Strata Title

Background of the Establishment of TKHS

The Ministry of Energy and Natural Resources has established the Special Strata Title Fund (TKHS) to receive government allocations and contributions from any party—whether individuals, the private sector, institutions, or entities from within or outside the country—for the purpose of resolving strata title application issues for Special Buildings in Peninsular Malaysia.

This "Special Building" refers to Section 4 of the Strata Titles Act 1985 (Act 318)—namely, any building occupied prior to June 1996 or any building occupied between June 1996 and 11 April 2007—that has been classified as such by the State Authority.

The establishment of this Special Strata Title Fund will enable the Ministry of Energy and Natural Resources to provide funding to cover the costs of resolving strata title applications for buildings classified as "special buildings" under the Strata Titles Act 1985.

Special Building Issues

Based on the latest data from the Department of Director General of Lands and Mines (Federal) (JKPTG), 637 schemes involving 37,623 parcels across Peninsular Malaysia have been identified as facing difficulties in registering strata titles. The issues contributing to the failure of strata title applications include the following:

• Land-related issues such as schemes not contained within a single lot, unreleased charges, breaches of land conditions or categories, titles still holding provisional status, outstanding land tax arrears, and so forth;

• Problems related to the original owner where the landowner or developer has been wound up, passed away or has financial problems; and

• Building-related issues, such as structures encroaching beyond lot boundaries, shared common access, and so forth.

• Issues related to documentation requirements, such as the absence of a CPSP plan from JUPEM, the lack of a CFO or Certificate of Completion and Compliance (CCC), or failure to reach the Super Structure Stage (SSS).

JKPTG has implemented several initiatives to address this issue, such as legislative amendments, monitoring and enforcement actions, and the establishment of TKHS.

Legislative Amendment Initiative

Amendments to the Strata Titles Act 1985 to facilitate the strata title application process are as follows:

• simplifying the conditions for strata title applications for special buildings such as allowing the use of as-built plans as a substitute if the original building plan approved by the local authority is no longer available

• improving the strata title application process by mandating an application for the Share Unit Formula Certificate (SiFUS) from the State Director of Lands and Mines (PTG) prior to filing the Schedule of Parcels with the Local Authority and obtaining a sales permit from the Ministry of Housing and Local Government

Monitoring and Enforcement Initiative

Establishment of a joint task force with the State Land and Mines Office (PTG) to monitor the completion of special buildings and assist the PTG in carrying out enforcement actions against developers who fail to apply for strata titles.

Proposed Solutions to Special Building Issues

TKHS Contribution Towards Assisting Strata Title Applications for Special Buildings

The establishment of this fund reflects the Government's commitment—in collaboration with the private sector and participating agencies or organizations acting out of corporate social responsibility (CSR)—to address the challenges faced by the public. Through the resources provided by this fund, costs associated with strata title applications—which ought not to burden unit owners—can be partially or fully covered.

Benefits of TKHS Contributions

• A direct 100% tax deduction from the LHDNM pursuant to subsection 44(6) of the Income Tax Act 1967.

• Assisting residents of specific residential buildings—particularly those in low- and medium-cost housing—to obtain strata titles.

• The resolution of strata title registration for special buildings will facilitate real estate transactions involving such buildings.

• enables the establishment of a Management Corporation (MC) to facilitate the management and administration of the strata residential building.

• The process of distributing the estate of a deceased homeowner to the buyer can also be easily resolved.