Inexplicable accusations from a handful of unit owners, discarded by The Haven JMB

An unprecedented case may be emerging from a civil suit undertaken by eight parcel condominium unit owners against the joint management body (JMB), the project owner and developer of a high rise living project.

The case revolves around a suit filed in 2020 by eight individual buyers of the Haven Lakeside Residences in Ipoh with a recent High Court ruling here that eight respondents named, are liable to repay back RM1.13 million to the sinking fund of the project’s JMB.

But the same court later granted a stay in the ruling pending appeal from the respondents through its developer, the  Singapore – born Peter Chan, who is the chief executive officer (CEO) of the project.

Chan has avowed to fight for his rights, saying that it is a bizarre circumstances that the eight, who represent the minority can outweigh the majority of over 250 JMB members and buyers of the project.

“I felt that we were bullied in this case but I must respect the court decision and have filed an appeal.”

If the higher court upholds the decision of the lower court then it would be a landmark ruling that a minority component of a JMB can overruled the majority.

Offering his take is JMB chairperson Tan Teong Hoe , saying that it is unfortunate that the matter is now a legal matter.

“I think the minority here overlook the benefits accruing to owners as a result of the exercise to use the sinking fund how substantial the amount is.

“These include an extension of the lease tenure by seven years, from the original expiry date of 19 August 2108 to 15 June 2115, as well as a significant enhancement in the overall development value.

“The development value increased by approximately RM41.6 million, from RM546.98 million to RM588.60 million, following the regularisation of an additional 1.67 acres of land, expanding the total land area from 13.62 acres to 15.29 acres,” Tan said.

By comparison, he noted, the additional financial cost to individual owners was marginal, with the average annual quit rent increasing from RM50.19 per unit to RM56.35 per unit, an average increment of RM6.16 per unit.

“In our view, the long-term gains to owners far outweigh the incremental annual cost,” he said.

He noted that the eight had attempted to influence the JMB members during an annual general meeting (AGM), but the majority felt that the use of the fund was reasonable.

Tan emphasised that under the Strata Management Act, sinking funds may be utilised for capital expenditure, legal compliance and title regularisation, subject to proper approval.

Addressing the quantum involved, Tan clarified that the amount assessed by the State during the 2014 title regularization process was RM 946,120, which he stressed was not a purchase price.

This was a statutory land premium imposed by the State to regularize the title of land that had been donated to the JMB and to bring it into compliance with regulatory requirements. The amount was determined by the authorities, not by the developer or the JMB,” he said.

“The use of the sinking fund for the statutory land premium was approved by the JMC and ratified at the JMB’s Annual General Meeting in 2016, and the decision followed procedures expressly allowed by law,” he said, adding that the process was carried out transparently and with members’ knowledge.

The construction of the tennis court was proposed, seconded and approved by the parcel owners themselves, including some of the plaintiffs. 

The suit was filed in 2020 by eight plaintiffs against the JMB and seven other parties, including the developer, the landowner and The Haven (Ipoh) Management Sdn Bhd — a company previously held on trust for the JMB and subsequently de-registered by the JMB after its use.

The plaintiffs sought the return of RM1.13 million, alleging that funds from the JMB’s sinking fund had been used for purposes they disputed, for the payments for the land premium and the construction of a tennis court.

“Could this be a case of governance under siege?” Chan asked. 

“The final outcome of the appeal will have a significant impact on the governance processes of JMBs and Management Corporations nationwide. If sound reasoning does not prevail, it will undermine collective decision-making and lawful governance across strata developments.”

Chan became outspoken when he learnt that there are attempts to interfere with the AGM be held this Sunday, Dec 21.

In their actions, the eight individuals have disrupted the lives of others, said Tan, who also expressed concerns if the property value may erode if their irrational behaviour prevails over time.

What is technically an in house matter, is now spewing in the public eye, said Tan.

Joanne Yu, a JMB member, expressed her gratitude to the court for granting the stay because it allows the operations of The Haven to continue uninterrupted pending the decision. 

The appeal is scheduled to be heard next year and whatever the decision, it is bound to be a precedence for Malaysians living in high rise units.