Challenges in forming the subsidiary management corporation: Malaysian experience

Abstract

The popularity of strata development in Malaysia have seen the promotion of mixed development and usages that need to be managed efficiently to ensure living within a strata scheme is pleasant. Within a mixed development that consists of different components, some common facilities are made available only to a certain group of owners. The Strata Management Act 2013 (Act 757) introduced the establishment of subsidiary management corporation to manage the limited common property which could help to resolve the issues in managing the different types of users in a mixed or integrated strata development. Act 757 provides for the establishment of subsidiary management corporation which enables proprietors to exclusively enjoy limited common property. However, to date, the establishment of subsidiary management corporation in Malaysia is unpopular since the establishment depends on the initiatives of the management corporation (MC). This research adopts quantitative method to analyse the formation of subsidiary management corporation as well as the challenges faced in the process. A total of 187 respondents were chosen for this study based on the relevance of the organisation. The findings revealed that the main challenges hindering the formation of subsidiary management corporation is the lack of knowledge on the procedure for forming subsidiary management corporation on the part of the MC, the willingness of the MC; the requirement to pass the comprehensive resolution and defining of boundaries under the special plan. The research ends with proposed solutions to overcome the challenges.