What Is The Management Corporation Strata Title (MCST) in Singapore?

what is mcst and what can you do if there's a conflict

Have you ever wondered what is a management corporation or Management Corporation Strata Title (MCST)? It is a juridical entity with perpetual succession that is empowered by the law to administer and oversee the common property of a strata development. In other words, it is the managing body of strata-titled developments or a compound with multiple owners that shares common facilities (private condominiums, offices, strata homes, etc.).

In this article, you'll learn what is MCST, its duties, what you can do in case of a conflict, and more. 

 

What is a strata title or development? 

In Singapore, a strata development includes private condominiums, shopping centres, industrial facilities and mixed-use projects, whose units have varying owners.

MCST is the managing body of such strata developments

MCST is important for properties that share common facilities and need to be taken care of, such as a private condominium. These include parking space, gardens, swimming pools, perimeter fence and security systems, as well as gym and sports facilities. Most unit owners are not involved in maintaining such amenities, but all of them need to pay maintenance charges to the MCST Singapore.

Duties of the Management Corporation Strata Title (MCST)

The full list of the duties of the management corporation under the Building Maintenance and Strata Management Act (Chapter 30C) is long and full of legal jargon, but fundamentally it involves:

  • Managing the common property for the benefit of all subsidiary proprietors or unit owners.
  • Properly maintaining and keeping the common property in a state of good and serviceable repair, including its fitting and fixtures.
  • Insuring the common property in compliance with the Act.
  • Upgrading to the common property or providing additional facilities if ordered to do so by a special resolution from the property owners
  • Follow lawful orders from the government to fix part of strata development or common property or carry out other works therein, or abate any nuisance on the common property.
  • Convene Annual General Meetings (AGMs) in each calendar year not later than 15 months from the prior AGM, and inform each property owner of such meeting at least 14 days in advance. Any other meeting to be called by the MCST’s council is known as an Extraordinary General Meeting.

As shown from the list above, this means the management corporation is in charge of paying for cleaners, gardeners, plumbers, electricians, technicians, security guards and other personnel needed to keep the development in good working order.

If the MCST’s council or the appointed managing agent struggles to fulfil those tasks, unwanted results can happen. For instance, the gym could get dirty and smell funky, the garden could get overrun with weeds and pests, theft and vandalism could become rampant, hallways and parking spaces are turned into garbage dumps, while the swimming pool could appear as the home of the “Creature from the Black Lagoon”.

Ultimately, poor management would turn off people from living in a private condominium, leading to a depreciation in property prices and lower monthly rents.

So it’s strongly advised to elect people with the capability and expertise to the MCST’s council. If not, make sure your management corporation appoints a competent managing agent with a good track record.

How is a MCST created?

According to Building and Construction Authority (BCA), the management corporation or the MCST is automatically created when the developer submits the strata title plan to the Chief Surveyor and a strata title application is lodged with the Singapore Land Authority’s Registrar of Titles. But a developer is only allowed to register the strata title plan when construction has reached the roof level, meaning the project is nearly completed. If you purchased a unit in that development, you will automatically become a member of the MCST.

Officially, it will be called “The Management Corporation — Strata Title Plan No.____” with the BCA issuing a tracking number to differentiate it from other managing bodies.

The day the management corporation is created until the date of the first Annual General Meeting (AGM) is called the “initial period”, which only has a duration of up to 12 months.

Within this time frame, it is the home builder which exercises the powers and duties of the council of a management corporation. The developer also needs to open a bank account in the name of the MCST and deposit all the maintenance fees it has collected into that account. But if the Commissioner of Buildings finds out that the developer is doing a poor job of running the estate, the commissioner can appoint one or more managing agents to run the estate

During the first AGM, the subsidiary proprietors or unit owners must elect their own council to oversee the management corporation, but they should not be more than 14 natural persons. These comprise:

  • A Chairperson
  • A Secretary
  • A Treasurer
  • Council Members

The developer is also obliged to transfer its authority over the MCST to the elected council. These include transferring control of management corporation’s monies, including the maintenance funds, as well as handing over all keys and other means of access necessary for the performance of the council’s duties and responsibilities.

Important: Under the law, the developer is required to hold the first AGM within one month after the end of the initial period. But if at least 10 percent of the unit owners submit a written request to hold the first AGM, the home builder must do so within six weeks of getting the letter.

If the MCST’s members want to appoint a managing agent, they can do so during the annual general meeting, as well as determine which task, duties and responsibilities to delegate to that agent.

More importantly, the annual contribution (including maintenance fees) by each unit owner shall only be decided during a general meeting. Prior to the first AGM, this is paid to the developer, and the amount must not exceed the maximum rate stated in the sales and purchase agreement (SPA) and option to purchase form.

 

List of MCSTs in Singapore

When the Building Maintenance and Strata Management Act was introduced in April 2005, there were only 2,700 MCSTs and 170,000 strata units across Singapore. But as of December 2017, the number of MCSTs and strata units respectively surged to 3,400 and 354,200, said Strata Titles Board Registrar Brenda Chua in May 2018. These include residential, industrial and commercial buildings as well as mixed-use projects.

Want to check the management corporation and appointed management agent (if there is) of a particular development? See the list here. It features an interactive map with a development’s location and its MCST, and you can scan the list of managing bodies and their telephone numbers.

An alternative is to visit BCA’s MCST Inquiry Site. Just input the management corporation’s plan number, its Unique Entity Number (UEN) or the name of the development. Through this portal, you can learn the status of the MCST and its contact number, as well as the name of the managing agent and its contact details.

 

Looking up a Managing Agent

Although a management corporation is the decision maker on how strata developments are run, the actual work is typically performed by managing agents. As council officials are usually volunteers, it is managing agents who often run the day-to-day operations of a development.

These tasks include instructing and paying staff such as cleaners and security guards, enforcing by-laws, handling questions from tenants and residents, as well as ensuring proper accounting and auditing of funds. The managing agents are contracted yearly and are usually paid quarterly from maintenance charges collected from all property owners.

If your estate is looking for a qualified and competent managing agents, we strongly advise you to look up the List of Managing Agents jointly accredited by the Singapore Institute of Surveyors and Valuers (SISV), and the Association of Property and Facility Managers (APFM).

Important: There are two categories of accreditation for managing agents. Those under Category A are deemed qualified to run large developments with over 150 units, while those under Category B should only manage estates with 150 units and below.

But if you still want to ensure that your MCST will get a managing agent with an excellent track record, try doing the following:

  • Make a shortlist of managing agents you want to consider.
  • Contact them and ask the agent about the current estates they are running, and check BCA’s MCST Inquiry Site to confirm.
  • Visit these developments and jot down notes about the state of the public spaces and facilities there.
  • Interview some residents and tenants about their experience with the managing agent.
  • Finally, share the results of your investigation with your management corporation and council, then decide which managing agent to hire.

 

Latest Updates to MCST Laws

The Building Maintenance and Strata Management Act was first implemented in April 2005, but significant amendments were made to the law and these were passed on 11 September 2017. Key changes include:

I. Limiting the number of proxy votes a MCST member can hold to two or two percent of the total number of lots in a development, whichever is higher.

II. Prohibition on double-hatting, meaning a council official cannot concurrently hold more than one role in the council. As such, a chairperson cannot be the treasurer or secretary at the same time.

III. A subsidiary proprietor cannot be nominated and elected into the council sans his/her explicit consent.

IV. The sales and purchase agreement (SPA) and option to purchase form must indicate the maximum maintenance fee that will be collected from the property buyer, and the developer is not allowed to collect an amount that exceeds that.

V. A unit owner is also allowed to install safety equipment within his property like security systems and window grilles. But these should be installed in a competent and proper manner and should not ruin the appearance of the development. The Commissioner of Buildings is also authorised to appoint a manager if a serious dispute between subsidiary proprietors prevent the council from doing its responsibilities, or if there is a safety or health concern.

According to the BCA, the cap on proxy votes aims to encourage property owners to be more actively involved in their estate by attending meetings, and to prevent a single person or a clique from dominating the decision-making process of the management corporation. This is to ensure that no draconian resolutions or by-laws will be passed by the MCST that many residents are opposed to.

On the ban on double-hatting and requiring the explicit consent of the nominee, these intends to prevent conflicts of interest

Regarding the inclusion of the maximum maintenance charge on the SPA, this aims to enhance transparency and avert a situation where the home buyer will have to pay a higher fee than what was shown in the contract.

Finally, the Act now allows subsidiary proprietors to install safety fittings, as there had been cases when management corporations prevented unit owners from installing window grilles.

 

Residents vs MCST: What to do in case of conflicts

The Ministry of National Development (MND) revealed in May 2018 that the Strata Titles Boards (STB) handled more disputes in 2017 than in each of the preceding two years, and nearly half of the total cases involved spats due to en bloc sales along with quarrels between subsidiary proprietors and their MCST. In fact, cases related to such disputes reached 56 last year compared to 27 in 2015.

I. If you have an issue with a fellow resident, the managing corporation or its council, the first thing to do is to talk with the concerned party and resolve the problem amicably.

II. If this fails, seek the assistance of Community Mediation Centre (www.mlaw.gov.sg) and Singapore Mediation Centre (www.mediation.com.sg).

III. If all the above options are exhausted but the issue has not been settled, unit owners and the MCST are advised to seek the intervention of the STB. This requires an application fee of S$500. However, not all kinds of spats can be resolved by the Board. For the list of cases it can act on, please refer to this PDF and look up page 32.

IV. For all other issues beyond the jurisdiction of the Board, the plaintiff can turn to the court. Remember, the management corporation can sue and be sued.

 

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