Mixed-use projects provide owners with the advantage of integrating various amenities and functions within one development, yet their detailed design can complicate management. The presence of multiple owners across diverse sections can significantly complicate governance, particularly in areas like cost distribution, shared amenities, and operational guidelines.
Low Hon Keong, managing director of Henry Butcher Malaysia (Mont Kiara) Sdn Bhd (HBMK), stresses that a mixed-use development requires all components to be equally represented within the management corporation (MC). Unlike single-component projects, which typically have MCs with three to five members, mixed-use developments thrive with a more extensive committee ensuring each part has a voice.
Proactive Governance
Low highlights that adequate representation enables property managers to address concerns from various components promptly. Inadequate representation prolongs issue resolution. Property managers typically must bring matters to the MC, collect input, and perform inspections. Full component representation on the MC bolsters the manager’s proposals to the committee.
A key challenge in managing mixed-use developments involves allocating maintenance expenses among components. HBMK employs a two-level system: the first level covers shared infrastructure and services, while the second level applies solely to facilities utilized by individual components.
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Low points out that the challenge lies in ensuring owners comprehend cost calculations and the associated expenses, not in the two-tier method itself. He advises addressing cost-related concerns through formal forums like AGMs, EGMs, or committee sessions, with meeting records available to all owners.
Responsibility for facilities, as well as the costs of maintaining them, should also be clearly established from the outset. Low recalls taking over developments where the structure of the maintenance fee had to be reworked because responsibilities for shared facilities had not been properly separated between components.
Clear Rules and Transparency
Regulations need to align with each component’s operational needs, as a one-size-fits-all house rule may spark conflicts in mixed-use projects.
Back-of-house shared facilities demand explicit regulations, enforced uniformly from the start. Implementing penalties after residents have grown used to lax enforcement can lead to issues. Owners often remain unaware of behind-the-scenes actions like security patrols, CCTV surveillance, lift inspections, and fire system checks.
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Low emphasizes the importance of transparency in ensuring proactive governance, saying, “The moment we have transparency, many of the misunderstandings as well as potential disputes will go away.” Owners do not always see the work carried out behind the scenes, from security patrols and CCTV monitoring to lift inspections and fire-system checks.
Without visibility into these activities, questions can quickly arise over how maintenance fees are spent and whether concerns are being addressed. Low notes that if there is enough transparency and good communication, those negative perceptions will go away, and owners will be more likely to understand the work being done to maintain their development.
Low also highlights the need for communication and consistency in enforcing rules, even when decisions are unpopular. As a property manager, he says, “We don’t need to be popular at all. A lot of the time, what we do is unpopular,” but it is essential to follow the decisions of the joint management body (JMB) or MC and carry out duties under the strata legislation.
Low’s comments come as part of a six-part series of articles on mixed-use developments, in collaboration with City & Country and HBMK. The series aims to provide a deeper understanding of what it takes to maintain these complex developments, and Low’s insights offer valuable guidance for owners, property managers, and developers alike.
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Low notes that in older buildings, issues with the mechanical and electrical (M&E) systems often arise, making it challenging to manage shared facilities. He says, “We have this challenge of open services, where the electrical infrastructure is shared. So, when we shut down the power to recalibrate one component, it can inadvertently affect the other components because there is no clear line marking where one component’s responsibility ends and the next begins.”
Low notes that density is a key factor in governing mixed-use developments, cautioning against developments with too many units. This can lead to issues with the different needs of occupants, from elderly residents to newborns, being considered.
Establishing Clear Responsibilities
Clear rules are also needed for shared back-of-house facilities, such as loading bays and waste disposal areas.
Renovation periods and extension approvals can help prevent work from spilling over into neighboring areas.
