BY YL LUM
Strata titled developments pose great challenges to Malaysian’s civic- mindedness and community living.
As we progress from pure residential strata developments (or single-use strata buildings such as office towers) into mixed ones which include a retail mall component, we reach a level of greater complexity in both design and management.
Even in the context of a simple stand- alone residential flat, the quiet enjoyment of an unit owner depends on the behaviour of the rest of the other unit owners surrounding him at the top, bottom, left, right and opposite.
Unlike terraced houses, proximity and crossing paths with neighbours in every sense are more prominent in high-rise strata living.
Strata living demands every inhabitant to join efforts to upkeep the shared areas, or so called ‘common properties’ and this is usually in the form of paying the individual’s fair share of monetary contribution.
This all sounds logical and in the ideal world, it should all work out fine, but unfortunately in reality, it is otherwise.
There are situations where a unit owner fails to do his own housekeeping and this results in inconvenience or, at worst, damage to other units. For example, when waterproofing fails in the upper unit, the leak causes damage to the unit below. And most of the time, the well-being of the victim unit is entirely at the mercy of the unit above who is supposed to carry out the repair.
There are clauses in the new Strata Management Act (SMA) to address all these, but just like anything else, it is very hard in practice to execute some of them.
The complexity lies mainly in the struggle and effort to find a ‘balance’ for each and every stakeholder.
For example, residential unit owners desire the highest level of security and privacy, but mall unit owners prefer to maximize residents’ access in/out from the mall to drive footfall and sales.
The mall unit owners would also like long hours of retail operations in order to harness more rents but unfortunately, this becomes a disturbance to the business of running a hotel.
There is a fair share of strata-titled malls in the country and over the years, we have seen the pros and cons of such properties. Generally, we have strata developments which are horizontally split or vertically split, or a hybrid of the two.
The advantage of horizontally split developments is its compression effect where office / hotel / residential towers can shower the mall with downward foot fall from the top down and people from basement car parks are ‘pushed’ upward to all the components, indirectly creating another set of footfall.
However, such configurations would indirectly introduce a large number of access between the strata components, which poses security and control threats.
On the other hand, for ease of strata planning, management control, particularly those having ‘sub-management corporation (MC)-like management component, the vertically split strata method is a better bet.
Besides control and management, the architecture and engineering design are much clearer and reduce the number of shared facilities and the number of shared decisions by the strata management components.
See no evil, hear no evil, hence the joint management body (JMB) or MC speaks less evil. Unfortunately, such configurations usually require a bigger investment and are less efficient in terms of maximization of plot ratio.
A sizable mixed development may involve thousands of residential / office and mall owners. Each of the strata owners has mixed needs and wants and expectations from the investment. Needless to say, profitability and brand positioning are the key driving force behind every strata development, which incentivise creativity and quality products.
On the other hand, strata property purchasers would like to enjoy the highest level of yield or appreciation from their purchase, or a high level of security and privacy for those whom are looking for office and residential space for their own use.
These are clearly mutually exclusive investment goals, and the persons/parties who are legally or structurally ‘ordained’ to make all the above happen are property managers.
The key function of property managers who could be hired by either the developer or JMB or MC, is to moderate the expectations of all the moments of truth (MOT).
When residents move in and start using the facilities, this is when the MOT happens if all the whims and fancies of common facilities and security are as per built and enjoyed by the purchasers.
When a mixed retail development is completed and possession is delivered, that is when MOT happens again if the entire concept can deliver an ambience that promotes footfall and retail activities.
Unfortunately, property managers can only “moderate” the expectations in a strata mixed context and their fair jurisdiction extends only to the management of common areas.
The value of the strata asset it serves is derived from the strata purchaser, upon whom the parcel owners have to decide who, how and when to rent it out or what business they would like to operate. Not only will they enjoy the yield, but also their decision too will add value (or otherwise) to the overall development.
Academically, strata unit owners play their individual important roles to ensure the success of the development. However, this is easier said than done.
Diplomatically , we can only safely say the developer, property managers and unit owners must all work closely together. Unfortunately, all three parties are bound by different laws and regulations which contribute to their ‘limited’ liability and responsibilities.
Nevertheless, just like the dead animal carcass in the middle of the road, by default, we know someone has to clean up the mess.
In any strata mixed development, we must be grateful that usually there is always the property manager who is managing the asset, willingly or unwillingly.
Putting aside the organization that property managers represents, these are the individual fellow Malaysian citizens who are either paid or who have volunteered to carry out this function.
Moving forward, both the non-governmental organization, developer and JMB/MC must continue to recognize the importance of building and nurturing retail talents in the strata property management industry.
It is a job that demands great depth of construction, management, legal considerations and people management skills. As such, this pool of multi-talented personnel can continue to assist developers and purchasers to manage strata developments in the country.
This paper is an excerpt from the paper Managing Mixed Developments presented by Malaysia Shopping Malls Association treasurer Ir. YL Lum at the seminar entitled Strata Management – The Good, The Bad and The Ugly on January 14
YL LUM is the vice president of the Malaysia Shopping Malls Association