Speaking to FMT, HBA honorary secretary-general Chang Kim Loong said residences with an abundant number of unoccupied homes would have problems forming joint management bodies, or management corporations in the case of stratified properties.
“The everyday running of these management bodies will be a challenge if the properties are not occupied.
“Furthermore, the cost of management and maintenance will be an issue if the owners of the unoccupied properties do not diligently pay their dues.”
Chang said if insufficient funds were collected, the property might become a slum and if this were to be the case with a group of properties in the same area, it would “consequently appear to be a ghost town”.
He was commenting on a report by FMT quoting veteran property consultant Ernest Cheong as saying he feared there would not be enough people to occupy the thousands of houses and commercial buildings being constructed in Johor.
Chang said a slum was a reality that one had to face when the number of occupants could not support at least 75% of contributions towards maintenance fees.
This 75% he said was the minimum amount of contributions needed for a management body to function effectively.
He said the facilities at many condominiums and apartments were expensive to maintain.
“This includes lifts, swimming pools, gymnasiums, tennis courts, landscaped gardens, and not forgetting, security services.
“In fact, some condominium owners are required to pay service tax on the monthly maintenance fees,” he said, adding this was why the timely collection of maintenance fees was crucial.
Chang said if owners did not pay the maintenance fees on time the burden would fall on the management bodies and their members – who were volunteers – to pursue the collections.
“If many of the buyers are foreigners who are buying these units for investment or to be used as holiday homes, and if they do not pay their maintenance fees, it would be an insurmountable feat for the management bodies to maintain the property.”
Chang also voiced concern that there might even be an increase in foreclosure proceedings against loan defaulters who had more homes then necessary.
“This is especially a concern for foreign house buyers who have a number of properties in cities around the globe.”
Data from the National Property Information Centre show that developers in Johor plan to build more than 350,000 private homes in the state. Some of these are already under construction.