BUILDINGS AND COMMON PROPERTY (MAINTENANCE AND MANAGEMENT) (AMENDMENT) BILL

Order for Second Reading read. 7.10 p.m.

The Minister for National Development (Mr Teh Cheang Wan): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

In Singapore, purchasers are allowed to take possession of the premises when the Temporary Occupation Licence is issued by the Development and Building Control Division and before titles are issued and management corporations formed. This leads to a situation where developers are required to manage and maintain the buildings for a period of time. Purchasers will only be responsible for maintenance when strata titles are obtained and management corporations formed.

As long as the present system of sale and purchase of residential and commercial properties is maintained, we will have to take measures to ensure that deve- lopers maintain the buildings properly before the purchasers can manage the buildings themselves. From time to time, we have received complaints about the poor maintenance of buildings by developers. This could be due to insufficient funds for maintenance, incompetent management, or indifference on the part of the developers. There are also instances of unscrupulous developers trying to make a profit from the maintenance of the buildings.

Some purchasers are also to be blamed for the dilapidated state of their buildings and the common properties in such buildings. Without legal backing, developers face the difficult task of compelling some of the recalcitrant residents or owners to pay maintenance charges. As a result, the common properties are left in a state of disrepair and the building rapidly becomes dilapidated.

The Amendment Bill before the House seeks to ensure that buildings intended for strata subdivision are properly maintained by the developers during the interim period when such buildings are ready for occupation and before they are handed over to the management corporations for maintenance.

The main amendments are:-

(i) A developer must set up a maintenance fund for each development which has more than four units sold to more than two purchasers and is intended for strata subdivision. All maintenance charges collected from purchasers of the flats and the income derived from the common property must be paid into this fund which shall be used to manage and maintain the common property and other approved expenditure. The developer will act as trustee of the fund for the purchaser's benefit and any surplus money will be transferred to the management corporation for the development when it is formed. The developer is obliged to keep proper accounts of all income and expenditure relating to the fund.

(ii) The purchaser of a flat who fails or refuses to pay the maintenance contributions within 28 days of the date of receipt of a written demand from the developer under the terms of the contract for sale and purchase, will have committed an offence and shall be liable on conviction to a fine not exceeding $5,000 and to a further fine not exceeding $50 for every day during which maintenance fees remain unpaid after conviction.

(iii) The Commissioner of Buildings is empowered to appoint a managing agent if he is satisfied that the developer is not satisfactorily carrying out the management and maintenance. The managing agent must lodge with the Commissioner a bond for a prescribed amount to make good any loss resulting from his failure to duly account for monies received or held by him.

(iv) The developer of a building with more than four units intended for strata subdivision must deposit a sum which the Commissioner may utilize towards the expenditure incurred to rectify defects to the common property discovered within the maintenance period.

(v) The developer shall maintain a register of all the flats containing particulars of the proposed share value, the floor area, the purchaser and his solicitors.

There are other minor amendments which are incidental and include definitions of the terms "development"p"flat", "maintenance fund", "stratum" and a more comprehensive definition of "common property" for the purposes of the Act.

Sir, I beg to move.

Question proposed.

Mr Tan Soo Khoon (Alexandra): Sir, I rise in support of the Bill.

Speaking on this Bill, I can claim to speak with some experience on this subject as I work in a building in which the occupiers have to sort out numerous problems with the developer regarding its maintenance. This Bill could not have come at a better time. With so many new buildings being built all over Singapore, it is only fitting that we enact legislation to ensure that buildings in the private sector are properly maintained.

The problems of building maintenance normally arise as a result of, firstly, when the developer of the building fails to manage and maintain the development satisfactorily and, secondly, when tenants and subsidiary proprietors of units in the building fail to pay their maintenance fees for some reason or other. This Bill will therefore require a developer to set up a maintenance fund with all maintenance charges collected from purchasers of units-in the development, and it also makes it an offence for any purchaser who refuses to pay his share of the charges.

What is interesting about this Bill today is that the duties and responsibilities of the developer with regard to the maintenance of the building are now clearly defined. Clause 4 of the Bill states very clearly what the maintenance funds collected must be utilized for.

Sir, developers are known to neglect their responsibilities by:

(1) failing to maintain the common property in the development in good condition;

(2) failing to provide a satisfactory standard of cleaning and security services;

(3) failing to repair damages occurring in structural fixtures and fittings;

(4) failing to provide adequate insurance to cover the development against damage.

These are just some of the areas where irresponsible developers can willingly or unwillingly cause their buildings to deteriorate. If a developer is interested only in making quick money through the sale of the units in his development, he will not pay attention to its maintenance. Then the general condition of the building deteriorates and, in the end, purchasers suffer from poor maintenance and consequently the values of their properties are not enhanced.

Not all the blame falls on developers. Sometimes purchasers or occupiers refuse to pay maintenance fees. Very often they refuse to pay on the ground that the developer is not doing his job properly. This Bill therefore makes it an offence for any occupier refusing to pay maintenance fees. It is a fair principle. Purchasers must pay the charges and developers must get the job done. Failure on the part of either party to carry out his obligations under the Act is an offence. No one can quarrel with the rationale underlying this Bill. We all want a clean Singapore and we do not want our buildings to degenerate into modern slums.

One final point, Sir. In Singapore today there are many buildings where Temporary Occupation Licences have been issued, and there are many examples of such buildings where the state of maintenance is at a poor level. What I would like to ask the Minister is whether he would, as provided for under clause 4 of the Bill, by way of Gazette notification bring such buildings under the ambit of the Act and thereby require the developers to meet the obligations as provided and, if so, when he intends to do so.

Mr Teh Cheang Wan: Mr Deputy Speaker, Sir, I wish to thank the hon. Member for Alexandra for supporting the Bill. I will ask my Ministry to look into his request of bringing in those buildings for which Temporary Occupation Licences have been issued under the ambit of this Bill because generally there are a lot of complaints about the maintenance and management of these buildings.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Teh Cheang Wan].

Bill considered in Committee; reported without amendment; read a Third time and passed.