Introduction
The issue of whether a condominium management corporation or body can deny an owner’s right to attend the Annual General Meeting (AGM) on the ground that the title has not been perfected often arises in strata property practice. Legally, the position appears straightforward, only the registered proprietor of a parcel has the right to receive notice, attend, and vote at the AGM. However, in many developments, the practical reality is that many owners have yet to perfect their titles despite having paid the full purchase price and taken possession of their units. This article examines the legal position under the Strata Titles Act 1985 (STA) and the Strata Management Act 2013 (SMA), discusses relevant case law, and considers the commercial and practical implications of enforcing this rule strictly.
Legal Position
Under Section 4 of the STA, a “proprietor” is defined as the registered proprietor of a parcel. Until the title is perfected and the transfer is registered, the developer remains the legal proprietor of the unit, even though the purchaser has acquired equitable ownership through the sale and purchase agreement.
The SMA further limits rights of participation in management corporation meetings to registered proprietors. Paragraph 12(1) of the Second Schedule requires that the notice of an AGM be served on every proprietor, while paragraph 15(1) provides that the quorum must consist of at least half of all registered proprietors, either present in person or represented by proxy. These provisions collectively establish that the right to attend and vote at the AGM is reserved for registered proprietors only.
Judicial Interpretation
The High Court in Tham Sau Hoong v Perbadanan Pengurusan Pantai Emas Resort [2021] 1 LNS 56 confirmed this interpretation. The Court held that a purchaser who had not perfected his title was not entitled to attend or vote at the AGM because he was not yet a registered proprietor under the SMA. The decision makes it clear that only individuals whose names appear on the strata title register are recognized by law as proprietors with statutory rights to participate in meetings.
In view of this, management corporations act within their legal rights when they restrict attendance at AGMs to registered proprietors. Such exclusion is not discretionary but arises directly from the statutory framework.
Commercial and Practical Implications
While the legal position is unambiguous, the strict application of this rule often leads to practical difficulties. In many developments, delays in strata title issuance and the perfection of titles are common. Some purchasers postpone the process due to cost considerations or administrative inconvenience. As a result, it is not unusual for a substantial number of units in a condominium to remain under the developer’s name for several years after completion.
From a practical standpoint, excluding purchasers who have not perfected their titles can be problematic. These owners are typically the ones paying maintenance charges, using the common property, and directly affected by management decisions. Preventing them from participating in AGMs may lead to dissatisfaction, a sense of exclusion, and reduced engagement in the management of the condominium. Over time, this may undermine transparency and cooperation between owners and the management body.
On the other hand, allowing unregistered purchasers to attend and vote without legal authority could render the AGM and its resolutions invalid, as the quorum and voting requirements under the SMA would not be properly constituted. This exposes the management corporation to potential legal challenges. Therefore, there is a need to balance legal compliance with practical and commercial considerations.
Practical Solutions
There are two possible approaches to navigate around the denial to attend the management body AGM.
First, the registered proprietor, developer, may appoint the purchaser as a proxy under paragraph 18(1) of the Second Schedule to the SMA. This arrangement allows the beneficial owner to attend and participate in the AGM lawfully.
Second, management bodies and developers should encourage purchasers to perfect their titles as soon as possible. In some cases, facilitating collective applications for title perfection can expedite the process and ensure that ownership records reflect the true state of occupation. This not only strengthens governance but also ensures that all owners have a clear legal basis to exercise their rights.
Conclusion
In conclusion, the management corporation is legally entitled to deny an owner the right to attend the AGM if the title has not been perfected. The law recognizes only registered proprietors as having the right to receive notice, attend, and vote. However, from a commercial perspective, it is beneficial for management to adopt practical solutions that promote inclusivity, such as allowing attendance through proxies or assisting owners in perfecting their titles. Ultimately, while legal certainty is essential, effective condominium management depends equally on fairness, transparency, and active owner participation.
Pravin is a contributor covering legal insights with a focus on making sense of Malaysia’s evolving legal and regulatory landscape through practical and accessible analysis. More about Pravin.
This article was contributed and sponsored by Kevin Wu & Associates, a full-service law firm based in Kuala Lumpur with practice areas in corporate, dispute resolution, criminal, family office and company secretarial services. KWA offers preliminary consultation and legal advisory to all Temasek Post readers.
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