Community Management Corporation

Community Management Corporation | Bestar

Community Management Corporation

In Singapore, a "community management corporation" is typically referred to as a Management Corporation Strata Title (MCST). This legal entity is responsible for the management and maintenance of common property in strata-titled developments, such as condominiums, apartments, and other properties with multiple owners and shared facilities.

Key Aspects of an MCST:

• Legal Entity: An MCST is a corporate body with the legal power to sue and be sued. It is automatically formed when the strata title plan for a development is registered.

  
  

• Membership: All unit owners (known as Subsidiary Proprietors or SPs) in the development are automatically members of the MCST.

  
  

• Governance: The MCST is governed by a Management Council, which is a representative body of members elected from among the SPs. This council is in charge of the day-to-day management of the property.

  
  

• Legal Framework: The MCST's duties and powers are defined and regulated by the Building Maintenance and Strata Management Act (BMSMA).

  
  

Main Responsibilities of an MCST:

• Common Property Management: The primary role of an MCST is to control, manage, and administer the common property for the benefit of all unit owners. This includes areas like swimming pools, gyms, gardens, corridors, lifts, and security systems.

  
  

• Maintenance and Repair: MCSTs are responsible for the proper maintenance and repair of the common property, ensuring it is in good, serviceable condition.

  
  

• Financial Management: The MCST manages the development's funds, which are typically divided into two main categories:

  
  

  • Management Fund: Used for day-to-day expenses.

  • Sinking Fund: Set aside for future capital needs and major works, such as repainting or upgrading facilities.

    
    

• Collection of Fees: The MCST collects maintenance fees and sinking fund contributions from all unit owners based on their share values.

  
  

• Enforcing By-laws: MCSTs establish and enforce a set of by-laws (or house rules) to regulate the use of common property and individual units. These by-laws are meant to ensure a peaceful living environment.

  
  

• Hiring Managing Agents: While the MCST council makes the decisions, the day-to-day operations are often handled by a professional Managing Agent (MA) who is contracted by the MCST. The MA is responsible for tasks like hiring cleaners and security guards, handling administrative matters, and ensuring proper financial accounting.

  
  

Dispute Resolution:

Disputes between an MCST and unit owners are not uncommon. They can involve issues like:

• Unpaid maintenance fees

• Disagreements over the use of common facilities

• Disputes over by-law enforcement

• Concerns about repairs and maintenance

  
  

Common ways to resolve these disputes include:

1. Negotiation with the MCST.

   
   

2. Mediation through bodies like the Community Mediation Centre (CMC).

   
   

3. Initiating proceedings with the Strata Titles Board (STB), which is specifically set up to handle such disputes.

Hiring Managing Agents

In Singapore, the process of hiring a Managing Agent (MA) for a strata-titled property, such as a condominium, is overseen by the Management Corporation Strata Title (MCST) and is governed by the Building Maintenance and Strata Management Act (BMSMA).

How to Hire a Managing Agent

The appointment of a managing agent is a significant decision for the MCST, as the MA is responsible for the day-to-day operations of the property. The process typically involves:

1. Preparation and Due Diligence: The Management Council of the MCST will conduct a thorough search for suitable MA firms. This involves getting quotations, reviewing their track record, checking their professional indemnity insurance, and interviewing them to assess their suitability and expertise. They should look for MAs with a strong understanding of strata laws and regulations in Singapore. The Building and Construction Authority (BCA) recognizes accreditation schemes for MAs, which can be a good indicator of their professionalism.

   
   

2. General Meeting and Resolution: An ordinary resolution must be passed at a general meeting of the MCST to appoint a managing agent. This can happen at an Annual General Meeting (AGM) or an Extraordinary General Meeting (EGM).

   
   

3. Submission of Motion: A motion to appoint a specific MA must be submitted for the general meeting. The motion should clearly state the name of the proposed MA, the fees payable, and the terms and conditions of the appointment.

   
   

4. Voting: All unit owners (Subsidiary Proprietors) present at the meeting will vote on the motion. If the motion is passed by an ordinary resolution (a simple majority of the votes), the Management Council is empowered to formally appoint the MA and sign the service agreement. The appointment is usually for a term of up to three years.

Key Duties of a Managing Agent

The MCST may delegate many of its powers, duties, and functions to the MA, who acts on behalf of the Management Council. The MA's responsibilities are outlined in the service agreement and typically include:

• Day-to-Day Operations: Overseeing the routine maintenance of common property, including cleanliness, security, landscaping, and pest control. They also manage repairs and scheduled maintenance works.

  
  

• Administrative Matters: Handling administrative tasks such as facility bookings, car park matters, and renewing licenses. They also prepare for and organize council meetings, AGMs, and EGMs.

  
  

• Financial Management: Managing the MCST's funds, which includes collecting maintenance fees, preparing monthly financial statements, and monitoring cash flow.

  
  

• Enforcing By-laws: Assisting the Management Council in enforcing the by-laws of the property to ensure a harmonious living environment for all residents.

  
  

• Advisory Role: Providing advice to the Management Council on the Building Maintenance and Strata Management Act (BMSMA) and other relevant regulations to ensure the property remains compliant.

Termination of an Managing Agent

An MA's contract can be terminated by the MCST through an ordinary resolution at a general meeting. This can be done if the MA's performance is unsatisfactory. It's recommended that the Management Council first formally document their complaints and give the MA a chance to rectify the issues before moving to terminate the contract.

Fees

MCST fees in Singapore are the mandatory payments that owners of strata-titled properties (like condominiums) make to the Management Corporation Strata Title (MCST) for the upkeep and management of common areas. These fees are typically paid monthly or quarterly and are split into two main components: the Management Fund and the Sinking Fund.

How Fees Are Calculated

The amount of fees each owner pays is not a flat rate; it's determined by the share value assigned to their unit. The share value is a figure that reflects a unit's proportionate share of ownership in the common property and is primarily based on the unit's size. Generally, the larger the unit, the higher its share value and, therefore, the more fees the owner must pay.

The formula for calculating an owner's fees is: (Your unit's share value ÷ Total development share value) × Total monthly maintenance cost

For example, if your unit has a share value of 7 and the total share value for the entire development is 1,000, you are responsible for 0.7% of the total monthly maintenance expenses.

What the Fees Cover

The collected fees are used to cover a wide range of expenses essential for maintaining the property.

• Management Fund: This is for the day-to-day operational costs, including:

  
  

  • Salaries for staff (security guards, cleaners, gardeners).

  • Utilities for common areas (lighting, water).

  • Regular maintenance and minor repairs.

  • Insurance premiums for the building and common property.

  • Administrative and management fees.

    
    

• Sinking Fund: This is a long-term reserve fund for major, non-recurring expenses that will arise as the property ages. This fund pays for things like:

  
  

  • Building repainting.

  • Replacement of lifts or other large mechanical systems.

  • Major repairs or renovations of common facilities.

  • Upgrading of security systems.

Factors That Affect Fees

Several factors can influence the overall cost of maintenance fees for a development:

• Amenities: Developments with extensive facilities like multiple swimming pools, tennis courts, and large gyms will have higher fees due to the increased costs of maintenance and cleaning.

  
  

• Age of the Building: Older buildings often require more frequent and extensive repairs, which can lead to higher fees.

  
  

• Number of Units: In larger developments with many units, the overall cost of maintenance is spread among more owners, which can result in lower individual fees compared to a small, exclusive development.

  
  

• Location and Market Conditions: The costs for services like security and cleaning can be higher in prime locations. General inflation can also drive up fees over time.

  
  

In Singapore, there is no single "market average" for MCST fees because they vary widely depending on a number of factors. Here's a breakdown of what you can typically expect.

Typical Range of MCST Fees

For most condominium units in Singapore, monthly maintenance fees usually fall within a range of S$300 to S$700. However, for more luxurious or larger developments, these fees can easily exceed S$1,000 per month.

Here's a more detailed breakdown based on unit size:

• Studio / 1-Bedroom: Typically between S$300 and S$450 per month.

  
  

• 2-Bedroom: Commonly range from S$400 to S$550 per month.

  
  

• 3-Bedroom: Usually S$500 to S$700 per month.

  
  

• Luxury Units / Penthouses: Can be S$700 or more, often exceedingS1,000 per month.

  
  

Key Factors Influencing Fees

The wide range in fees is due to several key factors:

1. Amenities and Facilities: This is the most significant factor. Condominiums with extensive facilities—such as multiple swimming pools, tennis courts, large gyms, and elaborate landscaping—will have considerably higher fees. The cost of maintaining and operating these facilities is passed on to the residents.

   
   

2. Number of Units: In a large mega-development with a high number of units (e.g., over 1,000), the total maintenance cost is spread across more owners. This often results in a lower individual fee compared to a small, boutique development with fewer units, where the costs are divided among a smaller group.

   
   

3. Age of the Development: Older condominiums may have higher maintenance fees because they require more frequent and extensive repairs, especially for major components like lifts and plumbing systems.

   
   

4. Share Value: As mentioned previously, fees are calculated based on the unit's share value, which is tied to its floor area. Larger units are assigned a higher share value and thus contribute a larger portion of the fees.

   
   

5. Location: While not as significant as facilities, the location of the property can affect the cost of services. For example, security and cleaning services might be more expensive in prime, central districts.

   
   

It's important to note that these figures are general market averages. The actual fee for any specific unit is determined by the MCST at the Annual General Meeting (AGM) based on a detailed budget for the upcoming year. Fees can also increase over time to account for rising costs of labor, utilities, and materials.

How Bestar can Help

A Managing Agent (MA) plays a crucial role in the effective management of a strata-titled property, such as a condominium, in Singapore. While the Management Corporation Strata Title (MCST) and its council are legally responsible for the property, they are often made up of volunteer residents who may lack the time, expertise, or resources for professional property management. This is where a managing agent becomes invaluable.

Here's how Bestar helps the MCST and residents:

1. Professional Expertise and Compliance

• Knowledge of Regulations: Bestar is a professional entity with a deep understanding of the Building Maintenance and Strata Management Act (BMSMA) and other relevant laws, such as the Personal Data Protection Act (PDPA). They ensure that the MCST's actions are compliant, thereby protecting the MCST and its members from legal risks.

  
  

• Best Practices: We bring industry best practices to the table, from financial accounting and auditing to maintenance and security protocols. This professionalism helps to prevent common issues and ensures the property is managed efficiently.

2. Streamlined Day-to-Day Operations

• Administrative Efficiency: Bestar handles the bulk of the administrative and operational tasks that would otherwise fall on the volunteer Management Council. This includes things like:

  
  

  • Collecting maintenance and sinking fund fees.

  • Managing and maintaining the official strata roll (a register of unit owners).

  • Preparing for and conducting general meetings (AGMs/EGMs).

  • Managing accounts and providing financial statements.

    
    

• Vendor and Staff Management: Bestar is responsible for sourcing, hiring, and managing various contractors and service providers, such as:

  
  

  • Security guards.

  • Cleaning and landscaping crews.

  • Repair and maintenance technicians.

  • Pest control services. By leveraging their network, MAs can often secure better rates and quality of service, which benefits all residents.

3. Financial Prudence and Transparency

• Budget Management: Bestar works with the Management Council to create a transparent and effective budget, ensuring that funds are allocated wisely for both day-to-day expenses (Management Fund) and future major works (Sinking Fund).

  
  

• Financial Accountability: We maintain detailed financial records, prepare monthly statements, and oversee the auditing process, providing residents with clear visibility into how their fees are being used. This transparency is crucial for building trust.

  
  

4. Conflict Resolution and Communication

• First Point of Contact: Bestar often serves as the first point of contact for residents' complaints, feedback, and requests. This frees the Management Council from having to deal with every minor issue and allows the MA to handle many common problems directly.

  
  

• Enforcing By-laws: We assist the MCST in enforcing the property's by-laws (or house rules), which is essential for maintaining a harmonious living environment. This can include handling issues like illegal parking, noise complaints, or improper use of common facilities.

5. Proactive Maintenance and Asset Enhancement

• Preventive Measures: Bestar is proactive rather than reactive. We anticipate potential maintenance needs and schedule preventive works to avoid future, more costly repairs. This helps to preserve and even enhance the value of the property over time.

  
  

• Project Management: For major projects, such as a full repainting of the building or the replacement of lifts, Bestar will manage the project from start to finish, including tendering for bids, supervising the contractors, and ensuring the work is completed on time and within budget.

In essence, Bestar takes on the operational and administrative burden of managing a complex, multi-unit property, allowing the volunteer Management Council to focus on higher-level strategic decisions for the benefit of all residents.

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