Peter has been married for a couple of years and he
has four young children. He is now looking for a landed property to
purchase that is nestled in a green lung area with superior
infrastructure, landscaping, facilities and amenities. Most important to
him is that the property he intends to purchase must be in a housing
scheme that will give him and his family the security and peace of mind.
In short Peter wants to purchase a property in a gated and guarded
community.
Introduction
A gated community in Malaysia is
generally focused on the need for a safer community with secured and
guarded surroundings. In our residential development sector we see
advertisements almost daily, exhorting the virtues of gated and guarded
housing schemes or gated community as they are commonly called as a new
privatized way of life.
Property developers today are reinvesting
themselves in response to needs of an increasingly affluent population,
keeping pace with the rapid changes in trends and consumer preferences
in order to thrive. What has happened is that property developers have
managed to creating a safe community through the provisions of security
and exclusivity as part of a community’s lifestyle.
Although some
housing schemes are not categorised as gated and guarded schemes,
residents have nevertheless taken steps to restrict access of the
general by setting up guard posts with the hope of preventing and
reducing crime in the area. Usually some form of physical barrier
surrounds the boundaries to the housing estate where residents employ
private security to provide security services. This often involves an
attempt to restrict or regulate public spaces privately by erection of
barriers on public needs, guardhouses, etc.
In the Malaysian
context, a gated community may refer to a cluster of houses or buildings
that are surrounded by a wall or fence on a perimeter with entry or
access of houses or buildings controlled by certain measures of
restrictions such as guards, boom gates or barriers which normally
includes 24 hour security, guard patrols, central monitoring systems and
closed circuit televisions (CCTV) cameras.
Nevertheless there
are certain gated and guarded communities in Malaysia offering more than
security. Guarded communities such as Kajang Country Heights,
Sierramas, Tropicana and The Mines are examples of contemporary housing
schemes boasting common facilities such of golf courses, club houses and
recreation areas. The emphasis in these guarded community are the
combination of security, privacy and the affluent lifestyle of its
residents.
Main Attractions of Gated and Guarded Community
The
main attractions of gated and community is security, lifestyle and the
protection of property values. There are also clear development
guidelines for individual style homes which helps to keep house designs
at an acceptable standard without too much homogeneity.
One very
important feature of a gated community is that the building standards
are more flexible and as such enables more efficient land utilization.
For example removing the necessity for walled boundaries and fences.
Better
quality “public” services, such as garbage removal and park maintenance
can be expected as these jobs are privatized, leaving local authorities
to concentrate on the provision of other aspects.
Gated
communities are perceived as the answer or deterrent to crime, which is
becoming more challenging to manage day by day. As part of a lifestyle,
gated communities also provide the “niceness” of enjoying privacy and
peace of mind, and perhaps homogeneity of the population within the
community.
Liability of the Developer for Misrepresentation
A
developer is legally bound by law to deliver a certificate of title to
his purchasers and may be guilty of misrepresentation or breach of
contract if he is unable to do so. In a gated community apart from the
sale and purchase agreement, an agreement known as a Deed of Mutual
Covenants (DMC)) would also be signed between the purchaser and the
developer. Under the DMC all rights and responsibilities of purchasers
and developers will be spelled out including matters related to the
usage of the common properties, payment of maintenance fees, security
services as well as the running of the management company. In theory the
gated community concept depends on the principle of mutual consent of
parties to the contract. Thus any non-compliance with the contract will
enable the innocent party to initiate civil action.
In the
absence of clear provisions as to how the gated community scheme should
be implemented, purchasers would have to challenge the validity of
certain exemption clauses that tend to exclude liability of developers.
For instance, developers may routinely inform purchasers that their
gated community schemes offer 24 hour security but at the same time if
the DMC contains a clause that the developer could not be liable for any
act of theft, purchasers may challenge such clause as invalid. In law,
the fundamental terms of a contract cannot be abrogated by exemption
clauses. Thus if security is regarded as a fundamental term in a gated
community, any exemption that amounts to an escape clause excluding
liability of the developer may be challenged by purchasers.
Legality of Gated and Guarded Communities
It
is unlawful to privately attempt to restrict or regulate public spaces
without the approval of the relevant authority. Any attempt to close,
barricade or restrict the access of a public road, drain or space, there
may be a contravention of Sections 46(1) of Street Drainage and
Building Act 1974, Section 80 of the Road Transport Act 1987 and
Section(s) 62 and 136 of the National Land Code 1965. In addition,
provisions of the Town and Country Planning Act 1976 may also be
violated where guard houses are built in the public land or road
shoulders. For example, Section 46(1) of the Street Drainage and
Building Act 1974 provides that any person can be held liable if he:-
a. builds, erects, set up to maintain or permit to be built, erected or set up or maintained any wall,
fence, rail, or any accumulation of any substance, or other obstruction, in any public place;
b. without the prior written permission of the local authority, covers over or obstructs any open drain
or aqueduct along the side of any street;
There
is no problem with private security patrolling public roads in a
housing scheme under the employment of the residents’ associations.
Nevertheless, the local authority and the police should be consulted
first. It has to be noted that erecting structures to restrict access to
public roads or guardhouses is another matter and would violate the law
unless the relevant authority gives its approval to do so.
In
recognition of a growing problem of security, various local authorities
and state governments have issued guidelines for guarded communities.
These guidelines do allow erection of guard houses and the employment of
private security based on the consent by the residents in the area
affected.
For example, in Selangor, the Housing and Property
Board and the local authorities allow guard houses to be built based on
certain guidelines amongst which include:-
· Applications made through the Resident Association (RA) only;
· Consent by 85% of the residents;
· Agreement must be made between RA and local authority;
· Guard house without a barrier are allowed and the location should not obstruct traffic (situated at
road shoulder only);
· A written consent from Local Authority and Land Administrator (LA) for the construction of guard
house on reserved road/vacant land must first be obtained;
· Appointed security guards must be registered with Ministry of Home Affairs or with other relevant
agencies;
The
authorities do sometimes “turn a blind eye” to allow some form of
limited barriers so long as it is backed by an overwhelming support of
the local residents and it does not deny access nor unduly obstruct
traffic.
Planning Requirements
A developer may elect
to proceed with subdivision of land under the National Land Code 1965,
or subdivision of land into land parcels to be held under strata titles,
under the Strata Titles Act 1985. Even if a developer chooses to
subdivide the land under the Strata Titles Act 1985, it does not
necessary mean that the developer can develop a gated and guarded
scheme. Planning law requirements as well as the State Authority have
set out strict guidelines for approving gated and guarded schemes. These
guidelines also take into account socio-economic factors in determining
whether to allow gated and guarded schemes.
Recent Amendment to the Law
The
law governing development of land involving the construction of a
building having two or more storey on alienated land held under one lot
is governed by the Strata Titles Act 1985. This is probably the reason
why a few property developers have adopted the Strata Title Act for
their development of the gated community scheme. The problem that would
however arise is when the land development of the gated community scheme
involves the construction of buildings that are not feasible to be
sub-divided into parcels as provided in the Strata Title Act. For
instances bungalow houses, semi-detached houses, double and single
storey houses.
The recent amendments to the Strata Titles Act
1985 (with effect from April 12th , 2007) by the Strata Titles
(Amendment) Act 2007 now allows a gated and guarded communities to be
statutorily created and regulated more effectively like other types of
strata schemes. As such, land parcels with buildings are no longer
needed to be governed by the Strata Titles Act, in the same way as a
high-rise building if a developer chooses to do so. This means that for
the purposes of the Strata Titles Act 1985, land parcels with buildings
can in certain circumstances be treated like a multi-storey building
lying down on its side. There are several important qualifications
though.
The effect of the Strata Titles (Amendment) Act 2007, is
that only buildings of not more than four storey may be erected on the
land parcels intended to be subdivided and held under separate strata
titles, or an accessory parcel.
Furthermore, any DMC entered into
between the developer and a purchaser of a parcel in a gated and
guarded community scheme agreement can be now easily enforced by the
bylaws under the Strata Titles Act 1985.
The enforcement and
management can now also be carried out under the Building and Common
Property (Maintenance and Management) Act 2007, when the Management
Corporation has not come into existence. This is a huge step forward
from the past practice which was problematic to say the least.
Conclusion
The
development of gated and guarded community schemes in Malaysia now
seems to be part of the features of the housing industry. It is
undoubtful that most of these schemes are of the high cost residential
types that will be attractive to developers due to higher returns and
the increasing demand from the market, especially in the urban areas
like Kuala Lumpur, Shah Alam, Penang and Johore Bahru.
Finally,
it must be understood and appreciated that all purchasers of houses in a
gated and guarded community will have to pay considerably higher
charges for the maintenance, sinking fund, security fees, electricity
and water and other services because the cost of all facilities within
the boundary of gated and guarded community will have to be borne by
them in addition to the usual quit rent and assessment rates levied by
the local authorities
ABOUT THE AUTHOR: Stanley Gabriel
The author is the Head of
the Conveyancing Department in Messrs Jayadeep Hari & Jamil. Having
been in legal practice for over 12 years, he has vast experience in
matters concerning real estate and probate.
Copyright Jayadeep Hari & Jamil
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Disclaimer: While every effort has been made to ensure the
accuracy of this publication, it is not intended to provide legal advice
as individual situations will differ and should be discussed with an
expert and/or lawyer. For specific technical or legal advice on the
information provided and related topics, please contact the author.
