general meeting of the JMB. In layman terms, a parcel stands for the individual units in a building which is intended for subdivision, held under a separate strata title. A person or a body who has acquired the parcel is known as the purchaser.

In simpler terms, with some developments consisting of hundreds of units, the JMB collaborates with the developer to maintain the property before a proper handover can be carried out. It can take some time for the developer to issue the strata title.

The JMB is a body corporate with perpetual succession, meaning the continuation of a corporation’s or other organisation’s existence despite the occurrence of bankruptcy, insanity, change in membership, or an exit from the business of any owner or member, transfer of stock, and even death.

The JMB body also includes both the developer and the purchaser, and is responsible for the maintenance and management of the building as well as the common property in a strata development project. Section 21 of the Strata Management Act (SMA) states the duties and powers of a JMB, which includes amongst others as listed below:

  • to maintain and manage the parcels and common property of the building, and keep it in a state of good and serviceable repair;
  • to determine and impose the charges for maintenance and management of the parcels and common property of the building;
  • to determine and impose contribution to sinking fund;
  • to do such other things as may not be preferable by the community but is necessary for the proper maintenance and management of the parcels and common property of the building;
  • to comply with any notice or order given or made by the local authority or any competent public authority;
  • to prepare and maintain a register of all parcel owners of the buildings or land intended for subdivision into parcels;
  • to ensure that the accounts required to be maintained by the JMB under the SMA are audited, and to provide audited financial statements for the information to its members;
  • to enforce the by-laws; and
  • to carry out tasks in order to maintain and manage the buildings and land that are intended for subdivision into parcels and the common property

Aside from tasks like overseeing everyday operations such as rubbish collection and general upkeep of cleanliness, the JMB also ensures the general safety of the community.

JMBs in Malaysia can both sue and be sued, although the powers of the JMB is restricted by the law. For example, a JMB is not permitted to sign contracts that bind the committee for a period that does not exceed 12 months.
With perpetual succession mentioned earlier, the JMB will continue to exist until it is dissolved at which point, the MC/JMC will take over its role.

 

What JMB and their associated legal bodies do

Management body

When development is completed, the developer will then call for vacant possession. Unit owners will be given a notice to collect their keys within 14 days. It falls to the developer to call for an Annual General Meeting (AGM) to form a JMB, which can take place anytime for a year beginning from the end date of the 14 days notice.

The JMB can hold a number of 3 to 13 unit owners, including the representative from the developer. The committee then remains as a JMB until the strata title is issued by the land office.

JMB is responsible for electing a joint management committee known as JMC. JMC will then perform the JMB’s duties and conduct its business, as well as exercise any of the powers of the JMB.

Every JMB will have a JMC, consisting of the number of persons determined by the JMB in a general meeting. However, the number of persons cannot be fewer than three and not more than fourteen natural persons.

The powers of a JMB are summarised as follows:

  • To collect the charges from the owners of parcels in proportion to the allocated share units of their respective parcels;
  • To collect the contribution to sinking fund, or money set aside to pay off debt or bonds, from the parcel owners;
  • To approve the expenditure for the carrying out of the maintenance and management of the buildings or land that is intended for subdivision into parcels and the common property;
  • To recover from the owner of any parcel any sum that is expended by the JMB in respect of that parcel in complying with any such notice or order given by the local authority or any other competent public authority;
  • To purchase, hire or acquire movable property for use by the owner of parcels in regards to their enjoyment of the common property;
  • To employ or arrange and obtain the services of any person or agent involved to undertake the maintenance and management of the common property of the building or land intended for subdivision into parcels;
  • To create additional by-laws for the proper maintenance as well as management of the buildings or land that is intended for subdivision into parcels and the common property;
  • To carry out all things that are necessary for the performance of its duties under the SMA and the enforcement of the by-laws.

 

Differences Between JMB, MC and Sub-MC

Joint Management Body (JMB) 1

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To put it in a simpler way, the JMB works with the developer to maintain the property, before a proper handover can be carried out. Meanwhile, the Management Corporation, abbreviated as MC, on the other hand, holds the power to collect charges from the owners of every unit within the development and allows for expenditure in its duty which is to maintain the proper care of the buildings and common property, among others.

As land becomes scarce, more and more Malaysians have opted to live in high-rise developments compared to 20 years ago where everyone preferred a landed home.

The increase in demand has brought on rapid development of apartments and condominiums. Notices from JMB, MC, or JMC are often placed in common areas like the main notice board, lifts, and mailboxes. Alternatively, with the digital era, these notices are sent electronically via emails or texts. This keeps the residents updated on issues like scheduled water cuts, lift maintenance, mosquito fogging or deep sanitisation.

In some cases, JMBs join forces and work together with the city hall of the area, answering to the DBKL’s Commissioner of Building Division (COB).

 

How is the MC different from the JMB?

Joint Management Body (JMB) 2

First and foremost, the MC is sometimes referred to as the JMC. Before 2013, JMBs in Malaysia, specifically, were governed by ACT 663, while MCs fell under ACT 318. After that, both acts were consolidated under one, which is ACT 757. Both the JMBs and MCs are governed under the same Malaysian law.

The main purpose of JMB after a development’s completion is to carry out interim duties as well as straighten out all the legalities of the MC.
While JMB shares the powers held by the MC, JMB does not have all of the powers.

What sets the JMB apart from the MC, is the issuance of the strata title. The JMB exists as a reference body before the issuance of the title. The MC, on the other hand, comes into the picture once the title is issued.

The JMB is tasked with responsibilities such as managing and maintaining common property before the strata titles are issued while an MC takes over these responsibilities only after strata titles are issued.

The JMB is formed upon the conduction of its first AGM, usually assisted by the project’s developer. The Strata Management Act (SMA) sets the deadline for the first AGM to be convened within 12 months from the date of delivery of vacant possession. In cases where the MC comes into existence before the first AGM of the JMB, the first AGM of the JMB is not required, and no JMB shall be established.

An MC, on the other hand, is established upon the opening of a strata register book after the strata titles are issued. However, an MC does not need to take any actions until the first AGM of the MC is convened and the management committee is elected.

The first AGM of an MC can only be convened after proprietors representing at least 25% of the aggregate share units of the development area (excluding the original proprietor of the land and the developer) have caused the strata titles to be registered in their respective names.
A JMB is automatically dissolved within three months from the date of the first AGM of the MC.

While section 17 of the SMA provides that a JMB is a corporate body having perpetual succession, there are certain things that a JMB cannot do but the MC can. Pursuant to the SMA, the powers of an MC include the following:

  • To borrow monies required by the MC in the exercise of its powers or the performance of its duties;
  • To secure the repayment of money borrowed and the payment of interest thereon by negotiable instrument or by a charge of unpaid charges to the maintenance account (whether already imposed or not), or by a charge of any property vested in it or by a combination of any of those means.

The powers to borrow money and offer security for repayment have wide ramifications and could be abused easily. The Parliament has not entrusted the JMB with these two powers in the SMA and we are of the view that this is done intentionally.

Section 74(1) of the SMA provides that, being the lawful proprietor of the lot, the MC can acquire land to be used for purposes with regards to the stratified development area. The MC can also accept the burden or benefit of easement imposed regarding its lot, while a JMB cannot do so because it is not the lawful proprietor of the lot.

The SMA states that the constitution of the JMB shall include the developer. This means that the joint management committee shall comprise a representative from the developer even if the developer has sold all the parcels in the development.
The roles of the MC
The JMC or MC exists as a corporate body, and committee members are officially voted in once the AGM is held.

Listed below are the powers of the MC:

  • To collect the charges from owners of every unit within the development.
  • To collect and allot contributions to the sinking fund.
  • To allow for expenditure in its duty which goes to maintaining proper care of the buildings as well as the common property.
  • To exercise its power to recover the owed charges from the parcel owners in arrears according to its right under the SMA.
  • To purchase or hire tools, equipment, and/or other required machinery in order to maintain the property and common areas.
  • To hire as well as fire manpower and dispose of equipment for the maintenance and enhancement of the property.
  • To enforce the law under SMA.

 

What is a Sub-MC?

Joint Management Body (JMB) 3

A Sub-MC is required if the development is too large and difficult to be handled by one single committee. Let’s take for an example, a mixed development may consist of both residential buildings as well as a commercial space or sports club under one Master Tile.

A Sub-MC allows the creation of limited common property (LCP), to which only selected proprietors have exclusive rights or usage to. Exclusive benefits of the LCP comes with a liability in the form of separate charges as well as sinking fund contributions to the Sub-MC for the management and maintenance of the LCP. This concept makes an efficient run on residential, commercial as well as retail uses.

Residents can only form a Sub-MC if the main MC is already in existence. The Sub-MC runs independently from the MC, although one member from the MC is required to join in the running of the Sub-MC.

Pursuant to the current regime, the SMA only allows the Sub-MC to be established after an MC has been formed. As such, an MC should be formed as soon as possible if the Sub-MC needs to be formed in development.

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