Source: https://blog.burgielaw.com/2016/11/26/jmbs-mcs-part-8-the-jmc-ought-to-be-remunerated/
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JMBs & MCs Part 8: The JMC ought to be remunerated - BurgieLaw Blog
Posted on November 26, 2016 in Our Lawyers
JMBs & MCs Part 8: The JMC ought to be remunerated
My previous articles set out the obligations and liabilities of each JMC or MC members which includes a fine of RM250,000.00 or imprisonment or both. This usually prompts an immediate reaction to effect sufficient insurance coverage to insure against all risks including defamation, omission and negligence.
Insurance is mandatory and riders are optional. I often advise my clients to take up the additional riders since the members are usually not too involved with operation. Inactions or omissions of the managing agent may be imputed on the JMC or MC members exposing themselves to liability.
A live example is if a managing agent has not followed the instructions of the JMB / MC and fails to maintain a register containing:
(a) the allocated share units;
(b) floor area
(c) name and address of parcel owners;
(d) name and address of the solicitor acting for parcel owners
pursuant to Section 30 SMA, each and every member of the JMC commits an offence and on conviction be liable to a fine not exceeding RM10,000.00 or to imprisonment for a term not exceeding 3 years or both.
Why should they be remunerated?
Apart from effecting sufficient insurance to manage liabilities of each member, the other way is maybe to allow the JMC / MC members to be compensated reasonably just like how a director of a company will similarly be remunerated.
Let us not forget that a lot of the members have a full time job and work for a living just like you and me. Volunteering their services to the JMB or MC requires a lot of time going through tons of documents, signing of contracts, attending the main JMC / MC meetings and other sub-committee meetings. In fact the some of the meetings I have attended lasted from 6pm to 12am. In addition to that, a JMB / MC of a commercial building is required to look for sponsors and other retailers to rent the common area or advertisement spots to increase the revenue of the maintenance account. In Solaris Dutamas Management Corporation, the media sub-committee in fact has worked hard and managed to generate a revenue of more than RM120,000.00 a month for the benefit of all proprietors.
Apart from their heavy workload, and onerous liabilities, they are required to perform their statutory obligations set out in SMA and manage the balance sheet ensuring the JMB/MC is sufficient to stay afloat. A member of the JMC or MC also must be a good relationship manager because he/she will be required to sign off notices of demand against defaulters who are likely to be their own neighbours. Being part of the decision making process also attract much criticism from the aggrieved parties at times.
Does the law allow for such remuneration?
The answer is affirmative in both the old and new law.
Building and Common Property (Management & Maintenance) Act 2008
In the First schedule referred to in Section 11(4), it states:
subject to the proposed resolution by the Committee in subparagraph (1), the following matters shall be agreed by the Body in the general meeting as provided under subsection 11(1) Act 663:
the selection and appointment of agent/contractor/ panel of insurance;
limitation on expenses in respect of Building Maintenance Fund permitted by the Body without going through general meeting;
iii. the use of sinking fund;
to make and enforce the house rules;
determination of allowance rate of the committee
After the BCP is repealed, by virtue of Section 23(3)(l) and 50(3)(l) of SMA, the Act now allows for allowance be paid through the maintenance account:
“The maintenance account shall be used solely for the purpose of meeting the actual or expected general or regular expenditure necessary in respect of the following matters:
(l) paying for the allowances and other expenses of the members of the management committee according to such rates as may be approved by the Commissioner”
What is the legal procedure to allow remuneration?
The JMB or MC should discuss at the JMB / MC level at the first instance and see whether they can get consensus to introduce this as an agenda in the general meeting. If there is, this motion can be proposed by the JMB / MC which usually carries more weight and the motion will then be deliberated at the general meeting.
If there is none, a proprietor can introduce it as a private motion to be included in the notice of meeting.
At the general meeting, this proposal will similarly be discussed and voted upon.
If the motion is carried, the decision of the general body will be taken back to the JMB / MC level for implementation. Note however it should not have a retrospective effect and the proposal ought to state clear the commencement date and the terms and conditions of enjoying such allowance / remuneration.
These conditions can be either:
(a) only applies to the main committee meeting; or
(b) only payable to those who were present for a minimum of x hours;
A reasonable sum should be within the region of RM500 – RM1,000.00 per member for each meeting he/she attended.
This article is part of a series: Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7 | Part 8