How to Enforce a Strata Management Tribunal Award

In the previous article, we discussed what happens after the Strata Management Tribunal gives an award.

A Tribunal award is not merely a decision on paper. Under section 120 of the Strata Management Act 2013, a Tribunal award is final and binding on the parties to the proceedings.

However, in practice, problems often arise when the losing party does not comply with the award.

For example, the Tribunal may have ordered an owner to pay arrears of maintenance charges. But after the award is given, the owner still does not make payment.

In such a situation, the successful party must understand the enforcement steps that may be taken.

This article provides a simple explanation of how a Strata Management Tribunal award may be enforced, why the enforcement time limit is important, and why JMBs, MCs and owners should not leave an award unattended for too long.

1. What Does It Mean to Enforce a Tribunal Award?

To enforce an award means to take legal steps to ensure that the Tribunal award is complied with.

If the award orders payment of money, enforcement aims to recover the amount ordered.

If the award orders an act to be done, enforcement aims to ensure that the act is carried out.

If the award orders an act to stop, enforcement aims to ensure that the losing party stops doing that act.

In other words, a Tribunal award must be translated into actual action.

Winning at the Tribunal is one thing. Ensuring that the award is complied with is another.

2. A Tribunal Award Is Final and Binding

Section 120 of the Strata Management Act 2013 provides that a Tribunal award is final and binding on the parties to the proceedings.

This means that the parties involved in the Tribunal claim must comply with the award given.

A Tribunal award is not merely an administrative view, advice or recommendation. It is a decision with legal effect.

Therefore, if the Tribunal directs a party to pay a certain amount, do a certain act, stop doing a certain act or comply with a particular direction, that party must take the award seriously.

Failure to comply with the award may open the door to enforcement action.

3. First, Check the Contents of the Award

Before taking enforcement steps, the successful party should read the award carefully.

Matters to be checked include:

a. the name of the successful party;

b. the name of the party directed to comply with the award;

c. the amount payable, if the award involves money;

d. the act required to be done;

e. the act required to be stopped;

f. the period for compliance;

g. the date of the award; and

h. any specific conditions in the award.

This step is important because enforcement must be consistent with what the Tribunal actually ordered.

Do not enforce something that is not stated in the award.

4. Wait Until the Compliance Period Ends

If the award gives a specific period for compliance, the successful party should generally wait until that period has expired.

For example, if the Tribunal orders payment to be made within 14 days, the successful party should check whether payment is made within that period.

If the period expires and the losing party still does not comply with the award, follow-up action may be considered.

However, the successful party should not wait too long after the compliance period has expired.

In strata management, delay in enforcing an award may cause arrears to increase, records to weaken and other owners to lose confidence in the management body.

5. Send a Follow-Up Letter After the Award

Before commencing more formal enforcement steps, the successful party may send a follow-up letter to the losing party.

The letter may state:

a. that a Tribunal award has been given;

b. the date of the award;

c. the amount or direction to be complied with;

d. that the compliance period has expired;

e. that the award has not been complied with;

f. a request for immediate compliance; and

g. a warning that enforcement action may be taken if the award remains uncomplied with.

This follow-up letter is important as a record.

It shows that the successful party has given the losing party a reasonable opportunity to comply with the award before further action is taken.

6. Record the Non-Compliance

If the award is not complied with, the non-compliance should be clearly recorded.

Documents to be kept include:

a. a copy of the Tribunal award;

b. the follow-up letter after the award;

c. proof of service of the letter;

d. the latest statement of account;

e. payment records, if any;

f. communication records;

g. photographs or evidence of the current condition, if the award involves a non-monetary direction;

h. minutes of meetings relating to follow-up action; and

i. documents recording advice or further instructions, if any.

Complete records are important because enforcement requires evidence.

If the management body does not keep proper records, the enforcement process may become more difficult.

7. Time Limit for Enforcing an Award: 12 Years

One important point that JMBs, MCs and owners must understand is that a Tribunal award should not be left unattended for too long.

Generally, an award which has the effect of a judgment must be enforced within 12 years.

However, from a practical perspective, this 12-year period should be divided into two important phases.

The first phase is from the first year to the sixth year after the award is given.

During this period, the award may generally be enforced without first obtaining prior leave of court.

The second phase is from the seventh year to the twelfth year after the award is given.

During this period, the party seeking to enforce the award would generally need to obtain prior leave of court before enforcement steps may proceed.

An application for leave is not a mere formality.

The applicant must explain why the award was not enforced within the first six years.

If there is no strong justification, the court may refuse to grant leave.

Therefore, although the maximum enforcement period may extend up to 12 years, the successful party should not wait too long.

From a strata management perspective, enforcement action should be taken as early as possible once the losing party fails to comply with the award.

8. Enforcement Within the First Year to the Sixth Year

Within the first six years after the award is given, the successful party is in a better position to enforce the award.

Generally, enforcement during this period may proceed without first obtaining prior leave of court.

This does not mean enforcement happens automatically.

The successful party must still take the correct steps, prepare sufficient documents and use the appropriate procedure.

However, from a timing perspective, the first year to the sixth year is the safest and most practical period to act.

For JMBs and MCs, this means that an arrears award should not simply be kept in a file without action.

If the owner does not pay after the award, follow-up action should be taken promptly and systematically.

9. Enforcement Within the Seventh Year to the Twelfth Year

If an award is only sought to be enforced after more than six years, the position becomes more difficult.

From the seventh year to the twelfth year, the party seeking to enforce the award must apply for prior leave of court.

The court will consider why the award was not enforced earlier.

If the reason for the delay is unsatisfactory, the court may refuse the application.

For example, reasons such as 'we forgot', 'we did not have time', 'we did not know enforcement was required' or 'the file was not managed' may not be sufficient, depending on the circumstances.

The applicant must show strong and reasonable justification.

For this reason, JMBs and MCs should have a system for monitoring awards. Every award obtained should be recorded, monitored and acted upon within the appropriate time.

10. Enforcement of a Monetary Award

If the award involves payment of money, such as arrears of maintenance charges or sinking fund contributions, the objective of enforcement is to recover the amount ordered.

In certain circumstances, the award may be brought to the court channel for enforcement purposes.

After that, suitable enforcement steps may be considered based on the amount owed, the ability of the losing party to pay, known assets and the cost of action.

For a JMB or MC, a practical example is an award directing an owner to pay arrears of maintenance charges.

If the owner fails to pay, the management body should consider whether enforcement steps should be taken promptly.

The enforcement of a monetary award should be approached strategically. Sometimes the amount claimed may be small, but the principle of collection and payment discipline is important to the finances of the building.

11. Enforcement of a Non-Monetary Award

Not every Tribunal award involves payment of money.

Some awards direct a party to do something or stop doing something.

For example:

a. stop causing disturbance;

b. comply with the by-laws;

c. allow access;

d. provide documents;

e. repair damage;

f. restore a certain condition; or

g. stop improper use of common property.

Awards of this nature may require a different enforcement approach.

The successful party must carefully check what the Tribunal directed and what form of non-compliance has occurred.

Supporting documents such as photographs, reports, communication records and evidence of the current condition may be very important.

If a non-monetary award is not complied with, early legal advice is usually required because the form of enforcement may be more technical than enforcement of a monetary award.

12. Is It Necessary to File a Fresh Claim?

Generally, if the same issue has already been decided by the Tribunal and an award has been given, the successful party does not necessarily need to file a fresh claim from the beginning.

The more appropriate step is usually to take follow-up or enforcement action based on the existing award.

However, this depends on the circumstances.

If a new issue arises after the award, or if new arrears accrue after the period decided by the Tribunal, a fresh claim may need to be considered.

For example, if the award only covers arrears up to a certain date, arrears after that date may need to be addressed separately.

Therefore, it is important to distinguish between:

a. enforcement of an existing award; and

b. a fresh claim for a different issue or period.

13. Consequences If an Award Is Not Enforced

If an award is not enforced, several problems may arise.

For a JMB or MC, the consequences may include:

a. arrears continuing to increase;

b. other owners feeling that action is inconsistent;

c. payment discipline becoming weaker;

d. the building’s finances being affected;

e. claim records becoming old;

f. enforcement becoming more difficult after six years; and

g. the management body appearing not to be serious in taking action.

In strata management, the collection of charges is very important.

If an arrears award has been obtained but is not enforced, the award gives no real benefit to the building.

An unenforced award may eventually become nothing more than a document in a file.

14. When Should Legal Advice Be Obtained?

Legal advice should be considered when:

a. the award is not complied with after the compliance period expires;

b. the award amount is substantial;

c. the award is approaching six years;

d. the award has exceeded six years;

e. the losing party refuses to cooperate;

f. the award involves a non-monetary direction;

g. there is a technical issue in the award;

h. new arrears have accrued after the award;

i. the losing party is insolvent or in liquidation; or

j. the management body is unsure of the correct enforcement procedure.

The earlier advice is obtained, the easier it is to plan an enforcement strategy.

15. Conclusion

A Strata Management Tribunal award is final and binding under section 120 of the Strata Management Act 2013.

However, the award must be complied with or enforced.

If the losing party does not comply with the award, the successful party should take appropriate follow-up steps. These include checking the award, waiting for the compliance period to expire, sending a follow-up letter, recording non-compliance and considering enforcement.

The most important point is the time limit.

Generally, an award must be enforced within 12 years. Within the first year to the sixth year, enforcement may generally proceed without prior leave of court. From the seventh year to the twelfth year, prior leave of court would generally be required and the delay must be justified.

If there is no strong reason why the award was not enforced within the first six years, the court may refuse leave for late enforcement.

Therefore, JMBs and MCs should not leave a Tribunal award unattended.

In strata management, winning at the Tribunal only matters if the award is actually complied with or enforced.

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 concerning enforcement of a Strata Management Tribunal award must be assessed based on the award, date of the award, type of order, length of delay, supporting documents, court procedure and applicable laws.