Can the JMB or MC Block the Access Card of an Owner Who Has Arrears?

In strata management, the issue of blocking access cards is often one of the most sensitive issues.

When an owner does not pay maintenance charges or has substantial arrears, the management body may consider several measures to encourage payment. One measure that is often discussed is the blocking of access cards.

However, this issue should not be viewed too simplistically.

Blocking an access card involves a balance between the rights of the owner, the responsibility to pay charges, building security, use of common property, by-laws and the powers of the management body.

Therefore, before any access card restriction is implemented, the Joint Management Body, Management Corporation, committee members and property manager should understand the position carefully.

1. Why Does the Access Card Issue Arise?

The access card issue usually arises when there are owners with arrears in maintenance charges or sinking fund contributions.

The management body may face financial pressure if many owners do not pay their charges. In such a situation, building services may be affected, including security, cleaning, lift maintenance, utility bills, repairs and daily operations.

For this reason, the management body may look for more effective measures to address arrears.

Access cards become an issue because they are directly connected to the use of facilities, entry points and the building’s security system.

However, blocking access cards is not merely an administrative issue. It may give rise to legal disputes if not done properly.

2. What Is the Function of an Access Card in a Strata Development?

Access cards are usually used to control access to certain areas in a strata development.

The functions of an access card may include:

a. access into the building area;

b. access into the parking area;

c. access to lifts;

d. access to certain floors;

e. access to the lobby;

f. access to the gymnasium;

g. access to the swimming pool;

h. access to the multipurpose hall;

i. access to shared facilities; and

j. security control for occupants.

In many developments, access cards are not merely additional conveniences. They are also part of the building’s security system.

For this reason, the type of access being restricted must be clearly identified. Restricting access to recreational facilities may have a different effect from restricting access to a residential unit.

3. Can an Access Card Be Automatically Blocked If There Are Arrears?

As a matter of principle, the management body should not assume that an access card can be automatically blocked merely because an owner has arrears.

Every action must have a clear basis.

Matters that should be considered include:

a. whether the by-laws allow such action;

b. whether there is a valid meeting decision;

c. whether notice has been given to the owner;

d. the amount of arrears;

e. the period of arrears;

f. the type of access intended to be restricted;

g. whether the restriction is reasonable;

h. whether the restriction affects basic access to the unit;

i. whether internal procedures have been complied with; and

j. whether the action can be defended if challenged.

A restriction made hastily or without proper procedure may create risk for the management body.

4. Distinguishing Basic Access From Access to Facilities

In access card issues, an important distinction is between basic access and access to facilities.

Basic access refers to access required by an owner or occupant to enter his or her residential unit or premises.

Access to facilities refers to the use of shared facilities such as the swimming pool, gymnasium, multipurpose hall or other recreational facilities.

Restricting access to facilities may be easier to justify compared to a restriction that prevents an owner or occupant from entering his or her own unit.

For example, restricting the use of the gymnasium or swimming pool due to arrears may involve different considerations from restricting lift access to the floor of an owner’s unit.

The management body must be careful to ensure that the action taken is not excessive or unreasonable.

5. Why Is Procedure Important Before Restriction Is Imposed?

Procedure is very important because access card restriction can directly affect owners and occupants.

Before action is taken, the management body should usually ensure that the owner has been informed of the arrears, given an opportunity to clarify the position and given reasonable notice before further action is taken.

Steps that should be considered include:

a. issuing an updated statement of account;

b. issuing payment reminders;

c. issuing a demand notice;

d. stating the amount of arrears clearly;

e. stating the period for payment;

f. informing the owner of possible further action;

g. checking whether payment has been made;

h. keeping communication records; and

i. ensuring that the decision is made by the party with authority.

Action taken without notice or without clear records may be disputed.

6. What Are the Risks If Restriction Is Made Without Proper Basis?

If access card restriction is made without proper basis, several risks may arise.

The risks include:

a. the owner challenging the action;

b. the dispute being brought to the relevant authority or dispute resolution forum;

c. the management body being accused of acting unreasonably;

d. the action being alleged to unlawfully affect the owner’s rights;

e. the relationship between the owner and the management body becoming more strained;

f. the management body facing a counterclaim; and

g. the arrears issue becoming more difficult to resolve.

In some cases, an action originally intended to recover arrears may turn into a larger dispute if procedure is not followed.

Therefore, the management body must assess not only whether the action is effective, but also whether it is lawful, reasonable and defensible.

7. Can an Owner Use Arrears as a Reason Not to Follow the Rules?

No.

If an owner has arrears, the owner must still comply with the by-laws and building rules.

At the same time, if an owner disagrees with the charges imposed or the action taken by the management body, the owner should not act in a manner that affects the management of the building or the rights of other owners.

The owner should use the proper channels, such as checking the statement of account, seeking clarification, attending meetings, raising issues formally or obtaining appropriate advice.

The existence of a dispute does not necessarily mean that the owner may stop paying charges that have been lawfully imposed.

In strata living, rights and responsibilities must operate together.

8. What Should the Management Body Do Before Blocking an Access Card?

Before considering access card restriction, the management body should carry out a proper assessment.

Matters to be checked include:

a. the actual amount of arrears;

b. the period of arrears;

c. the owner’s statement of account;

d. relevant invoices or bills;

e. demand notices issued;

f. records of service of notices;

g. relevant minutes of meetings;

h. by-laws;

i. meeting decisions authorising the action;

j. the type of access to be restricted;

k. the effect of the restriction on the owner or occupant; and

l. whether there are more suitable alternative steps.

The management body must also ensure that action is taken consistently. If action is taken selectively against certain owners without reasonable grounds, it may give rise to allegations of unfairness.

9. What Are the Alternatives to Blocking Access Cards?

Blocking access cards is not the only measure to address arrears.

Alternatives that may be considered include:

a. payment reminders;

b. demand notices;

c. settlement discussions;

d. instalment payment arrangements where appropriate;

e. letters of demand from solicitors;

f. claims in the appropriate forum;

g. obtaining an award or judgment;

h. enforcement action after an award or judgment; and

i. other permitted administrative measures.

In many situations, a claim supported by complete records may be stronger than a restriction imposed irregularly.

However, each case must be assessed based on its own facts and documents.

10. What Should an Owner Do If an Access Card Is Blocked?

If an access card is blocked, the owner should not react emotionally or take matters into his or her own hands in a way that may worsen the situation.

More appropriate steps include:

a. obtaining a written explanation from the management;

b. requesting an updated statement of account;

c. checking the actual amount of arrears;

d. checking notices previously given;

e. reviewing the by-laws and relevant rules;

f. discussing the matter with the management;

g. making payment or proposing a settlement if the arrears are genuine;

h. raising a formal objection if the action is disputed; and

i. obtaining advice where necessary.

The owner should also distinguish between challenging the restriction and the responsibility to pay charges that have been lawfully imposed.

If arrears do exist, the payment issue must still be resolved.

11. Conclusion

Access card restriction is a sensitive issue in strata management.

The management body must be careful before imposing restrictions against an owner who has arrears. Such action must have a clear basis, be supported by documents, be consistent with the by-laws, be taken according to proper procedure and be reasonable based on the facts.

At the same time, owners must understand that maintenance charges and sinking fund contributions are basic responsibilities in a strata development.

Owners cannot ignore charges lawfully imposed and at the same time expect all building facilities and services to continue without interruption.

In strata management, the best solution is a balanced approach: owners should fulfil their responsibility to pay charges, and the management body should act lawfully, transparently and according to proper procedure.

Prepared by:
Khairul Shahrizan bin Hamizi
Advocate and Solicitor
High Court of Malaya

Brief Note

This article is prepared for general information only and should not be treated as specific legal advice. Each issue involving access card restriction must be considered based on its own facts, amount of arrears, type of access restricted, notices, minutes of meetings, by-laws, communication records and the applicable laws.