Who Owns The Surplus Parking Spots On A Development?

• Published date: 03 February 2023
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Trials & Appeals & Compensation, Real Estate
• Law Firm: Gan Partnership
• Author: Ms Tasha Lim Yi Chien

Introduction

With the rise in land and property prices, many have chosen to live in condominiums where there are common properties and facilities shared between the residents, such as swimming pools and children's playgrounds. In a recent case - Sri Keladi Sdn Bhd (in liquidation) v Bukit OUG Condominium Joint Management Body ¹ - the Court of Appeal was presented with an appeal against a High Court decision which ruled that the surplus carparks built within the development formed a part of the common property of the development.

Facts

The appellant was a housing developer who had been entrusted to develop the Bukit UOG Condominium, while the respondent was the joint management body responsible for managing the common property of the development.

After the appellant was wound up, an audit exercise was carried out and it was revealed that 149 of the parking spots at the development were surplus and unaccounted for. The liquidator then advertised the sale of the parking spots. This prompted the respondent to initiate an action claiming the 149 surplus parking spots as common property of the development given that the strata titles had yet to be issued.

High Court

The High Court judge decided that the respondents had proven that the 149 surplus parking spots were part of the property and an asset of the development. In coming to this decision, the Court decided that the parcel owners' rights were governed by the sale and purchase agreements (SPAs) as these were signed before the Building and Common Property (Maintenance and Management) Act 2007 (BCPA) came into force. As such, the BCPA was not applicable.

Upon perusing the SPAs, the Court decided that the definition of the words "common property", "parcels" and "accessory parcels" in the SPAs meant that the appellant could not claim the parking spots. Thus, as the parking spots did not belong to the appellant, they had no right to sell them.

Court of Appeal

The Court of Appeal had to decide on two issues:

• What was the instrument or document governing the ownership of the parking spots?
• Would the parking spots fall under the definition of "common property" under the SPAs?

First issue

The parties were not in dispute that the SPAs should be the instrument or document used to determine the ownership of the parking spots. The Court of Appeal also referred to another court case - Perantara Properties Sdn Bhd v JMC-Kelana Square & another appeal² - in agreeing that the determination of the parking spots would...