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Power Of Sale Applications Rise Under Amended Strata Law

Real Estate Board and Strata Commission Sandra Watson is pointing to an uptick in applications for the forced sale of residential units since the start of the year, under the new powers granted to strata executives.

Amendments to the strata law passed December 2013 allows strata corporations a shorter route to securing power of sale to recover maintenance fees from home owners who fall into arrears. However, Watson stopped short of linking the spike to the revised law.

There is so far no "statistical means to suggest that the spike in applications for POS is as a result of the changes in the legislation," she said, but noted that the amendments to the Registration (Strata Titles) Act will allow the strata corporations to recover maintenance fees more quickly.

The legislation also allows for "timely disposal" of strata units.

"It follows therefore that awareness of the legislation, not only by the strata corporations as a body but also by the individual proprietor, should foster greater compliance. The strata corporations are required to be determined to carry out their mandate to ensure the proper management of their development," Watson said.

The number of applications for power of sale certificates requested from the Strata Commission since the beginning of 2014 is up by 17 per cent, from 48 to 56.

Additionally, Watson said "a record number of applications" was filed in March, with 97 per cent of them originating from just three strata corporations. The residential complexes were not named.

There are 1,669 registered stratas in Jamaica - Stratas are typically apartment complexes, townhouse developments, and other gated communities whose owners share common facilities - according to National Land Agency (NLA) records to July 3.

Some 1,513 stratas or 91 per cent have been registered with the Commission of Strata Corporations as required by the strata law.

Maintenance fees are charged to individual owners of residences to cover the cost of common expenses, including insurance, which affects the ability of title holders to sell their properties to new owners by way of mortgage.

Watson said that while the Commission is unable to provide data on the level of coverage maintained by the strata corporations, "there is a prevalence of strata corporations unable to maintain adequate insurance coverage."

Major amendments

The main amendments to the strata law in December were centred on the process for an application for power of sale by the strata corporation and the subsequent disposal of the property, essentially making it easier for the managers of a complex to dispose of the units of delinquent owners.

Under a new inclusion, Section 5E(a) of the law, strata corporations may apply to the Registrar of Titles at NLA to have the original certificate cancelled and to issue a new certificate of title in the name of the purchaser, without input from the delinquent owner.

Before this, Watson said, "the Registrar of Titles required the duplicate certificate of title to be produced for registration of the transfer .... Significant challenges arose when the original proprietor failed to produce the certificate of title resulting in legal action being pursued to recover the duplicate certificate of title."

The process to dispose of the strata unit by power of sale was also simplified by the elimination of the requirement to apply to the court for an order of vacant possession.

The affected property can now be sold subject to a lease or even if it is occupied by the owner, Watson said.

There was also another amendment to Section 4(5) of the act to substitute the word corporation for commission to allow "for the proper administration of action through the courts, on the part of the Commission, to recover funds due and payable to the Commission," Watson said.