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Stabroek News

Jamaica's umbrella strata group in limbo
published: Sunday | June 17, 2007


Fr. Gerard McLaughlin, S.J., Contributor

The Parliament of Jamaica in 1969 approved the Strata Titles Act. Copied principally from the New Zealand legislation, the act gave ownership to the thousands of persons who choose to reside in high-rise attached units - that is, registered condominiums.

At that time, previous to the passage of the Bill, it was legal to issue titles only to properties attached to the ground. If the developer wished to construct multiple high-rise apartments he had only one choice - rental.

Thus, he was forced to withdraw his monies, invest them in theapartments and then wait some 20 years for collection - very expensive and too much trouble.

The strata concept (in the United States it is called condominium) began at the end of World War II when huge problems of reconstruction of houses and offices faced the politicians of England and the continent. Real estate developers turned to lawyers and asked the question: How can I give a title to an apartment (house) three or four or 15 houses above the ground, issue title, sell the title, collect my monies immediately and let me go next door and build more high-rise apartments?

The lawyers conceived of the Strata Title procedure, granting some form but still not the full title!

Problems: as soon as the house is attached to the next unit on the left and right and below and above my house, plus the area of the land and the common space (gardens, stairwells, roof, corridors, etc) a relationship is immediately established - demanding full agreement among all the proprietors before purchasing the unit.

This relationship in Jamaica is the Strata Corporation, that is, the total unit owners gathered into one corporation, agreeing to the Strata Titles Act and all the municipal regulations. This entailed an annual general meeting, election of officers, by-laws and regulations.The significant advantage to the owners is ownership (no more rent) and to the developer the immediate return of his development monies; each owner would provide through their bank or building society mortgage funds based on the ownership of the strata title. Thus, the developer would receive his funds immediately.

High rise units

Many high-rise apartments built before 1969 were converted to stratas; all the new high-rise units took advantage of the new law and registered their units under the Strata Titles Act.

Some of the more prominent stratas are: Abbey Court, Ocean Towers, Embassy, Carriage House, Maryfield, the new Liguanea Post Office unit, Sovereign Centre, Trafalgar Apartments, Beverly Hills Apartments, Beverly Glades, Long Mountain Country Club, Armade Court and, in the country, Turtle Towers, Sandcastles, and dozens of other schemes. There are perhaps as many as 3,000 registered strata corporations now prevailing in Jamaica; titles are issued by the Titles Office every day.

Very courageously, the National Housing Trust in their programme of inner-city housing, desiring to make owners rather than tenants of their purchasers, determined that all the units on Spanish Town Road, Trench Town, Denham Town, Monaltrie and the country schemes would be registered as Strata Corporations, subject to the same law and regulations as all other stratas; in the light of Jamaica's social divisions, perhaps this is not the wisest decision. But the law provides only one Strata Act.

All of the above provided the legal structure of the developments.

What about the human element? Would the owners, both high income and lower income, obey the law? Would they meet at annual meeting, elect responsible officers, approve the by-laws and, above all, pay the compulsory management fee demanded by the officers to pay taxes, common light bills, common water bills, groundsmen, repairs, additions and obedience to the municipal regulations?

The Strata Titles Act (1969) buckled under the burden of its own regulations.

Weak, indecisive, and carrying no public education plan in its wake, it allowed thousands of stratas to deteriorate into sleepy, dormant one-man operations, sued by the Jamaica Public Service Company, the Water Commission, the municipal authorities - to such an extent that mortgage companies would deny mortgages to anyone applying for one of these badly managed units. Management was poor or non-existent. In cases of non-payment of management fees, the volunteer directors were frightened to take their neighbours to the Resident Magistrate's Court for payment of their compulsory management fees. Some violence ensued.

More strength

From 1969 until 1974, the situation was allowed to continue; finally, it came before the Government and inthat year, under the chairmanship of P. J. Patterson, then Minister of Development, a committee was formed to outline a programme of amendments to the act, give it more strength and, particularly, to seek solutions to the problem of non-payment of management fees. A full report was issued; it is still available.

But from that date, nothing has come before Parliament to amend the act. It still sits, (2007) in some ministry, the amendments made and recommended by both political parties, and no action.

In 1985, a group of professionals, some of them strata owners themselves, met and discussed the state of affairs. At that time, informally, it was calculated that some $15 million was owed to the 1,500 stratas existing at that time. That amount is estimated to have doubled since that time until today.

Amendments

Fortunately, the Building Societies Association of Jamaica (now defunct) having a personal interest in the properties held by them in mortgages, decided to support the efforts of the founding committee and supplied office space and a small financial support. Thanks to the effort of the BSAJ manager at that time, Joe Bailey, the committee began its work, that is, a study of the act, a study of the strata practice in England, Australia and New Zealand, and a draft of the act with the suggested amendments.

Realising the seriousness of the problem, the committee decided to register under the Companies Act and give themselves the protection of the registration and to underline the seriousness of their efforts. The legal work was done pro bono and became the bible for the association. I defer to name the committee at this time; I am afraid that the futility of their efforts would make them very embarrassed.

Beginning with the 1974 Patterson report, plus the text of a one-day hearing before a subcommittee of Parliament in 1990 - presented by the then chairman of the organising group. And outlining the history of the committee, the work accomplished and pleading for speedy action on the amendments, the committee awaited the results. The minister responsible for the Strata Act at that time was Easton Douglas.

Meanwhile, hundreds of strata corporations struggled their way through their problems, e.g., lack of volunteers, no annual meetings, no accounts, no managers, serious delinquency in management fee payment, no government supervision, etc.

The Jamaica association of Strata Corporations Limited carried on, giving advice to hundreds of stratas, their officers and their proprietors, sponsoring some five successful workshops, publishing a quarterly newsletter and attending annual and regular meetings of individual stratas.

Anchor

Slowly, it was realised that an anchor was pulling back the efforts of the association. Something was wrong. There never was a proper response - not even a breath - of enthusiasm. Committee members began to fail to attend meetings. Only a few persons attended the seminars. The association was dormant. No office, no manager, no staff.

This anchor, it is surmised, was the ability of each member to not pay his management fees until taken to court. None of the members wanted anything to do with court - not even the directors of the association. It was a stalemate.

There was no real possibility of the stratas collecting any reasonable amount of management fees; delinquency would always be an anchor about their necks. And the Jamaica Association of Strata Corporations spent most of its time urging members to pay their fees!

New policy

Finally, in 2005, the Association was notified of a new policy of the Registrar of Companies, a programme of voluntary dissolution, granting an amnesty to all the companies which had become inactive. Attached to the notice was a list of fees that would be imposed on each active company. The Jamaica Association of Strata Corporation realised that they would be responsible for some $40,000 of fees and penalties. Under the amnesty, these fees would be waived in the case of liquidation within a certain period of time.

It wasdecided by a few members of the association to accept the amnesty, liquidate and try again to register at some future date. So said, so done.

The amendments to the Strata Titles Act remain hidden. After nearly 20 years of trying to change the Strata Titles Act (1969), thousands of volunteer hours, telephone calls, letters and emails, constant attempts to update their knowledge of the strata/condominium world, dozens of meetings with public and private sector agencies, the Jamaica Association of Strata Corporations Limited died, liquidated, dissolved.

Fr. Gerard McLaughlin served as a senior officer in the Ministry of Housing between 1973 and 1981, and again between 1992 and 2007.

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