SINGAPORE ARMED FORCES (AMENDMENT) BILL

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SINGAPORE ARMED FORCES (AMENDMENT) BILL: "to amend the Singapore Armed Forces Act (Chapter 295 of the 2000 Revised Edition)",

presented by the Minister for Defence (RAdm Teo Chee Hean); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

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BUILDING MAINTENANCE AND MANAGEMENT BILL: Order for Second Reading read.

The Minister for National Development (Mr Mah Bow Tan): Mr Speaker, Sir, I beg to move, "That the Bill be read a Second time."

Building Maintenance and Management Act

Sir, two pieces of legislation currently govern the management and maintenance of buildings in Singapore . These are the Land Titles (Strata) Act (LTSA) and the Buildings and Common Property (Maintenance and Management) Act (BCPA).

This Bill proposes to merge Part IV and Part VI of the LTSA and the entire BCPA into an integrated "Building Maintenance and Management Act". Part IV of the LTSA governs the management of strata sub-divided buildings. Part VI relates to the Strata Titles Boards, which provide an avenue for resolving management disputes in strata developments. On the

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other hand, the BCPA governs the maintenance of all buildings, and management of strata developments prior to the formation of the Management Corporation or MC.

The current BCPA will be repealed. For ease of administration and convenience to the public, the new Act will come under MND's purview. The Ministry of Law will continue to administer the reduced LTSA, which covers the set-up of the strata scheme and the en-bloc sales of property.

Transferring Strata Titles Boards to MND

The Government has also decided to transfer the administration of the Strata Titles Boards from the Ministry of Law to the Ministry of National Developemnt. This takes into account that most of the disputes heard by the Strata Titles Boards are related to the management and maintenance of buildings, which are under the purview of MND. However, the Strata Titles Boards will continue to hear disputes on en-bloc property sales, even after the transfer from the Ministry of Law.

Need for Change

Sir, let me explain why there is a need for change. Both the LTSA and the BCPA have served us well. However, some shortcomings and unanticipated problems with the provisions of the Acts have surfaced over the past few years. I should also point out that since the last major review of the LTSA, which was in 1987, the number of strata units and their MCs have more than doubled to 170,000 strata units and 2,700 MCs respectively.

Sir, this Bill seeks to provide for more effective management and maintenance of strata developments, recognising differences in interests amongst stakeholders. Our thrust is to provide flexibility by empowering MCs to make decisions, and

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therefore encourage self-regulation. This will then allow Government to reduce its involvement in the affairs of the MCs.

In undertaking the review that culminated in the preparation of the Bill, the Building and Construction Authority (BCA) has studied similar legislation in Australia and Canada , consulted extensively with the industry, and held an open consultation session involving members of the public. Discussions were also held with relevant Government agencies as well as the GPC for National Development. Useful features found in these foreign legislation as well as feedback from the industry and public have been incorporated in the Bill.

Amendments to the LTSA

I shall now elaborate on the key amendments in this Bill, beginning first with those related to the LTSA.

Providing for Mixed-use Strata Developments

The present system for managing strata developments allows only one MC to be formed for each strata development. However, in a mixed-use development, eg, a mixed shopping, office and residential complex, there are various user groups whose interests and priorities are likely to be different. Each group would be more concerned about the management and maintenance of common properties that have a direct impact on it. The MC would have difficulty implementing improvements to common properties, as the benefits may be perceived to accrue more to a certain group than to others.

We do not have a long enough experience in managing mixed-use strata developments. The LTSA was enacted only in 1967. Our laws have not adequately provided for such conflicts to be

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resolved. Therefore, we have looked at more established strata management models in other countries, such as Canada and Australia , which have a longer history.

Sir, this Bill proposes to introduce an option of a two-tier MC system for mixed-use developments, adapted from the British Columbia model. There will be a main MC responsible for the property common to all subsidiary proprietors (SPs), while sub-MCs will manage the "limited common property" intended for the exclusive use of their respective user groups. These sub-MCs will have the right to levy contributions from them for its maintenance or improvement.

This option will also be extended to residential developments with different types of strata lots. For example, a residential development may have high-rise tower blocks and low-rise walk-up blocks or town houses. There could then be one sub-MC for the high-rise towers and another sub-MC for the low-rise blocks or town houses. This would address the usual complaint that certain common properties serve only a particular group of residents, eg, lifts in high-rise blocks.

Sir, the intention is neither to create segregations within a community nor to encourage the proliferation of MCs. The spirit behind this provision is to allow for flexible management of strata developments, with clear differentiation in the interests of various user groups, and clear physical delineation of common properties.

For a start, the two-tier MC system will be applicable only to new developments. Once we gain more experience, we can consider applying it to existing developments. There is a provision allowing the Minister to approve the conversion

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of an existing single MC to a two-tier MC, provided the MC is able to pass a comprehensive resolution for the conversion.

Improving Management Framework

The Bill also proposes several other amendments to improve the clarity of the existing provisions and the effectiveness of the strata management framework. For example, the Bill explicitly sets out the documents that the developer has to hand over to the MC at the first AGM or make available for inspection. There were cases in the past where the MCs had to resort to legal action to obtain certain documents and records from the developers. With the provision in the Bill, I hope such disputes will no longer occur.

Some MCs were also in the news lately. Various issues and allegations involving them were widely reported in the media. These include:

(a) Irregularities in collection of maintenance contributions;

(b) Managing Agents (MAs) canvassing for votes on behalf of certain groups;

(c) SPs elected to office while in arrears of maintenance contributions; and

(d) Council members or MAs failing to declare their interests when making decisions on behalf of the MC.

The Bill seeks to curb such abuses or undesirable practices. An SP, who is in arrears, would no longer qualify for election as a council member. MAs will not be allowed to canvass for votes on behalf of a SP or council member. To prevent any conflict of interests, SPs can serve as MAs only with the approval of the MC. For better corporate governance, the tenure of the treasurer in the council will be limited to no more than two consecutive terms.

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To strengthen the management framework, the Bill also proposes to reduce the "initial period" when the developer is managing the development, from a maximum of 24 months to a maximum of 12 months or on the day of the first AGM, whichever is earlier. With this change, the MC can then take over the management of the development within a shorter time. The Bill also proposes to reduce the quorum for general meetings from 50% of the aggregate share value to either 30% of the share value or not less than 100 SPs present, whichever is lower, either in person or by proxy. The purpose of this is to make it easier for MCs to convene a general meeting on urgent issues.

Decriminalising Non-Compliance

Consistent with the objective of reducing Government intervention and enhancing self-regulation, the Bill proposes to decriminalise those offences in the existing law that do not have a significant impact on public interest. Only offences related to fraud and cheating or regulatory provisions where the obligation is to the Government would be retained, eg, furnishing false information, or failing to comply with the lawful demands of the Commissioner of Buildings.

Some examples of offences that will be decriminalised are: failure of SPs to pay maintenance charges; breach of the by-laws by SPs; failure of the MC to provide information to SPs; and failure of any person to hand over records or information to the MC. Notwithstanding that such non-compliance is decriminalised, the aggrieved party could still seek recourse through the Strata Titles Boards or take civil action via the courts.

Enhancing the Powers of the MCs

The MC should be the supreme decision-making body of a strata development. However, when a common

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property is altered that benefits any SP, the MC presently does not have the power to alter the maintenance contributions arising from that alteration. Under the Bill, the MC would be able to decide on changes to such contributions by passing a comprehensive resolution; in other words, obtaining the consent of at least 90% of the aggregate share value of all the lots in the development.

The MC will also no longer need to obtain the Commissioner of Buildings's approval before altering or erecting structures on common property during the initial period, when the developer is still maintaining the strata development. The MC could proceed with the work by passing a special resolution, ie, obtaining consent of at least 75% of the share value of the valid votes at a general meeting.

The Bill will also empower the MC to lease out common property or confer special privileges for its use to SPs and others. Decisions on short-term leases of up to one year can be made without the need for a resolution to be passed at a general meeting. However, leases up to three years will require a special resolution, ie, consent of 75% of valid votes, while longer leases will require 90% of valid votes.

Amendments in the BCPA

Sir, I will now move on to the key amendments related to the BCPA.

Making the developer contribute to the maintenance of unsold units

Currently, the law is not clear on the liability of the developer to contribute to the maintenance of unsold units in a development. As a result, there are varying practices in the industry. Under the Bill, the developer would have to set up a maintenance fund when any

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purchaser starts to pay contribution, and pay maintenance contributions to the fund for all unsold units, as well as for sold units that have not been handed over to purchasers.

Furnishing copy of audited accounts of the maintenance fund to purchasers

Developers are currently required to furnish a copy of the audited accounts of the maintenance fund to the COB, but are not required to extend a copy to the purchasers. In fact, some developers have refused to do so upon purchasers' request. As the purchasers contribute to the maintenance fund, they have a legitimate right to know how the money is spent. The Bill will require the developer to furnish a copy of the audited account of the maintenance fund to purchasers upon request, as well as to allow them to view relevant records and documents.

Removing the requirement for the developer to place a deposit

An existing provision in the BCPA requires the developer to place a deposit with the COB that is to pay for any defects rectification in the common property occurring within three years after the certificate of statutory completion has been issued. Unused deposit would be released to the developer at the end of the period.

Since the introduction of this requirement in 1982, the COB has rarely been called upon to use the deposit. The obligation of the developer to rectify defects is already spelt out in the sale and purchase agreement. Where defects in the common property are concerned, recent court decisions have established that the MC could seek redress from the developers, even after the defects liability period. The administrative provision requiring developers to place deposits with

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the COB is therefore of little value in today's context and will be removed.

Sir, this Bill will substantively improve the existing framework for the management and maintenance of strata developments in Singapore .

Sir, I beg to move.

Question proposed.

Dr Teo Ho Pin: Mr Speaker, Sir, the proposed Bill marks a milestone in the maintenance and management of buildings and common property of both strata title and non-strata developments in Singapore. It merges the existing Land Titles (Strata) Act and the Buildings and Common Property (Maintenance and Management) Act to form a new Act, which is the Building Maintenance and Management Act. The Act will be administered by one Ministry (ie, the National Development Ministry), instead of two Ministries presently.

There are five key amendments in the Bill as follows:

(1) Provision for the management of mixed-use strata developments;

(2) Promotion of self-governance among management corporations;

(3) Ensuring more equitable sharing of maintenance costs;

(4) Definition of roles of all stakeholders; and

(5) Administration of the new legislation.

Sir, the amendments will have impact on more than 2,600 management corporations and over 170,000 units of strata title and non-strata developments in Singapore. It will affect both existing and future subsidiary proprietors and property

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owners. The impact will be more pronounced and differential for subsidiary proprietors of mixed-use strata developments. At the same time, various stakeholders of property development (ie, developers, managing agents, and management corporations) are also affected. As the Bill has a wide ranging impact on many interested parties, I would urge the Minister to consider committing the Bill to a Select Committee for public consultation and scrutiny.

Fundamental questions to address

Sir, there are three fundamental questions which need to be addressed before debating on the proposed Bill:

(1) Is the concept of communal living in strata title developments successful in Singapore?

(2) Are subsidiary proprietors ready for self-governance in strata title developments?

(3) Will the Bill affect the standard of maintenance of strata developments in Singapore?

Although the concept of communal living in strata title development was introduced in the 70s, many subsidiary proprietors are still still not aware of their roles and responsibioities. The general lack of community spirit and apathy among subsidiary proprietors has posed much problem in the management of such developments. Common problems include lack of quorum to convene general meetings, lack of volunteers to be council members in the management corporations, lack of understanding of the roles of developers, management corporations, managing agents and subsidiary proprietors, abuses of powers resulting in corruption and malpractices, failure to comply to various statutory requirements and the lack of understanding of

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the Land Titles (Strata) Act, resulting in disputes among various stakeholders.

These problems are further aggravated in mixed-use strata developments where the interests of various stakeholders are very different. As such, much time and resources were wasted to resolve these problems, and many stakeholders have called on the Government to review the Land Titles (Strata) Act. Sir, I hope the Minister can highlight to the House the key desired outcomes of this Bill.

Sir, in my opinion, there are three attribtues of success in strata title developments which will enhance professional management and strenghten communal living:

(1) We need a clear set of legislation defining the roles and responsibilities of all stakeholders of a strata title development.

(2) We need a strong community spirit and a "give-and-take" attitude among

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subsidiary proprietors.

(3) We must adopt a professional approach towards maintenance management by the management corporations and their agents.

The proposed Bill may address the first attribute by better defining the roles and responsibilities of owner developers, subsidiary proprietors, management corporations and managing agents. But it has not facilitated the development of a strong community spirit among subsidiary proprietors and provided adequate measures to increase the professionalism of managing such developments. Sir, let me now discuss the key items in the Bill.

(1) Clearer definition of roles of stakeholders

Sir, I support the various amendments to better define the roles of the owner developers, management corporations, council memebrs, managing agents and subsidiary proprietors. The key objective of these changes is to ensure the election of council members with integrity and bona fide intention to look after the interests of all subsidiary proprietors. It also laid out rules on the code of conduct and ethics of council members, managing agents and subsidiary proprietors so as to avoid corruption and malpractices.

But the amendment does not define clearly the role of the owner developer in handing over documents to the management corporation at the first Annual General Meeting. At present, the Act requires the developer to hand over "all plans, specifications, certificates (other than certificates of title for the lots), diagrams and other documents relating to the parcel or building to the MC at the first AGM". In practice, there are disputes between developers and management corporations concerning the definition of these documents. To avoid unnecessary or unreasonable demand from either party, it will be clearer if the Act can define these documents.

Sir, in order to ensure that owner developers hand over all relevant documents to the management corporations, I would propose that we specify clearly the list of documents and items to be handed over to the MC at the first AGM in clause 25(4)(a). The proposed list should include the following:

(1) Building plans;

(2) Share value allotments;

(3) Strata title plans and strata roll;

(4) As-built drawings on architectural, structural, M&E and open area items;

(5) Operation and instruction manuals;

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(6) Electrical diagrams and plumbing schematic drawings;

(7) Guarantees/warranties/indemnities when assigned/novated to MCST;

(8) Certificate for Statutory Completion;

(9) Current insurance policies;

(10) Legal covenant, caution and restrictions on use of land in the title, if any;

(11) Current maintenance service contracts;

(12) Notices/directions from Government or any authorities, if any;

(13) Keys to all common properties;

(14) Inventory list of furniture and equipment in common areas and common properties.

(15) Records of accounts and book-keeping;

(16) Audited accounts and reports related to the period after the MC is legally incorporated; and

(17) Any other records relevant to the management of the strata development.

In this way, the MCs will be better positioned to maintain the property in a good and serviceable condition.

Sir, I would also urge the Minister to further define the roles and responsibilities of subsidiary proprietors in keeping their strata title lots in a good and serviceable condition. Today, many subsidiary proprietors are still not familiar with their responsibilities to maintain their own strata title lots, and many are not sure which elements in their strata lots are common property or their own property. Such lack of understanding has led to many disputes

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and unauthorised alterations in some strata developments which may pose safety hazards.

The recent falling of external windows is an example which illustrates the lack of understanding of responsibilities of unit owners. Although the external facade of the windows comes under the responsibility of management corporations, subsidiary proprietors are responsible to keep the windows in a good and servicable condition, including conducting periodic inspections on the windows. Sir, we need to re-emphasise the individual responsibility of subsidiary proprietors in maintaining their own strata title lots.

(2) Mixed-use strata developments

The Bill proposed a two-tier MC system for mixed-use strata developments and residential developments with different types of residential lots to provide more effective management. This serves to delineate areas to better cater to the needs of different users in mixed-use strata developments, and at the same time provides a more equitable maintenance contribution formula. These amendments arise mainly due to various problems faced by management corporations and subsidiary proprietors of mixed-use strata developments. The common problems may be listed as follows:

(1) Different and conflicting interests among different users of mixed-use strata developments such as residential, commercial or office units;

(2) Car parking problems such as allocation of car parks lots, car park fees, indiscriminate parking and congestion, and car park lots for visitors and the general public;

(3) A lack of representation of council members from different user groups;

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(4) Security and access problems between subsidiary proprietors and the general public;

(5) Maintenance fee contribution and fund allocation for maintenance purposes; and

(6) "User Pays" attitude among subsidiary proprietors.

Sir, in the United States, common property is divided into various categories, namely, common element, residential limited element and commercial limited element for management purposes.

The Bill proposes a similar approach in delineating the common property into two main categories, namely, common property and limited common property. This is based on the exclusive benefit of two or more subsidiary proprietors of those proposed lots in the land parcel.

Prima facie , this arrangement seems to cater to the needs of different groups of users. But, it has the inherent "divide and rule" impact on the development. Thus, potential problems of cross-boundary conflicts may arise from the two-tier MC system. This arrangement is also unlikely to promote community spirit and bonding among the different tiers of MCs and subsidiary proprietors. In today's apathetic climate among the subsidiary proprietors to serve in MCs, I am concerned whether a two or more tier MC system is a sustainable solution in managing mixed-use strata developments.

Sir, instead of fixing the problems downstream where the design of the mixed-use strata developments has resulted in these problems, we should tackle the problems upstream at the planning and design stage. Many problems faced in mixed-use strata developments can be resolved through proper planning and design of the development. For example, clearer delineation of functional and physical common property, and the provision of separate facilities or

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access will reduce potential conflicts among users.

We should adopt a dispute avoidance strategy, instead of legislating, to manage disputes among subsidiary proprietors. Potential purchasers of mixed-use strata developments must fully understand the implications (that is, the conveniences and the inconveniences) of staying in such developments before making purchase decisions. This will facilitate better understanding among subsidiary proprietors and the management corporations.

In addition, property buyers must be given more accurate information on the basis and amount of maintenance contribution at the time of purchase. Such transparency will help to avoid disputes at a later stage. I would urge all developers to be more transparent and provide more accurate representations of their developments when marketing their properties.

(3) Promotion of self-governance

Sir, I support the move to promote self-governance by MCs and reduce Government intervention in the management of strate title developments. Except for safety and public health matters, we must empower the MCs to take on more responsibilities in the management of their estates. A common conflict among subsidiary proprietors is the allotment of share value and formula for maintenance contribution. The present method of allotting share value is a "one size fits all" computation based on floor area groupings in 100 square metres. Thus, a unit of 101 square metres and one of 199 square metres are allotted the same share value as they are in the same grouping. I would propose to amend the schedule for the share value allotment by the Commissioner of Buildings, as stated in clauses 10 and 11 of the Bill.

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Sir, a more equitable method would be to compute the share value based on the built-up floor area of each lot. This will align the share value of each lot to be proportional to its built-up floor area. Thus, each subsidiary proprietor will contribute towards the maintenance fund based on the built-up floor area (rounded to the nearest square metre as stated in the Sale and Purchase Agreement).

Once the share value allotment is agreed and approved by the Commissioner, it should be made known to the purchasers by stating it in the Sale and Purchase Agreement. The share value should not be changed once it is accepted and should form the basis of contribution by all subsidiary proprietors towards the management of the development.

But I support the amendment in clause 40 to empower MCs to alter the maintenance contribution formula so that more equity could be achieved among subsidiary proprietors. This is especially so when there are changes in the common property which benefit certain subsidiary proprietors. As such, different groups of SPs may levy different maintenance contribution based on the circumstances and consensus of the subsidiary proprietors. This empowerment includes the use and rental of common property. The amendment will also encourage SPs to take more ownership of their common property.

(4) Professional management

The management of a property to satisfy the needs of many owners is a complex task which requires professionalism and good management practices. If the Government were to promote self-governance in strata developments, we need to establish a framework to ensure that professional property management services are carried out to maintain these developments properly so as to safeguard the interests of all stakeholders and the

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general public. Statutory compliance with regard to safety and public health must be complied and enforced stringently. The recent case of sewage water flowing into water tank clearly highlights the importance of statutory compliance and the need for professional property management.

At present, the "cut throat" competition among property management firms has resulted in severe fee undercutting. This has compromised the standard of professional services rendered, resulting in an unhealthy state of affairs in many MCs. While many SPs demand high standard of maintenance, not many are very forthcoming when it comes to paying for professional management and maintenance services. This dichotomy has led to a situation where SPs, MCs and MAs are all unhappy with the management of their developments. This situation is further compounded by the lack of understanding of council members of the Land Titles (Strata) Act and various abuses of power by some council members.

Sir, unless we adopt a professional approach towards maintenance, more disputes will surface in the future. These disputes are time consuming, and waste national resources. Many of these disputes have ended up in courts and soured relationships among SPs.

To improve the professional management of strata developments, we need to train and register property management professionals. The fact that we need to amend the Act to include a new clause, clause 67, to prohibit the activity of

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managing agents in lobbying for votes clearly reflects the unprofessional conduct of some managing agents in practice. This clause will not be easily enforceable as it is onerous to gather evidence of managing agents lobbying for votes.

Thus, I would urge the Minister to consider inserting a clause to appoint managing agents or property managers who are professionally trained and registered to manage strata title developments. The professional code of practice of managing agents or property managers can be clearly defined in the Act too. With professional management, the MCs will be properly guided to formulate maintenance policies which will look after the interests of all subsidiary proprietors. This will avoid non-compliance with statutory requirements, abuse of powers, and unauthorised practices in strata developments.

Sir, I support the Bill, but would urge the Minister to commit the Bill to a Select Committee for further refinements to better represent the interests of all stakeholders in strata title developments and, at the same time, to gain their support for the Bill.

Dr Amy Khor Lean Suan: Sir, before I begin, I would like to declare my interest on this Bill as Chairman of the Singapore Institute of Surveyors and Valuers, a professional organisation whose members include land surveyors, quantity surveyors, property consultants, valuers, agents and property managers, many of whom act as managing agents in property developments.

As noted by the Minister, the last major review of the LTSA relating to the maintenance and management of strata subdivided buildings was close to two decades ago in 1987. Over the years, whilst the legislation has helped to provide a sound framework for the maintenance and management of strata subdivided buildings in Singapore, various shortcomings have surfaced. For instance, the current floor area grouping method used for share value allocation in residential developments has led to complaints from smaller unit owners that it is unfair to impose the same maintenance charge on them as the owners of larger units in

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the same grouping. Larger unit owners, on the other hand, say that it is inequitable that the smaller units should have the same share of the undivided common property and voting rights.

There have also been complaints of abuse of power by MCs. The recent high profile People's Park Centre and People's Park Complex fiasco, where the MC Chairman managed to get re-elected year after year, despite owing substantial maintenance fees, are cases in point.

After having run their course for nearly two decades without any major revisions, except in 1999 which relates specifically to collective sale, the LTSA together with the BCPA are clearly in need of urgent revision to ensure their continued efficacy.

Whilst I agree with the general intention and objectives of the Bill, as well as most of its provisions, I would like to highlight five provisions which warrant further consideration and refinements.

Firstly, limited common property and subsidiary management corporations. Sir, again, as noted by the Minister, to facilitate the management of mixed-use developments and certain types of residential developments as well as address the operational problems currently faced by the MCs of such developments, the Bill proposes to introduce the option of a two-tier system. This is indeed a major fundamental change made to the present legislation, and may I venture to add, can be viewed positively as a 100% improvement over the current one-tier system.

The sub-MC for a user group will be responsible for managing the "limited" common property intended for the exclusive use of that user group, such as the use of the swimming pool by the residential user group. The sub-MC will

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have the power to levy contributions for the maintenance and improvement of that "limited" common property. This should result in more equitable sharing of maintenance contribution in mixed-use developments.

Clause 76(1) of the Bill explicitly spells out the formation of sub-MCs under three different scenarios, firstly, mixed-use developments, comprising residential and non-residential uses; secondly, non-residential developments, comprising different uses, such as shops and offices or shops and hotels; and thirdly, residential developments, comprising different types of residential units, like high-rise apartments and townhouses.

The Bill, however, does not explicitly allow for the formation of separate sub-MCs for non-residential developments, comprising units of similar use, but which can be delineated as separate buildings, for instance, the five separate and distinct office towers in Suntec City and the two office towers in Ngee Ann City.

Restricting the creation of one sub-MC per user group would not help resolve the problem where owners of an office tower may want to upgrade their lifts but are unable to do so as the owners of the other office towers are opposed to the idea. Presumably, this scenario could come under the ambit of clause 76(3) which allows the Minister to approve other forms of subsidiary MCs. However, such non-residential developments, comprising strata lots of similar use but located in separate buildings, are likely to become more and more common in the future, particularly with the development of the Business Financial Centre.

Hence, to facilitate such developments and at the same time provide more clarity, I propose that clause 76(1) be amended to explicitly allow for the formation of sub-MCs, not just for subsidiary proprietors of non-residential lots if they use

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their lots for significantly different uses, but also for lots located in buildings that can be delineated separately. However, to address the concern that if there is no restriction of one sub-MC per user group, there may be too many sub-MCs in a single development which could lead to more problems, a minimum total strata area of, say, 5,000 square metres, could be stipulated before such a sub-MC could be formed.

Secondly, one too many types of resolutions. Under "Interpretation", clause 2(2) of the Bill, it has provided for six different types of resolutions. The six resolutions, of which the first three are found in the existing Act are: ordinary resolution, special resolution, unanimous resolution, 90% resolution, comprehensive resolution with 90% consent, and resolution without dissent. I would like to ask the Minister if there is indeed a need to have so many different types of resolution. Can we not resolve to keep to just the three existing types of resolutions, that is, ordinary resolution, special resolution and unanimous resolution? Or, if we really need it, allow at most, say, four, including the comprehensive resolution required for the creation of limited common property or the changing of the maintenance contribution formula.

We need to bear in mind that MCs comprise owners of strata units who are often laymen and not lawyers. Therefore, the provisions of the Bill should be made as clear, concise and simple as possible to reduce ambiguities in interpretation.

Furthermore, I note that the definitions for special and unanimous resolutions have been changed in the Bill. For special resolutions, the definition is now changed to "at least 75% of the aggregate share value of the lots of all eligible subsidiary proprietors vote for", instead of the present "not more than 25% vote against". A similar change is also made to the definition of unanimous resolutions, where

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it now stipulates "everyone votes for" instead of "no one votes against". It would be more expedient to have the existing definitions of special and unanimous resolutions retained. This is because the new definitions require supporters to make the effort to vote for the motion, which is more difficult to fulfil in practice than requiring those who object to vote against.

The apathy of many individual owners has resulted in poor attendance at general meetings. In most instances, very few individual owners, besides the office bearers themselves, attend the general meeting. Moreover, very often, those who make the special effort to attend are normally those who may have some unhappiness over the way the development is managed and are therefore likely to vote against and not vote for. Of course, proxy votes can be used but, again, the general apathy of owners means that it would be easier to allow for the converse, ie, that as long as not more than a certain percentage vote against, the resolution can be carried through. This should also apply to the other resolutions.

Thirdly, managing agents. The Bill provides for the appointment of managing agents by the MC and allows the latter to delegate all of its powers, duties and functions to the MA. However, the Bill does not stipulate some minimum qualifications and standards required of the MA. Hence, as it stands, anyone can offer his services as a managing agent. This is in contrast to the stringent requirements imposed for other professions, such as insurance agents and financial advisors. In fact, even maid agencies are now required to be accredited.

As the MC comprises owners who generally have neither the expertise nor the time to devote to the maintenance and management of the building, most, if not all the duties of the MC are commonly delegated to the managing agent. Further,

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managing developments, particularly large-scale projects, requires some minimum knowledge and understanding of various technical fields, such as building and engineering services, legislation relating to property, and even the proper conduct of meetings. Ignorance or a lack of knowledge and understanding of property maintenance and management matters may lead to costly oversight and mistakes which can pose hazards to the occupiers of the premises, as well as affect the reputation and, ultimately, the value of the property.

It is thus proposed that the Bill should require that the managing agent engaged by the MC should possess at least a certain minimum qualification and standard. Alternatively, if the Ministry prefers a more hands-off approach, the Bill could simply require that the managing agents be accredited managing agents of recognised professional bodies representing them, such as the SISV and the Association of Property and Facility Managers. This will ensure that the managing agents appointed possess a minimum standard of competence and are subject to some control by the relevant professional bodies. The appointment and the regulation of managing agents could be provided for under clause 132 of the Bill, which allows the Minister to make regulations for carrying out the provisions and purposes of the Bill.

Fourthly, responsibility of the MC to maintain windows. Under clause 28(1)(iv), the Bill specifically places the onus of properly maintaining and upkeeping windows where a side of the window is part of the common property, ie, part of the external wall, on the MC. However, there ought to be a distinction in liabilities between windows installed on external walls which can be opened, and those which are fixed, such as curtain walling. In the case of windows installed on

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external walls and which can be opened, I am of the opinion that the MC should not be held responsible for their maintenance. Instead, the individual owners or subsidiary proprietors should be responsible for maintaining such windows, since he has access to and controls the use of the windows, not the MC.

Indeed, this will then be in line with HDB's current stated policy that HDB flat owners are responsible for maintaining their windows. Otherwise, as the Bill now stands, external windows are defined as common property. Hence, the onus of maintaining these windows will not rest on the individual HDB flat owners but the MA which, in this case, would be the town council. The MC should only be responsible for maintaining fixed external windows, such as curtain walling, where it would not be practical for the subsidiary proprietors to engage specialist contractors to clean the windows, eg, a gondola system may be required.

However, there is then this vexing issue and dilemma regarding the need to consider third-party liability in the event of falling windows. While MCs should not be held responsible for external windows which can be opened and are essentially controlled by the owners, MCs are in a better financial position to purchase third-party insurance, unlike subsidiary proprietors. In such instances, should the MC take up third-party liability insurance on behalf of the subsidiary proprietors? How then would the cost of this third-party liability insurance be apportioned and/or recovered? There is thus clearly a need to further explore these issues and provisions.

Additionally, it is noted that while the Bill specifically spells out the duty to maintain and upkeep windows and other common property, there is no specific provision as regards the penalty for failure to properly maintain such property, which could lead to damage, injury or death.

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With the recent concern over falling windows as well as the continuing concern over killer-litter from high-rise flats, should not the Minister consider including provisions in the Bill on the responsibilities of the appropriate parties to properly maintain and upkeep property, and their liabilities for failure to do so?

Lastly, jurisdiction of the Strata Titles Board (STB). The types of disputes which the STB has jurisdiction over are limited to those spelt out under clauses 100 to 113 of the Bill. Disputes which are not covered under these clauses would have to be settled via the courts, which can be time-consuming and very costly. It is thus proposed that the STB's jurisdiction be widened to deal with conflicts relating to management and operation, so that parties need not resort to court proceedings. For instance, the Bill does not provide for the Commissioner of Buildings to approve the demarcation of boundaries for the limited common properties. Hence, disputes over boundaries between the main MC and sub-MCs or even between sub-MCs would have to be resolved via the courts. It would be more efficient if such disputes can be adjudicated by the Strata Titles Board. The STB could also be given the powers to adjudicate on operational conflicts between the main MC and the sub-MCs.

In conclusion, I wish to acknowledge that the amendments proposed in the Bill have been the culmination of extensive discussions and feedback with various stakeholders, including SISV, which is the institute I represent. These amendments, when adopted, will definitely make the legislation governing the maintenance and management of strata-title developments more relevant and effective, and overcome many of the shortcomings and loopholes of the present legislation. However, further refinements, such as those I have highlighted amongst many others, are needed to make sure that the Bill takes into account all relevant

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concerns and issues, and ensure its robustness when implemented.

As this is an important piece of legislation that will affect the more than 170,000 owners of private apartments and condominiums and other developments, as well as many more future property owners, I therefore propose that this Bill be committed to a Select Committee of Parliament to receive further feedback from individuals, managing agents and professionals, as was the case for the 1987 major revamp of the LTSA.

As the Minister of State for National Development, Dr Vivian Balakrishnan, noted, "The issues in the review of the LTSA and BCPA can be complex and involve many stakeholders. It is important that all stakeholders are consulted and that the proposed changes be thoroughly considered from all perspectives." If past practices are anything to go by, it could be well another 10 to 20 years before this legislation is reviewed again. Hence, I urge the Minister to put this Bill to a Select Committee to allow all stakeholders to submit their views for careful consideration.

Sir, with this, I support the Bill.

Mr Low Thia Khiang: Mr Speaker, Sir, I believe that this Bill will result in more effective management of buildings and will improve the quality of management in strata title properties. The Bill also attempts to resolve the conflict between owners of residential units and owners of commercial properties in a mixed development. Sir, I have some specific issues which I hope the Minister will clarify.

Clause 75. By virtue of this clause, it seems that the subsidiary management corporation and limited common property will only apply to new developments. But the Minister may publish in the Gazette to extend the application of this division to other developments. The Minister had

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earlier explained the reason, and I think it is wise to apply to only new developments for the time being. But I would like to know under what circumstances the Minister will decide whether or not to extend this division to existing developments, and whether there is a timeframe in which this division will be extended to all existing developments.

Clause 79(4) requires "At least one member of the executive committee of a subsidiary management corporation to be a member of the council of the management corporation." I want to know what is the role of this sole member of the council who sits on the executive committee of the subsidiary management corporation. This person's role, duties and powers are not spelt out in the Bill. Would there be legal complications, since the subsidiary management corporation by itself has its own legal status?

Clause 81(1) states that "A management corporation's by-laws shall apply to the limited common property", but the subsidiary management corporation can make amendments. This seems more like adding to the conflict of interests than resolving them. One can make by-laws, but the other can amend them in relation to the limited common property. So, what is the intended objective of this clause?

Under the First Schedule, paragraph 3, on quorum of general meeting, it was stated that a quorum shall consist of either 100 subsidiary proprietors or 30% of the aggregate share values of all lots, whichever is lower. I wonder why specify the number of "100 subsidiary proprietors" instead of saying that the 30% requirement is applicable to all. In a large development, 100 subsidiary proprietors could be just 10% of the aggregate share values of all lots. Does the Minister deem this sufficient to form a quorum?

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Sir, what this Bill seeks to resolve is the conflict in estate management between residential and commercial lots in a mixed development. We must also bear in mind that, in practice, there are many things that may not be divided so clearly between the management corporation and the subsidiary management corporation. Driveway access may be common to both. Other services, such as water supply pipes and electrical main switchboards may not be so easily divisible. In an economic sense, there are things which, when divided, will cost more to maintain. For example, external facade cleaning may be more expensive if done separately, and accessibility will involve more cooperation and coordination, since there are now two separate bodies, ie, the management corporation and subsidiary management corporation. What would be the implications when one portion of the development is well maintained while the other part is mediocre?

Singapore will probably see more mixed developments, as the URA sells more white sites, such as the development of the new Downtown and with the "Work, Live and Play" planning objective. This Bill is timely to ensure that the commercial part of an upmarket development stays vibrant and is able to cope with fast-changing retail market circumstances. I think it will also help to preserve the value of commercial properties in a mixed development.

Sir, I support the Bill.

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.20 pm.

Sitting accordingly suspended

at 4.00 pm until 4.20 pm.

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Sitting resumed at 4.20 pm

[Mr Speaker in the Chair]

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BUILDING MAINTENANCE AND MANAGEMENT BILL: Debate resumed.

Mdm Cynthia Phua: Mr Speaker, Sir, thank you for allowing me to speak on this Bill.

Firstly, I would like to congratulate the Ministry of National Development for taking the bold step to review many of the issues arising from the management of mixed development strata properties. There are three areas which I wish to highlight.

First, effective use of the two-tier system. The two-tier MC system will only be offered to new mixed use strata developments as an alternative option to a single MC system. This option will not be offered to existing mixed use strata developments so as to allow time for MND to assess the effectiveness of the new system and then apply retrospectively to the existing developments. Singapore is already a built environment and there are many existing mixed developments. The amendments arise because of feedback of real issues on the ground, and hence the review.

I would like the Ministry to put these recommendations to a Select Committee. This will enable the amendments in the Bill to be extensively consulted and discussed to ensure the relevance of the amendments in the actual management of the MCs.

Secondly, I would like to urge the Ministry to consider implementing this two-tier MC system not only to new mixed developments, but also to selected existing mixed developments. This would enable the review to be made at a faster pace. For any new development, it takes

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about two years before the development forms its first MC to allow the two-tier system to work. It takes another few years for the MND to assess the effectiveness of this two-tier system. This would stretch the review to at least to 4-5 years before any effective review can be done. Even after the review, it takes perhaps one or two years for the Ministry to make its decision. This would end up in a really long wait for the existing mixed development MCs which had already been waiting for a long, long time for a review of these Acts so that they could manage effectively.

If the two-tier system could be allowed to be implemented in some of the newly registered MCs of the mixed development, that is, developments that have been handed over by the developers to the MCs, the review of the two-tier MC system could be made faster and many of the issues arising from the existing mixed developments could be resolved, and the mixed developments can be better and effectively managed.

Second, more equitable sharing of the maintenance contribution in mixed use developments. Under the two-tier system, the developer is allowed to set up a main MC with several subsidiary MCs. All the unit owners of the development will be members of the main MC, which will be responsible for managing only the common property shared by all the unit owners. Examples quoted were the driveways and car parks. My contention is with the car parks. The car parks should not be classified as a common property of the main MC. Many mixed developments already have a separate designated car park for each of the different users. By classifying the car park as a common property of the main MC will not resolve the conflicting interest that many MCs face today. Let me give you an example.

The residents from the residential units would like to have the least visitor lots in the car

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park, firstly, for ease of parking by residents and, secondly, for less maintenance requirements. However, for the commercial lessees, the car park is essential to the attraction of customers for the commercial units. It means business for the commerical units and this will translate into higher rentals for the commercial units as well. In deciding for the use of the car park and the charges, this is always in dispute and has always ended up with the decision made by the residents, rather than by the commercial lessees, in view of the majority of respresentations.

Many of the mixed developments have car park charges that are high and deter shoppers from patronising the commercial shops. Let me show you the sensitivities of the car park charges. We know how popular the IMM shopping centre in Jurong is because of the free car park facilities. We heard recently that when the new owner took over and decided to charge customers for the use of the car park, because he wanted additional revenue, the number of customers fell tremendously. And as a result, the car park was reverted to free parking the next day.

The Ministry should consider the car park as a limited common property, intended for the exclusive use of the user group. This would allow the correct user group to decide on the charges and the need of the car park spaces. If, for the older development, where the car park is shared, the quantum of the car park lots for the regular users could be logically determined and sub-divided and classified as a limited common property under each of the sub MC.

Third, the relationships between the main MC and sub-MCs, the roles and responsibilities of the sub-MCs and in relation to the MCs, the main MC and vice versa. This is not clearly defined in the amendment Bill. Issues such as, if there is

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an inefficient sub-MC resulting in a deficit in the sub-MC's funds or vice versa, how would this affect the main MC? If one of the sub-MCs did not efficiently and effectively manage the common property, resulting in deterioration in the maintenance or management of the mixed development as a whole, what is the role of the main MC or vice versa, the sub-MC then? If one of the sub-MCs has committed offences under the Act, what is the role of the main MC? Would the main MC be responsible for the acts of the sub-MCs or vice versa? Finally, would the decisions made by the main MC need to be adopted by the sub-MCs or vice versa?

This feedback is for the Ministry's consideration. I support the review of the Acts and wish to request the Ministry to commit the Bill to a Select Committee of Parliament for further deliberations. These amendments in the Bill concern many buildings and developments, including implications on the management and maintenance of HDB flats by the Town Councils, as the Town Councils Act was originated based on these two Acts, ie, the Land Titles (Strata) Act and the Buildings and Common Property (Maintenance and Management) Act.

Secondly, I share the concern of my parliamentary colleagues here that there should be a provision in the Bill to prosecute persons responsible for killer-litter, for example, falling windows and hanging flower pots which are still prevalent despite the many joint efforts by HDB and related agencies. This is most important and critical, as this is the review of the Building Maintenance and Management Bill for buildings.

Mr Othman Haron Eusofe (Marine Parade): Mr Speaker, Sir, I rise to support the Bill.

Sir, the Buildings and Common Property (Maintenance and Management)

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Act (BCPA) and the Land Titles (Strata) Act (LTSA) were last amended in 1987. Sir, I support the changes to be introduced in the new Building Maintenance and Management Bill, as well as the LTSA which are now required to ensure that we meet current needs to provide higher standards of maintenance and management of condominiums and other strata title developments. There is also the need to improve the clarity of existing provisions in the two Acts.

Mr Speaker, Sir, over the last five years, there was a large increase in the number of condominiums and other strata title developments in my constitutency. And residents in these developments have, from time to time, sought my assistance on problems of poor management and maintenance of the common areas of their development by the developer or the Management Corporations and the Managing Agents they appointed.

Sir, the poor maintenance includes such things like unkempt grounds, mosquito nuisance, poorly maintained car parks, cracks and defects in certain parts of the buildings, leakages in the roof and so on. This led to disputes between the residents

and the developer and management corporation which sometimes became very protracted. The Commissioner of Buildings has been very helpful to help resolve some of these disputes. Now, with the changes in the Act, the Management Corporation should be better empowered to take decisions to deal with these issues. Sir, I hope that with the improvements in the clarity of the existing provisions as well as the introduction of new provisions which would provide clearer definition on the roles of developers, Management Corporations (MCs), Managing Agents (MAs) as well as the owners or occupiers of residences in condominiums and other strata title developments, the problems and disputes can be more expeditiously resolved.

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However, the MCs and MAs would have to improve their management and decision-making capacity, and they would also have to strengthen the community spirit in their developments.

Sir, I agree with my colleagues that Managing Agents would have to be accredited and that they should have at least minimum qualifications to manage properties.

Sir, I welcome the proposal to amend the LTSA to introduce an option of a 2-tier Management Corporation system for mixed-use strata title developments, to provide for more effective management of different parts of the common property. I believe that this will help to prevent disputes between parties in the development arising from the perceptions or misperceptions of one party or group in the development that the MC is more concerned with the priorities or interests of only one group at the expense of the other. Although this will be limited to new developments, the Minister has said that with experience gained in the implementation of the system, it could be later applied to existing developments.

As this Bill would be of interest to owners of units in the condominiums and other strata title developments, MCs, MAs and developers, I agree that we should give them the opportunity to provide their views, feedback and proposals on the Bill. So, I support the proposal that the Bill be committed to a Select Committee.

Sir, we should have safeguards that the common property and grounds of the condominiums and other high-rise strata title developments are safe, healthy and hygienic. This would be the case if the owners of the units in the developments take great care to maintain high standards of maintenance of their units and other premises in the buildings. For instance, as Members have mentioned, in view of the recent spate of falling windows and other

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killer litter, we should consider a provision in the Bill to enable quick prosecution action against owners who fail to maintain their properties. After all, this is a Bill to provide for better management and maintenance of buildings. Would the Minister consider this proposal?

Sir, on this note, I support the Bill.

Mrs Fang Ai Lian (Nominated Member): Mr Speaker, Sir, I would like to support the Building Maintenance and Management Bill.

Obviously, a lot of work has gone into it. That is why it is such a thick Bill. This Bill is all about improving the efficiency of building management. It is also about allowing private individuals to have much greater freedom in the management of their own affairs with minimal Government intervention.

It is a very timely recognition of the vast changes that have taken place in terms of our residential landscape, as has already been said that there has been a huge increase in terms of condominiums and also other shared housing developments. And now we are looking at technology parks which will combine factories and other residential as well as recreational facilities. So, as more and more Singaporeans get affected by laws governing such developments, it is timely to refresh the laws and to update them so that it can be made much easier and much more pleasant for people to live and to work together.

Sir, the Bill seeks to give much more authority to management corporations. It is good to see that they will have the ability to reformulate maintenance contributions, to have the ability to erect and alter structures and also have the ability to grant exclusive use or rental of common property.

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The Bill also seeks to decriminalise minor offences, and this is a positive step in the right direction. Because if you want to give more responsibility to people, then it is right that the law should not come down too harshly on them if they commit minor transgressions. But, of course, the option for the aggrieved party to take such people to court is always there, although now it does not become the duty for the State.

Quite apart from self-regulation and self-governance, this Bill seeks to enhance the effectiveness and efficiency of management corporations. A more significant change, as has been said, is that of having 2-tier management corporations to recognise the mixed-use developments which we are now accustomed to in a residential versus commercial development. And this approach is in line with practices that have taken place elsewhere, and so it is a logical step towards addressing issues pertaining to conflicting interests because we have different groups of people. I should also add - this has also been brought up - that even among different groups of commercial occupants, it would be worth our while and advantageous for them to also have separate tiers of management corporations.

When people live together or work together, invariably, conflicts are bound to arise. In the case of residents having to cope with shopowners, they have diametrically opposite views. One would like, of course, privacy. The other would like bustling crowds. One would like security. The other would like unlimited access. So, this approach towards having a 2-tier, or even 3-tier management corporation, will seek to address some of these issues. It will not address all issues entirely, but it would give greater flexibility to groups of people to manage their affairs better.

I think it has to be recognised that no one system can ever be perfect. And

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although a multi-tier system will better address or cater to the differing needs of people, it will not be perfect. There will be problems and there will always be conflicts and sub-committees may well engage themselves in court, but let it be. Let there be flexibility and let there be greater ability for different groups of people to better manage their differing needs.

When we call for more management corporations, it will also mean that we need more people to get involved. And given the generally high level of apathy, the question is whether we will be able to get enough people. But I think this is one challenge that Singaporeans ought to rise up to. Dwellers of condominiums are generally richer. They are usually much more successful in business. They are more successful in their careers. These are the very people we would like to encourage to step forward and contribute to their community. So, their immediate neighbourhood is perhaps a good place to start with, and these people can really help to resolve conflicts which are bound to arise when people live together and share common facilities.

These problems are not exactly unique to Singaporeans. I read in a recent article that in Britain, the one thing that people complain most about is their neighbours. So, in these days, it is not so easy to live with one another, and we wish that we could all have the kampong spirit back, but we do not really wish to go back and live in a kampong. So, if gifted people can step forward and offer themselves in order to develop a more peaceful, a more caring and a more comfortable environment, I think we have a chance of reviving that kampong spirit.

The Bill also seeks to bring about a much higher level of determining strata title and yet, at the same time, it also gives enough protection for minorities as well. With more freedom given to

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management corporations, it is also hoped that management corporations would go beyond just managing premises and would also bring about the development of community spirit. We talk about how to cope with infant care, how to cope with after-school care, how to cope with elder care and so on. If management corporations can extend themselves beyond just looking after premises, I think we have a good chance of also developing the community spirit, which Dr Teo Ho Pin talked about earlier on.

The Bill also seeks to equip management corporations with authority and to get things done. As I look through the provisions, consensus of approval is still required. A very high level of majority approval is still required. We talk about 90%, we talk about 75% and so on. These are still clearly very super majorities which, in this day and age, is very hard to attain. As many Members have asked for this Bill to be committed to a Select Committee, I wonder whether this super majority should also be reviewed because it is clearly not achievable and perhaps unrealistic too.

Sir, I would like to say that it is a good Bill, and we should all try to make it work. When we talk about self-governance and self-regulation and we have apprehensions about it, I think we ought to rise to the challenge. It is no use saying that we lack awareness and we lack experience, because it is really up to Singaporeans, at the end of the day, to make the society which we hope we like to belong to.

In summary, I would like to say that, at the end of the day, it is a matter of choice. If we choose to live in condominiums, if we choose to live and work in mixed developments, then we have to understand the limitations that come with it, and there is a clear need to compromise. The law can only provide for provisions and guidelines as to how everybody can live and work happily toge

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ther and therefore efforts made to make the laws much more flexible as well as to get people more fully involved in the management of their own affairs are clearly welcome.

The other point is that the Bill also seeks to set general guidelines as to the type of people who should be on management committees. I think it is very crucial that we get the right people on management committees and therefore whilst the law can make provisions as to who can be left out and considered unsuitable to represent the constituents, it is more important for residents to choose with care who should be on management committees and able people should step forward and offer their services to serve their residents.

Sir, on that note, I support the Bill.

Mr Ang Mong Seng (Hong Kah): ( In Mandarin ): Mr Speaker, Sir, I support the Bill which seeks to merge the Land Titles (Strata) Act and the Buildings and Common Property (Maintenance and Management) Act, which is to be administered by the Ministry of National Development (MND). I think it is a very wise move. MND has rich experience in building and maintaining public housing. This Bill will enable the MND to have good and proper management over private properties as well.

The new Bill will also deal with arrears of management fees and the other problems. It will decriminalise such acts of violation and breaches of the rules. Under the Bill, these cases will be dealt with by the management corporation, which will decide whether it would institute civil actions against the offenders. The management corporation will have more space for consultation and negotiation between the subsidiary proprietors and the other parties. For example, the

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management corporation may waive some of the management fees owing by subsidiary proprietors on ground of financial hardship, or allow them to pay the arrears by instalments, so as to avoid facing criminal sanctions. In this way, the management corporation will be in a better position to communicate with the subsidiary proprietors, and resolve their problems in a more humane manner, thereby creating a better and cordial living environment for all.

Thirdly, the new Bill also provides for the developer to pay the management fees of the unsold units to the management corporation. I think this is reasonable. At the moment, this is being practised in the public housing sector. When the Housing and Development Board has sold a block of flats, it shall be responsible for the payment of maintenance fees of any unsold units to the Town Council, and continues to do so until such time when the units are sold. Thereafter, the new owners will take over the payment of the S&CC. Under this system, the Town Council will have sufficient funds to manage and maintain the buildings and the common property, thereby providing a better living environment for all the residents. This Bill brings the private housing estates in line with the present system of the HDB estates, thereby ensuring a better living environment for their residents. .

Fourthly, under this new Bill, all those who are in arrears of the maintenance fees will not be eligible to stand for election as members of the management corporation. This is very logical. As a member of the management corporation, the subsidiary proprietor concerned should set a good example, so that the other subsidiary proprietors will emulate. If the management committee members themselves are in arrears, and yet they are holding important positions in the management corporation, this will send a wrong signal to the others, and it will not

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be easy for them to implement their policies and execute their duties. So, under this new provision, those who are in arrears will not be eligible to stand for election in the management corporation. I think it is very logical.

Fifthly, the managing agents should not go around collecting the proxies from the subsidiary proprietors for the general meetings. The managing agents' main duty is to help the management corporation look after the estate, using their professional expertise. They should look into the daily maintenance, accounting and other administrative work. They have no part to play in the election of management corporation members, nor shall they be involved in the canvassing or campaigning for votes for any particular group of candidates. I think this is a very good provision under this Bill.

Sixthly, under this Bill, there will be provision for two-tier management corporations. I have some reservation about this. In order to resolve some of the problems and disputes in multi-purpose property, I think this two-tier management corporation may not be the ideal way to settle these problems. In fact, the establishment of more sub-MCs will also give rise to more conflicts of interest and disputes. If the dispute arises because of money, I think we should look at it from the monetary aspect. Maybe we should import the concept of the Town Councils, ie, we set up just one management corporation, but we can have separate accounts for the various sub-groups. At the moment, Town Councils have to look after a great number of HDB flats as well as common property. There may be the Town Centre, the Neighbourhood Centre, the car park and the various maintenance work. The Town Councils set up different accounts for each aspect of their work, eg, one for car parks, one for landscaping, one for general cleaning, etc. This is quite similar to that undertaken by the manage

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ment corporation of the private condominiums.

In the Town Council, our system has been working well. There has not been any dispute over these accounts. When the conservancy charges are received, they will be allocated to the various accounts for their specific purpose. So, as far as the accounts are concerned, they are very clearly divided. If the Town Council wants to do any maintenance work, it will just look into the financial situation in the respective accounts, and then plan the budget accordingly. This is very effective and transparent. I am sure this same method can be applied to the private condominiums. I think the management corporations can make a study of the system in the Town Councils - to set up separate accounts, rather than having sub-MCs. Otherwise, even if there are many sub-MCs, it will not be able to solve the matters. I think they will only complicate matters and give rise to more disputes. I hope that the Minister will consider my suggestion.

Mr Mah Bow Tan: Mr Speaker, Sir, first of all, let me thank all the Members who have spoken for their support of the Bill and for their very comprehensive and detailed comments.

As I mentioned in my Second Reading speech, we have had extensive consultations with members of the public, industry stakeholders, and members of the GPC for National Development. But I accept that this Bill is highly technical and the issues are very complex. In fact, the Bill itself runs to more than 200 pages. The provisions of this Bill have a far-reaching impact on many people in Singapore, not just those who live in strata title units, condominiums, etc. There are some 170,000 of these households and they form a significant proportion ˆ’ something like 15% ˆ’ of the total number of households or dwelling units in Singapore. Apart from that, there are also the management

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corporations (2,700 of them). There are the managing agents who have been hired by the management corporations to look after these units, and so on and so forth. So there are many stakeholders involved in this issue. Therefore, I agree with Members ˆ’ Dr Teo Ho Pin, Dr Amy Khor, Mr Othman Haron Eusofe, Mdm Cynthia Phua, and other Members ˆ’ that we refer this Bill to a Select Committee. This will allow the Bill to be more thoroughly scrutinised, and all relevant views, and views which have not yet been heard, can be so heard before it is finalised and enacted.

Sir, since the Bill is going to a Select Committee, I will not address all the points that have been raised by the Members, especially some of the more technical ones. But I will respond very briefly to some of them, before I touch on the more general intent behind the proposed amendments in the Bill.

Dr Teo Ho Pin mentioned the various kinds of documents, what kind of documents as well as how many documents to hand over to the MCs. I think this is something the Select Committee can consider and discuss. He also asked how we allocate share values, and also what is the code of practice for managing agents. These are issues which I hope members of the public as well as members of the industry will raise.

Dr Amy Khor asked under what circumstances we allow sub-MCs for new as well as existing developments. Again, as I have explained, we would like to start off with the new developments, because I do not think this is a totally trouble-free proposal, and I expect that there will be problems associated with creating another level of management corporation in mixed developments. Will they be in conflict? How will they delineate common property, and so on and so forth? So, I think it is wise for us to implement it first for new

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developments and to learn from this experience and after a while, to then apply it to existing developments, if they wish to opt for it. This is a more cautious approach. Yet, at the same time, the Bill also allows the Minister to approve existing developments which so wish to have multi-tier MCs under certain circumstances. These circumstances are many and, again, I would suggest the Member can raise these at the Select Committee hearing, and we can go into it in greater detail.

She also asked, why so many resolutions? She counted six resolutions in all. In fact, this was a result of some feedback from the industry that, depending on the issue concerned, we need to have different levels of consensus. The more serious the issue, obviously the higher the level of consensus required. And I think this is a reasonable proposition. But, again, let us discuss this at the Select Committee.

She mentioned another significant point, which is windows. Yes, it is correct that windows are currently considered to be part of common property. Dr Khor proposed that we should now make a distinction between those windows that can be opened and consider those windows to be the responsibility of subsidiary proprietors, and to make the fixed windows, such as curtain walls, the responsibility of management corporations. I think this is a good suggestion. But I think I should bring to her attention the fact that this decision to make windows part of common property was taken at the last Select Committee hearing in 1987 when the last major review of the Land Titles (Strata) Act was undertaken.

And, in fact, this decision was made at the request of MCs of the SISV, as well as the Law Society, for I believe, aesthetic reasons, to make sure that the subsidiary proprietors do not change the windows. But I think times have changed and it is timely for us to relook at this provision. So, I

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would like to thank her for this suggestion.

The other point she made was whether we can widen the mandate or the ability of the Strata Titles Board to deal with different types of conflicts. I believe we can consider this, to widen the jurisdiction of the Strata Titles Board. But I would like to allow representations from the industry before we do this.

Mr Low Thia Khiang asked several very specific questions. I hope that these questions can be raised at the Select Committee. But I thought I should respond to a few of them. For example, why do we require a quorum of only 100 SPs? Why so few? Does it mean that the issue at hand is not so important? No. The answer is a practical one. This is something that has been fed back to us which is that, for many large developments, the requirement to have 30% of SPs present to form a quorum is not very easy to achieve. In fact, say, for large developments of 1,000 units or more, 30% is equivalent to 300 SPs, and many a time, they find it very difficult to gather these 300 SPs. And this is the reason why, in the spirit of making it easier for AGMs to be convened, the quorum has been reduced to either a minimum of 100 SPs or 30%. But these are not hard and fast numbers. The industry has made this suggestion. There has been a consensus so far, but let us leave this for discussion at the Select Committee.

Mdm Cynthia Phua made the same point about whether we should implement, not just for new developments but also for existing developments, the idea of a two-tier MC. I have the same response I gave to Dr Amy Khor just now - let us start off with the new developments, learn from the experience and then, if necessary, we can transfer the experience and the lessons learned and extend it to existing developments subsequently.

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Sir, let me now touch on the general intent behind the proposed amendments in this Bill. In putting forth this Bill, we recognise, as I have explained earlier, that we do not have a long history of strata title or managing strata developments. We enacted the LTSA only in 1967. This was 37 years ago. Then, the last major amendment to the LTSA was made in 1987, almost two decades ago. Since then, the number of strata units and the number of MCs, which already formed a significant percentage of total dwelling units, have grown and will continue to grow in the years to come. So the legislation needs further amendments to provide for more effective management of strata developments and to recognise that, with more mixed-use developments, there will be more differentiation of interests. There will be different interest groups within a particular development. And this is the reason why we introduce this option, and I stress the word, it is an "option" of a two-tier MC system. We can then provide flexibility to MCs to make decisions on common properties, on the one hand, that are used by everybody and also limited common properties that are used by specific groups.

I stress that there is no intention to segregate groups within the strata development, a concern that was raised by Mr Ang Mong Seng. The interactions between the different groups can still be facilitated within this two-tier system through the main MC. The reason why we went through this exercise was because there has been a significant amount of feedback concerning the problems of mixed-use developments where you have got disputes between MCs, you have got management problems and, basically, many of these complaints relate to the governance of the MCs. So what we must do fundamentally is to recognise that the MC is the supreme decision-making body in the strata development which has been elected by the SPs to take charge of their well-being but, at the same time, we also

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recognise that there are different interest groups. So it makes sense to empower the MCs to decide on issues related to the estates for the benefit of the subsidiary proprietors.

I agree with the sentiments expressed by Members that the legislation should strive to enhance and strengthen the community spirit among the SPs. I think the point that was made very strongly by Dr Teo Ho Pin. I hope Members would agree with me, however, that this community spirit, like attitude change, like mindset change, cannot be legislated. This is the sentiment behind what Mrs Fang Ai Lian was talking about - getting more people to be involved.

Strata developments are founded on the concept of community living - community living with shared ownership of common property and individual ownership of their own unit, their strata title. So, with this concept, community living must require of each resident a certain amount of give and take and it must require of each resident, of each subsidiary proprietor, a knowledge of what are his legal rights and responsibilities, what are his duties and liabilities. The legislation can only create a framework, one, which I have explained, will be based on self-governance and a clear definition of the demarcation of responsibilities among the different stakeholders. So, hopefully, this framework, together with a large dose of the give and take, will create and foster this conducive environment for various parties to work together to resolve issues and to do something for the common good of the community. To achieve this goal, SPs as well as other stakeholders will have to take on more responsibilities and they will have to exercise these responsibilities fairly and wisely within this framework of greater self-governance. And that is the reason why we have decided that we will

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decriminalise many of the offences, those offences that will not generally affect public interest, and to reduce the extent of Government involvement.

Here, I would agree with Mrs Fang Ai Lian that we should encourage strata title owners to be more aware of their rights and responsibilities of ownership to come forward and to get involved. I know it is very difficult to do so. Many condominium MCs have difficulty in getting people to come forward to serve. But it is their own property that they are being asked to manage. And if they abdicate this responsibility, they do not exercise those responsbilities, then the danger is that those who do come forward may actually do something that they may not agree with ultimately, and then it is too late for them to complain. Nevertheless, I would ask the BCA, together with the industry associations like SISV, and so on, to take steps to educate owners, MCs, SPs, MAs, about how the changes in the Act will affect them.

Talking about managing agents (MAs), I would agree with Dr Teo, Dr Amy Khor and others that there must be greater professionalism among the managing agents. Here, again, I come back to my point, Government can only provide the overall framework and we can facilitate the professional development of MAs. But the industry itself has to take the lead in this. And the issue of whether to legislate and, if so, to what extent, we can discuss this at the Select Committee. But I note that there are plans by industry associations, like the SISV, to accredit MAs in Singapore to help raise the standard of professionalism in the management of strata developments. I believe this is a step in the right direction, and I would support this.

Sir, I also share the views and the concerns of Members, like Mr Othman Haron Eusofe and Dr Teo Ho Pin, that we must do something about the mainte

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nance culture in Singapore. There is, I believe, not a strong culture of awareness of maintenance in Singapore. If Members would recall recently, BCA had to enact legislation to make it compulsory for building owners and individual households to fit or refit the airconditioners in high-rise buildings. Then we had the problem of falling windows. I cannot emphasise enough the dangers that are posed by dislodged windows, falling airconditioners, tiles, or any other external parts of buildings, particularly in our predominantly high-rise developments. And this matter needs to be taken seriously because lives are at stake. So owners must assume responsibility for building maintenance.

When I last spoke about the issue of falling windows in this House, I mentioned that we would be looking at ways to mitigate this issue. We have two choices. We can continue with public education alone, or we can strengthen the legislation to inculcate a strong maintenance culture. Or we can preferably do both. In this way, we reduce the dangers to the public of objects falling down from high-rise buildings, whether they are private or HDB flats. I suggest, again, that this matter be deliberated at the Select Committee, and we will consider introducing appropriate provisions in the Bill to prosecute owners who allow their fittings to fall and endanger the public, as has been suggested by several Members.

I had also announced previously that BCA would be considering legislating the mandatory periodic inspections of windows. Having carefully considered the public and industry feedback on the subject, I wish to say that BCA will not proceed with the mandatory window inspection proposal at least for the time being. However, BCA will work towards introducing legislative changes to ensure safety standards upstream concerning the design, installation and retrofitting of windows, and this will involve separate

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amendments to another Act, namely, the Building Control Act and Regulations.

Sir, once again, I thank Members for their very detailed inputs and I look forward to discussing this further at the Select Committee.

Question put, and agreed to.

Resolved,

"That the Bill be committed to a Select Committee consisting of Mr Speaker as Chairman and the following Members:

Assoc. Prof. Koo Tsai Kee

Mr Zainul Abidin Rasheed

Dr Teo Ho Pin

Mr Low Thia Khiang

Ms Indranee Rajah

Mdm Cynthia Phua

Mrs Fang Ai Lian

and Mr Mah Bow Tan." - [Mr Mah Bow Tan].