The Court of Appeal in Ideal City Development Sdn Bhd v Tribunal Pengurusan Strata Putrajaya, Wilayah Persekutuan & Anor [2025] 1 AMR 805 ruled that once a Joint Management Body (JMB) is established, the Strata Management Tribunal (SMT) cannot order developers to provide management documents directly to individual parcel owners. This clarifies that developers’ document disclosure obligations under the Strata Management Act 2013 (SMA) are owed to the JMB, not to individual owners; thereby reinforcing the collective management structure of strata developments and shielding developers from post-handover claims.
The Case
A parcel owner demanded financial records, accounting software access, and approved plans from the Infinity Tower developer after the JMB was formed. The SMT ordered the developer to comply, but the Court of Appeal overturned this, ruling that the SMT lacked jurisdiction to compel developers to provide documents directly to individual parcel owners.
Key Takeaways for Developers
1. SMT Jurisdiction Ends at JMB Formation
- Once the JMB is established, the custody and control of document (e.g., bank statements, approved plans) vests with the JMB under Section 15 of the SMA. The SMT cannot order developers to supply these to individual parcel owners, protecting developers from such claims after handover.
- Benefit: Developers are protected from post-handover SMT claims by individual owners, provided handover is complete.
2. Parcel Owners’ Limited Rights
- The SMA does not grant individual parcel owners the right to demand detailed financial records or plans directly from developers. Instead, owners are limited to requesting summary certificates under Section 31 of the SMA or, in the case of a Management Corporation (MC), inspecting accounts under the Second Schedule.
- Benefit: Developers should be aware that such requests should be redirected to the JMB or MC, reducing exposure to frivolous claims.
3. Statutory Compliance Avoids Liability
- Section 15 of the SMA mandates developer handover all relevant documents to the JMB upon its formation. Non-compliance is an offence under Section 15(4), carrying fines up to RM250,000 or imprisonment. Developers must ensure proper documentation and timely handover to mitigate legal risks.
- Benefit: Strict compliance protects developers from severe penalties and legal disputes.
Practical Tips for Developers
1. Strengthen Handover Processes
- Transfer all documents (financial records, approved plans) to the JMB promptly and in compliance with SMA requirements. Obtain written confirmation (e.g., Form 4) to evidence the compliance.
2. Minimize Post-Handover Liabilities
- Once the JMB is formed, developers are generally relieved from direct document disclosure obligations to individual owners. Redirect requests to the JMB to avoid SMT claims, reducing exposure to SMT claims.
3. Prioritize Timely JMB Formation
- Form the JMB within the SMA’s 12-month timeline to transfer management responsibilities quickly, avoiding prolonged exposure to disputes.
4. Ensure Transparency Financial Records
- Maintain auditable financial records and support JMBs in presenting them at AGMs, as unanimous AGM approval can counter owner claims.
– By George Miranda, Joy Sam Jia Qian, Nurafiqah ‘Izzati –
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.
