A newly installed 1st Council of a management corporation (MCST) were excited about organising a party to create neighbourliness among residents and wanted to use about $5,000 from the management fund.The Council had also decided to replace the existing managing agent (outgoing MA) that had served the MCST since the issue of the Temporary Occupation Permit for the condo . A new MA (incoming MA) has been appointed to commence work shortly.
The incoming MA advised that the MCST could only use the management fund for any social event unless a resolution has been approved by a general meeting . There was no such resolution.
The Council questioned the Developer and the outgoing MA, for not tabling a motion for social activities for consideration at the 1st AGM.❓️ The Developer replied that except for items in Sect 26(3) and 1st Sch Para 3(b) of the Building Maintenance & Management Act (BMSMA), there was no obligation to table other motions for that 1st AGM. The Developer advised that the Council might convene an Extra-ordinary General Meeting to seek the use of the fund. The outgoing MA added that the current BMSMA is silent on the use of management fund for social activities.
The amended BMSMA was passed in Parliament on 11 September 2017 and came into effect on 1 February 2019. Among others, there was a new provision under Sect 38(3) requiring estimated costs for social activities be included in an annual budget to be approved at a general meeting. This provision has however, not come into operation. There were argument that since this new provision has not been effective, the Council should be entitled to use the management fund for the intended social event.
✅️The intention of Parliament for BMSMA was clear. Sect 38(3) is explicit that an MCST must not disburse any moneys from its management fund other than for the purposes specified in that section.
That Council later proceeded with the party by ticketing method. A fee was charged against each of the residents. There was a large turnout and proceeds from tickets sold were more than sufficient for that party.
In a circular dated 3 Dec 2018 published by the Building & Construction Authority, the authority announced that the effective date for three new provisions (including the use of management fund for social activities) will be made at a later date. Almost 6 years have passed, it is unknown when these provisions in question will be operational.
Wisely 98 Pte Ltd advocate that MCSTs should operate within the ambit of the BMSMA. We lead Councils in strata management and guide them to comply with the BMSMA. Of course when we have doubt, research would be made and when needed, expert or legal assistance would also be sought.
We avoid engaging in unproductive dispute whenever possible.
#stratamanagement #managingagent #socialevent
