Developer who sold stratified properties but remains the registered proprietor is liable for maintenance charges

Introduction 

An important question of law arose in the case of Perbadanan Pengurusan Marina Crescent v Tribunal Pengurusan Strata, Putrajaya & Anor [2024] i.e., whether a developer cum registered proprietor of stratified properties is liable to pay the outstanding charges for such properties under the Strata Management Act, 2013 (“SMA”) even though it had received the full purchase price for such properties and is merely a “bare trustee”.

High Court’s Decision 

The High Court first held that it has supervisory jurisdiction by judicial review to ensure that an inferior tribunal does not commit an error of law that necessitates curial intervention, and that in this case, the remedy of judicial review was properly invoked as the Strata Management Tribunal had misconstrued the relevant statutory provisions in the SMA.

Exercising its supervisory jurisdiction, the High Court proceeded to find that the developer cum registered proprietor is liable to pay the outstanding charges inter alia because: (i) the provisions of SMA are clear and unambiguous in that a “registered proprietor" ought to be liable to make payment of such charges; and (ii) to say otherwise would be to add words into the provisions in the SMA which were not intended by legislature.

The High Court found that both the developer cum registered proprietor and the purchaser who has yet to be registered as a proprietor of the stratified properties are liable to pay the outstanding charges.

Commentary 

The decision of the High Court provides clarity and certainty in a scenario as to who is liable for maintenance charges where the developer has sold a stratified property but remains registered as its proprietor. Management corporations are also spared the unnecessary burden of having to first determine the beneficial ownership when recovering outstanding charges.

[Note: This decision is pending appeal at the Court of Appeal]