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What is a Jointly Owned Property?

Jointly Owned Property (also known as Strata Title Property) refers to the sub-division of land and buildings into units and common property. Jointly Owned Property covers buildings such as high-rise apartments, retail developments, office towers, villa communities and industrial buildings. These developments often have shared facilities as well as common property.

What Laws and Regulations apply to Jointly Owned Properties?

The following documents clarify the laws and regulations relating to Jointly Owned Property: Law No. 27 Concerning Ownership of Jointly Owned Property. Direction for General Regulation. Direction for Jointly Owned Property Declaration. Direction Association Constitution. Directions for Surveyors.

What is a shared facility?

Examples of shared facilities include such items as hallways, entrance lobbies, swimming pools, tennis courts, golf courses, gymnasiums, elevators, vehicle parking and pathways. All owners within the development contribute to the maintenance and operation of these shared facilities and the common areas by paying money into a General and Reserve Fund that are jointly known as service charges.

What are common areas?

Common areas, which are shown on the site plan in the Jointly Owned Property Declaration are those parts of property designated for common use by unit owners and occupiers and are generally those areas that are not part of an individual unit. The areas may include, but are not limited to: hallways, lobbies, stairwells, lifts and lift wells, roof, driveways, common area car parks (as opposed to Read more.

What is an Owners Association?

All owners collectively within a Jointly Owned Property are referred to as the “Owners Association”. An Owners Association is a separate legal entity from the individual owners just as a company is a separate legal entity from its shareholders.

What is the primary purpose of an Owners Association?

The primary purpose of an Owners Association is to manage, operate and maintain the common property and facilities within the Jointly Owned Property.

How do Owners Associations operate?

An Owners Association operates in the same way as a business. The Owners Association can make rules regarding the use of common property and units that are binding for the Association, unit holders, tenants and visitors. Rules adopted by an Owners Association must not contravene the Jointly Owned Property Law.

What are service charges?

Owners Associations raise funds by levying contributions from all unit holders. These are known as “service charges”. The General Fund is an annual service fee that covers the cost of maintenance, repair and management of the common areas for the budgeted year and includes building insurance, utility services and administration costs. Unit holders must also pay a service charge to the Reserve Fund to provide funds for Read more.

What is unit entitlement and how is it allocated?

The amount that each unit holder contributes to the maintenance funds is calculated according to the ‘unit entitlement’. The unit entitlement is allocated on the basis of the proportionate floor area of a given unit to the total area of all units within the Jointly Owned Property development.

What are the legalities covering service charges?

All unit holders are effectively guarantors for their Owners Associations liabilities. Owners Associations debts are paid for by levying owners and once a levy is approved, by a majority vote of a general assembly, the levy becomes a legally recoverable debt. This debt is payable by the unit owner to the Owners Association and recovery of the debt is enforceable at law if it is not paid Read more.

What are the duties of an Owners Association?

The Owners Association is responsible for ensuring community rules are being followed by residents and ensuring harmony within their community. The Owners Association must appoint an Association manager to perform many of the management and supervisory tasks of the Owners Association.

What is an Owners Association constitution?

An Owners Association constitution defines the functions and powers of the Owners Association and determines how the financial and administrative affairs will be managed. The constitution also determines the processes required to protect the integrity of the common areas and the rights, responsibilities and obligations of owners and tenants. It aims to guarantee the fair and equitable management of the common areas for the peace and quiet Read more.

What are the key roles in an Owners Association?

The key roles involved in an Owners Association include: The Owners who have the right to vote in the meetings of the Owners Association. The Board of Directors (more often referred to as ”the Board”) who are owners elected on a democratic basis by a majority vote of owners on an annual basis at each Annual General Assembly. The role of the Board is clearly defined and Read more.

What is the role of the Board of Directors?

The Owners Association is made up of all the owners or their duly appointed representatives, and is managed by the owners of the building or community under the guidance and direction of the Owners Association Board of Directors (“the Board”). The Board comprises a minimum of five and a maximum of seven members and the developer may not be represented by more than one member on the Read more.

What is the role of the association manager?

The association manager is appointed by the General Assembly and may be an owner acting in a voluntary capacity (that is, the owner receives no remuneration for the role) or a specialist company licensed and registered by RERA. The association manager is an entity with a statutory function to perform the day-to-day running of the administrative, financial and secretarial aspects of the Owners Association, in addition to Read more.

What is the role of the developer?

The property developer constructs the building but has further responsibilities in a Jointly Owned Property development. Upon completion of construction and once all the necessary approvals for the authorities are obtained, the building is then handed over to the owners. The developer has the following responsibilities in relation to a Jointly Owned Property development:   Escrow: The Escrow Law provides that 5% of the property purchasers’ funds Read more.

Which management issues is the Owners Association responsible for?

The Owners Association must manage the following matters: Maintaining essential records: Jointly Owned Property Declaration, community rules, a minute book for recording all Board meetings, a minute book for recording all minutes of general assembly meetings, a file for official government correspondences, insurance policies, the last annual report of the Board, the last report of the Association manager, the last financial statement, a file for copies of Read more.

What is the decision-making process for an Owners Association?

Owners Associations have strict rules and regulations as how to conduct their affairs. The decision-making process is transparent and well-documented in the form of minutes of meetings, which shall detail the voting outcome for motions passed or not passed by the owners. The Agenda Owners discuss at the pre-schedule meeting, topics for discussion and agreement. Each agenda has a clear motion put forth regarding the topic for Read more.

What is involved in buying into a Jointly Owned Property?

Regardless if the property is under construction or it is a completed property, every potential purchaser has the right to know the following information about the Owners Association: The ongoing costs associated with purchasing the property, which includes how much money (service charges) that must be paid for the upkeep, maintenance and management of the common areas, including arrears. Assets and liabilities of the Owners Association. Details Read more.

What is a Reserve Fund?

A Reserve Fund is a fund set up by the Owners Association to cover the costs of known future capital expenses. Examples of the types of items for which Reserve Funds are set aside include matters such as painting and repairing the building structure and replacement of common property items such as lifts and electric motors. All Jointly Owned Properties are required by law to have a Read more.

Who develops the ten-year Reserve Fund plan?

While members of an Owners Association are not prevented from preparing a ten-year Reserve Fund plan themselves, for legal and litigation purposes it is strongly recommended that the Owners Association engage a suitably qualified expert that specialises in the preparation of Reserve Fund plans.

What is the best way to plan a ten-year Reserve Fund plan?

There is a series of steps repeated during each ten-year cycle following the development of the first ten-year plan. First year: The Owners Association appoints an expert to prepare the Reserve Fund plan. The plan must cover ten years from the date of the First Annual General Assembly. Second year: The finalised plan is presented to the owners and is the basis for determining Reserve Fund contributions Read more.

Why do Owners Associations need insurance?

The establishment of the Owners Association creates an unlimited liability for its members, and each member has joint and several liability to the Owners Association. For this reason, the Jointly Owned Property Law requires a certain minimum amount of insurance cover to protect the unit owners. Building insurance Is required to cover the full replacement and reinstatement cost to rebuild the building to its new condition in Read more.




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