Business

The powers of the Strata Commission

Legal Notes

With SAMANTHA MOORE

Wednesday, July 31, 2013    

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THE Registration (Strata) Titles Act (hereafter referred to as "the original Act") was enacted to govern the administration and operation of strata properties in Jamaica. It, however, failed to address the many problems that arose with the management of strata properties such as enforcing the payment of maintenance fees as well as dispute resolutions. In 2009, the Registration (Strata Titles) (Amendment) Act (hereafter referred to as "the amendment Act") was passed to rectify these problems. One of the most fundamental developments under this amendment Act was the establishment of a Commission of Strata Corporations (hereafter referred to as "the Commission). Set out below is a brief summary of the various functions and duties that are imposed upon the Commission.

The core function of the Commission is to monitor, regulate and supervise Strata Corporations. This entails the keeping of a register of Strata Corporations, facilitating the resolution of disputes between a Strata Corporation and a registered proprietor, considering complaints from proprietors that the amount of the maintenance fee is unreasonable or inequitable, and enforcing the by-laws.

The amendment Act also gives the Commission wide powers in exercising its functions. For example, the Commission can order a Strata Corporation to hold an annual general meeting for the purpose of electing an Executive Committee and to provide to the Commission, within 14 days of the meeting, the names of the members of the Executive Committee. Where the Strata Corporation fails to do so, the Commission itself may convene the annual general meeting and any decisions taken at such meeting shall be binding on the Strata Corporation.

Most important, the Commission may order by notice in writing to an Executive Committee or a proprietor, or both, that the maintenance fees paid by the registered proprietors be varied where they appear to the Commission to be excessive or inadequate.

In order to effectively monitor and control Strata Corporations, it is mandatory under the Act for each Strata Corporation to register with the Commission within ninety (90) days of becoming a body corporate as well as to pay the "prescribed fee". The Commission has the power to waive or reduce this fee in cases where the average income of the proprietors in the complex is less than an amount prescribed by the minister, and the Commission is satisfied that it is reasonable in the particular circumstances to so do. The Register contains all the relevant details pertaining to each Strata Corporation such as the names of the corporations and members of the Executive Committee. The Register is kept at the office of the Commission and is open for inspection at all reasonable times on the payment of the prescribed fee. Where the Strata Corporation fails to register with the Commission, this will be regarded as an offence and the Corporation will be liable to a fine not exceeding $250,000.

Strata Corporations are required to file with the Commission within 120 days after the end of each financial year a report of its activities during the said financial year. The report must include any meetings held by the Corporation, the appointment of the Executive Committee as well as the passing of a resolution in order to adopt a budget. The Strata Corporation is also obliged if requested by the Commission to lodge with the Commission a copy of their by-laws currently in force and an address for service for each proprietor. The Commission is empowered to carry out an audit of the accounts and records of a Strata Corporation as well as to investigate its activities, in instances where the Commission is of the opinion that the circumstances warrant such an investigation.

Where a registered proprietor defaults on his maintenance payments and a Strata Corporation seeks to exercise its power of sale pursuant to the amendment Act, the Corporation must first obtain approval from the Commission. In order to obtain this approval, the Strata Corporation must satisfy the Commission that the Corporation has taken all reasonable measures to recover the arrears by giving notice to the proprietor and his agent and mortgagee (if any) in the manner set out in the amendment Act.

Where the Commission is satisfied that the Corporation has exhausted all means of notifying the proprietor, it may direct the Corporation to take any additional action it considers fit in the circumstances, including the publication of a notice of the proposed sale of the strata lot in a local newspaper. Once this is done, the Commission will then issue a certificate of approval and the Corporation can then exercise its power of sale.

Under the original Act, there are a number of matters that can only be dealt with by a unanimous resolution among the proprietors such as transferring and leasing the common property. It can be difficult in some instances to obtain a unanimous resolution due to the absence of just one proprietor at a meeting. The amendment Act sought to cure this problem by allowing a Strata Corporation to apply to the Commission for an order appointing a proxy to vote in cases where there is a proprietor who is able to vote but he/she fails (after being served with notice) to attend meetings or appoint a proxy.

Please note, however, that the decisions taken by the Commission are not final and any persons aggrieved by such decisions may appeal to a Strata Appeals Tribunal upon payment of the prescribed fee. The decisions or order made by the Tribunal are binding on the parties and any person failing to comply with said decisions or order is guilty of an offence and liable to a fine not exceeding $1 million, or imprisonment for a term not exceeding one year, upon default of payment.

There is no doubt that the establishment of a Commission of Strata Corporations represents a concerted effort by the authorities to address the problems that had arisen with regard to the operation of strata properties. This in turn will contribute significantly to the more efficient functioning of such properties.

Samantha Moore is an associate at Myers, Fletcher & Gordon and is a member of the firm's Property Department. Samantha may be contacted via samantha.moore@mfg.com.jm or www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice.

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