Legal Review: Establishment of a Corporation and its Mandate under the sectional properties law

Once a sectional plan in any development is registered, the Registrar is required to constitute the respective owners of the units into a corporation. A corporation is a recognised legal entity, and has several functions under the SPA, 2020 including maintenance of the common areas; insurance of the common property; administration of the by-laws of the concerned development; enforcement of the terms and conditions relating to the land on which the development is erected; and establishment and maintenance of a fund
for the corporation’s expenses.
 

The corporation should be run by a board of management, which is required to convene annual meetings. In the corporation’s meetings, members are entitled to exercise voting rights in proportion to the units which they own. 

Where a property is charged, the
lender is entitled to exercise that right in lieu of the owner. In the discharge of its functions, a corporation is required to periodically levy each unit owner an apportioned sum, as the owner’s contribution towards the corporation’s fund. Where the owner fails to remit the required amount, the corporation reserves the right to register
a caution against the owner’s unit. The caution shall operate as a charge over the particular unit, securing the outstanding amount.
 

A corporation is also required to constitute a dispute resolution committee, to resolve any disputes members may have regarding
the enforcement of the corporation’s by-laws. The reference of a dispute to the said committee, however, does not deprive an aggrieved party of any other legally available remedies.
 

Lastly, it is noteworthy that the corporation is also an integral party in any tenancy arrangement involving a unit. The owner of the unit is required to notify the corporation in writing, of his or her intention to let out the unit. The owner is equally required to undertake to repair any damage the tenant may occasion to the premises.
 

Equally, the owner should notify the corporation once a tenancy ends. In the course of the rental arrangement, the corporation has power to evict any tenant who contravenes any by-law, where the
owner does not intervene despite the corporation’s request to forewarn the tenant.