Developer to open and maintain Building Maintenance Account
(1) The developer of any building or land intended for subdivision into parcels shall, before the delivery of vacant possession, open, in respect of the development area on which the building is erected, a Building Maintenance Account in the name of the development area with a bank or financial institution licensed under the Banking and Financial Institutions Act 1989 [Act 372] or regulated by the Central Bank under any other written law.
(2) One Building Maintenance Account shall be opened for each development area.
(3) Each Building Maintenance Account shall be maintained by the developer until the establishment of the Body for the building.
(4) The developer shall not open and maintain a Building Maintenance Account together with any other building outside the development area.
(5) Where any dispute arises in respect of a Building Maintenance Account, the Commissioner may resolve the dispute as he deems fit and just.
Duties of developer as to Building Maintenance Account
(1) A developer shall deposit into the Building Maintenance Account—
(a) all charges received by him from the purchasers in the development area for the maintenance and management of the common property of the development area; and
(b) all charges for the maintenance and management of the common property to be paid by the developer in respect of those parcels in the development area which have not been sold, being a sum equivalent to the maintenance charges payable by the purchasers to the developer had the parcels been sold.
(2) The developer shall—
(a) cause proper accounts of the Building Maintenance Account to be kept in respect of all sums of money received from and all payments made out of the Building Maintenance Account;
(b) appoint a professional auditor to audit the Building Maintenance Account annually or in the case of where money is to be transferred under subsection 19(3), one month before the date of actual transfer;
(c) file with the Commissioner a copy of the statement of accounts certified by the auditors and a copy of the auditor’s report within fourteen days of the accounts being audited; and
(d) permit the Commissioner or any person authorized by the Commissioner in writing to act on its behalf full and free access to the accounting and other records of the Building Maintenance Account and to make copies or extracts of those accounting or other records.
(3) The Commissioner shall have the right to appoint an approved company auditor to investigate the books, accounts and transactions of a Building Maintenance Account and the developer shall pay all the expenses incurred for that purpose.
(4) The developer shall, upon the completion of a building and until the Body is established, insure and keep insured the building against any loss of the building and against fire and other risks.
(5) The developer shall furnish to the Commissioner or any public authority as may be specified by the Minister such returns, reports, accounts and information with respect to its activities and finances as the Commissioner or Minister may, from time to time, require or direct.
(6) The returns, reports, accounts and information shall be in such form as the Commissioner or Minister may, from time to time, specify.
(7) A developer who fails to comply with this section commits an offence and shall, on conviction, be liable to a fine of not less than ten thousand ringgit but not more than one hundred thousand ringgit and shall also be liable to a fine not exceeding one thousand ringgit for every day during which the offence is continued after conviction.
Moneys to be deposited into Building Maintenance Account
The developer shall deposit all moneys received from the purchasers for the purpose of the maintenance and management of a building into the Building Maintenance Account within two working days of receiving the moneys.
Moneys not to form part of the property of developer
(1) All moneys in the Building Maintenance Account, notwithstanding any other written law to the contrary, shall not be deemed to form part of the property of the developer in the event—
(a) the developer enters into any composition or arrangement with his creditors or has a receiving order or an adjudication order made against him; or
(b) the developer, being a company, goes into voluntary or compulsory liquidation.
(2) Upon the happening of any of the events referred to in subsection (1)—
(a) the moneys in the Building Maintenance Account shall vest in the administrator, the official receiver, trustee in bankruptcy or liquidator, as the case may be, to be applied for all or any of the purposes for which monies in the Building Maintenance Account are authorized to be applied by this Act; and
(b) any money remaining in the Building Maintenance Account, after all payments have been made pursuant to paragraph
(a), shall be held by the administrator.
(3) Any balance of money referred to in paragraph (2)(b) shall be transferred into an account in the name of the Body.
Prohibition on collection of charges
(1) No person shall at any time collect any charges from any purchaser for the maintenance or management of any building or land intended for subdivision into parcels and common property unless—
(a) a Building Maintenance Account has been opened in the name of the development area; and
(b) vacant possession of the parcel purchased by the purchaser has been delivered to the purchaser.
(2) Notwithstanding subsection (1), any developer of a development area which has been completed on or before the commencement of this Act and has, immediately before that date, been collecting
charges for the maintenance and management of a building from the purchasers comprised in the development area may continue to do so until the Body has been established.
(3) Any person who contravenes this section commits an offence and shall, on conviction, be liable to a fine not exceeding one hundred thousand ringgit or to imprisonment for a term not exceeding one year or to both.
Duty of developer in respect of charges for building completed before commencement of this Part
(1) Any developer of a development area which has been completed before or on the commencement of this Act but for which a management corporation has not been established shall, not later than six months following the commencement of this Act submit to the Commissioner an account audited by a professional auditor of all moneys collected and expended for the purposes of maintenance and management of the common property and sinking fund, if any, prior to the commencement of this Act.
(2) The Commissioner may, upon request by the developer of a development area, extend the period stated in subsection (1) for another period not exceeding three months.
(3) Any person who contravenes this section commits an offence and shall, on conviction, be liable to a fine of not less than ten thousand ringgit but not more than one hundred thousand ringgit or to imprisonment for a term not exceeding one year or to both.
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
