STRATA TITLE AND ADMINISTRATIVE FEE

I am in the midst of getting the strata title transferred into my name. However, the developer is charging me administrative charges of RM250.00 per month. Can they do that?

If your property is governed under HDR 1989
If your property is “a housing accommodation” and the sale is governed under the Housing Development (Control & Licensing) Regulations 1989 (“HDR 1989”), then the developer is NOT entitled to charge any administrative fee. This is because Schedule H or G of HDR 1989 provides that the developer shall “at no additional costs and expense to the Purchaser” execute a valid and registrable instrument of transfer (commonly known as the MOT) to the purchaser together with a separate strata title.
If your property is NOT governed under HDR 1989
However, if your property is not governed under the HDR 1989, you would have to check your sale and purchase agreement and see if there is similar clause. If there is no such clause, we are of the view that administrative charges imposed has to satisfy the “reasonability test” imposed by the developer in KAB Corp Sdn Bhd & Anor v Master Platform Sdn Bhd and another appeal [2019] 6 MLJ 752. Although the facts in KAB Corp Sdn Bhd (Supra) relates to administrative fee imposed by developer to sign consent to assign, the law relating to imposition of administrative fees applies with equal force to administrative fee imposed by developer to execute MOT. Administrative fee should not be arbitrary, unreasonable, unfair and oppressive. The requirement of reasonableness is an implied term which has the force of law. It has to consider the work of keeping and updating records by Developer. Keeping in mind that there is a common responsibility of developer to keep those records to uphold the beneficial interest of the buyers. Hence, we are of the view that the nominal administrative fee of RM500 applies in KAB Corp would apply in this instance. The developer should not charge administrative fee of more than RM500.

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