Surplus car parks are car parks which despite being part of the development are not bundled with any specific parcel of the property. If you are living in a condominium, have you ever wondered who owns the surplus car park of your condominium?
This is what happened in the recent case of Sri Keladi Sdn Bhd (in liquidation) v Bukit OUG Condominium Joint Management Body [2022] MLJU 1512 where the property developer and the joint management body both claim the right over these surplus car parks.
Facts
The appellant is a property developer who has developed 6 blocks of condominiums known as Bukit OUG Condominium, comprising residential and commercial parcels. After the delivery of vacant possession for the residential parcels, the appellant was subsequently wound up. 149 surplus and unaccounted car parks were found during an audit exercise conducted by the liquidator of the appellant. The liquidator advertised the sale of the surplus car parks in the newspaper by way of tender submission.
The respondent, a joint management body who is entrusted to manage the common property of the development then filed an action in court to claim that the surplus car parks. It was argued by the respondent that these car parks are part of the development’s common property and assets under their management. However, the appellant submitted as the strata titles have yet to be issued, the surplus car parks are not part of the development’s common property or asset. Thus, the appellant as the land owner and developer has a right to deal with these car parks.
Decision of the High Court
The High Court held that the respondent had proven that the 149 surplus car parks were part of the property and asset of the development. The court decided that the parcel owner’s rights were governed by the Sale and Purchase Agreements (“SPAs”) as the SPAs were signed prior to the enforcement of the Building and Common Property (Maintenance and Management) Act 2007 (“BCPA 2007”). Thus, the BCPA was not applicable and the SPAs should be looked at in deciding the rights of all parcel owners.
In constructing the SPAs, the definitions of the words “common property”, “parcels” and “accessory parcels” would mean that the surplus car parks indeed formed part of the development and were intended for the exclusive use and enjoyment of the parcel owners. Thus, the surplus car parks did not belong to the appellant and the liquidators had no right to sell them. The respondent is entitled to manage these car parks as the common property in the development. The appellant then filed an appeal to the Court of Appeal.
Decision of the Court of Appeal
Two issues arose in the appeal:
1. What was the instrument or document governing the ownership of the car parks; and
2. Would the car parks come under the definition of “common property” under the SPAs;
First issue
With regards to the instrument or document used to determine the ownership of the car parks, it was agreed by the parties that the SPAs should be the decisive instrument or document to determine such ownership. The Court of Appeal further referred to the case of Perantara Properties Sdn Bhd v JMC-Kelana Square & Another Appeal [2016] 5 CLJ 367, a case relating to a dispute about car parks where a similar decision was reached in agreeing that the determination of the parking spots would depend on the terms of the SPAs.
Second issue
However, the Court of Appeal disagreed that the surplus car parks fall under the definition of “common property” under the SPAs as the definition of common property in the SPA must mean that it could not include the additional or surplus 149 car parks in this case. The meaning of common property as defined in the SPAs should be read together with the lists of the common facilities and services in the SPAs. It ought to be emphasised that the purchasers who bought the parcel units with car parks have been catered for with the same. Since it is “additional”, it exists more than what is required. Thus, it cannot and must not be enjoyed by the resident as “common property” in the development.
Also, the novel construction as suggested by the respondent is misconceived as such construction would mean that everything that is not stated as “common property” would have to be included and so, the unit purchaser, tenant or even visitor of the condominium could enjoy everything that is not stated as “common property”. This wide definition of common property which includes “anything under the sun” is disagreed by the Court of Appeal.
Conclusion
The Court of Appeal held that the learned High Court Judge had failed to interpret the words of the relevant schedule found within the SPA correctly. Based on the above reasons, it should follow that the surplus car parks indeed belong to the appellant and the respondent has no right and interest to manage the same.
Points to take note of
1. Most of the time, we would generally presume that a facility or property within the condominium common area is a common facility or common property but this may not necessarily be the case. There may be instances where the assets have been excluded from the list of common assets and property and thereby, these will remain as the property of the developer. Thus, it is important for the property developer to always list down all the assets clearly in the SPAs to avoid any conflict and safeguard each party’s interests.
2. It should be noted that both the High Court and Court of Appeal did not consider the earlier High Court decision in the case of 3 Two Square Sdn. Bhd. v. Perbadanan Pengurusan 3 Two Square & Ors; Yong Shang Ming (Third Party) [2018] 4 CLJ 458 where the High Court has taken a less restrictive approach in determining that “common property is simply that which is not a parcel”.
By George Miranda, Joy Sam Jia Qian, Kong Chai Yin
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.
