Annual reviews of condo managing agents may be dropped

Blocks of high-rise condominium in the Orchard Road estate.
Blocks of high-rise condominium in the Orchard Road estate. PHOTO: ST FILE

The stage is set for a showdown between managing agents and residents at strata-titled properties such as condominiums over a proposed legislative amendment.

The tweak would allow condo managing agents to do away with a mandatory annual review of their appointment.

The Ministry of National Development and the Building Construction Authority (BCA) are inviting public feedback until tomorrow on 33 proposed amendments to the Building Maintenance and Strata Management Act, which governs buildings such as condominiums.

Under current rules, a managing agent's contract is reviewed at every annual general meeting, and can be terminated. An agent can be appointed by the Management Corporation Strata Title (MCST), the managing body of a condominium, for up to three years.

The proposal to scrap the mandatory review is based on the rationale that "it is redundant to review the appointment of managing agents every year if the managing agent has already been appointed by the MCST for three years", according to a BCA media release.

Some condo residents The Straits Times spoke to were against the amendment.

One of them, retired corporate secretary Winnie Tan, 63, who lives in an Upper East Coast Road condo, said its managing agent had been appointed for three years.

But the "council is having difficulties negotiating the fees with the managing agent".

"With a three-year contract which does not allow for annual review, condominium owners will have difficulty terminating non-performing managing agents without incurring penalty costs," she noted.

Also, "a managing agent with a long tenure is unlikely to align its interests with the condominium owners' but is more likely to protect its own interests. The check and balance is lost if the three-year contract is non-reviewable".

Undergraduate Chan Kai Yan, 21, said managing agents tend to form close relationships with the management council, which may not be in the interest of residents, especially without the annual review.

He noted that the managing agent at his grandmother's Bukit Timah condo had not accounted for wheel-clamp release fees, but as the management council had approved the accounts without the fees at the AGM, "there was nothing the BCA could do".

In contrast, managing agents cheered the proposed amendment, citing benefits such as being able to plan for the long term.

Ms Eleana Teo, managing director at Knight Frank Property Asset Management (Strata Management), said the amendment was "good news" as it would allow agents to discuss and work on longer-term plans with the council.

"This amendment does not accord the managing agent any special privileges, nor does it give any leeway to the managing agent in the decision-making process.

"Should there be any reason the council finds that there is a need to part ways with the managing agent, similar to all contracts, there is always a provision for termination which can be exercised by either party," she added.

Dr Lim Lan Yuan, president of the Association of Property and Facility Managers, said "if managing agents were reviewed every year, no managing agent will want to do anything more than a year, as they could have put in all their resources, but their appointment may not be renewed".

He added that for longer-term asset enhancement, managing agents need more than a year to execute the plans. For instance, for painting work, a consensus would be needed on the design and time frame and to put up structures.

A spokesman for the BCA said "where appropriate BCA will take the feedback into consideration when finalising the amendments to the Bill".

"The effective date of the amendments will be announced when the draft Bill is read in Parliament."

A version of this article appeared in the print edition of The Straits Times on February 20, 2017, with the headline 'Annual reviews of condo managing agents may be dropped'. Print Edition | Subscribe