Lessons I Learned at My First Property AGM in Malaysia

Imagine dragging yourself from Singapore across the border to Johor Bahru at 5 a.m., after working through the night, just to beat the traffic and attend an AGM for your JB property at 10 a.m. By then, you’ve been awake for over 24 exhausting hours, sitting through questions and debates, thinking you’re doing your part for the development’s betterment—only to realize, after four hours, that you’re merely there to fulfill a legal formality. You storm out of the AGM in anger and frustration.

The end result was a three-person Joint Management Committee (similar to an MCST), made up entirely of individuals connected to the property developer.

While it may sound unbelievable, this is exactly what happened to us when we attended the first AGM organized by the property we own in Malaysia.

As more and more Singaporeans are buying property across the border, I really hope to educate you on the possible rigging tactics and prepare you for your first property AGM.

First things first, don’t be late and an AGM can last for many hours

Mine lasted for over 4 hours. So prepare snacks, coffee or whatever you need to pay attention, get comfortable and prepare for many hours of questioning and debate. (There was also translation which is makes everything longer by 2 times!)

I should have done my homework

Yes, I did join the AGM clueless, and while some were familiar with it (having bought more properties), I regretted not being prepared and familiarising myself with the strata title and AGM rules in the 2 weeks before the meeting.

There are plenty of resources online if you just Google:

• What happens in first Property AGM?
• Rules of strata title in Malaysia

#tip: ChatGPT is a fantastic resource to help you summarize and understand all the legal stuff.

And don’t assume that since you have attended property AGMs in Singapore that it will be the same in Malaysia.

Some main points that were on the Agenda during the first AGM:

• Decide the number of Joint Management Committee members (JMC) — similar to MCST but inclusive of 1 Property representative. The number can be 3-14.
• Decide on who is to be in the JMC
• Review annual budget and other money related stuffs like account auditing
• Vote on any motions — Motions are formal proposals e.g. improvements to the estate, approving appointments of certain agencies, review financial statements etc. These motions must be submitted at least 7 days before the AGM.

Realize Early That The Odds are Heavily Stacked Against You

If you are just an average normal person and not secretly some Chinese or Indonesian tycoon, you likely only have a very very small percentage of shares. If the developer still has a large percentage of unsold units, their portion of shares is much higher than yours and therefore whatever that they vote on can immediately sway the votes.

For example, you bought a unit in a mix development with thousands of units. The developer has not sold 30% of their units, and you look around and less than 10% of the total eligible voters turn up for the AGM, you can be sure that they (the developer) will win/pass ANY resolution and you (owners) will lose.

If you aren’t sure of their voting shares vs yours, do ask them first. Ask “What is the developer’s voting shares percentage vs everyone else present?”

In my case, there were 1700+ eligible voters but only 100+ people turned up. The developer had 30% of unsold units. So, even if everyone present during the meeting voted for a particular agenda, we will not be majority.

It was at around 2pm, after being in the meeting for 4 hours, that we all realised that we didn’t have enough shares to pass any resolutions or even be a threat or challenge. This should have been apparent to us in the beginning but since not many were familiar with how voting shares worked, we realised it a little too late.

Many of us felt cheated that the system was rigged against us and that the developer was not upfront with how much voting power they had when the meeting started.

Rigging tactics of the developer

First, they notify you of the AGM only 14 days in advance via their announcement app and posters in the condo’s lifts. While not illegal, that gives you barely enough time to prepare. Many owners are foreigners (as is common with these developments), and they may find it difficult to make arrangements on such short notice. (That said, the official letter arrived by registered post only two days before the meeting. I’m not sure if that violates any laws, so if anyone knowledgeable about this could comment below, it would be appreciated.)

Secondly, a small portion of the AGM are actually owners who are also in their employ or affiliated with the property developer. Funnily, there was also a YouTuber who had been promoting the property in his videos present. Someone will suggest a 3-person committee, which is the minimum required by the law. They are technically not breaking laws as these are owners or proxies so they are allowed to join the AGM.

A 3-person committee means 2 members who are owners and 1 representative from the property developer.

Other owners may propose for 8 people, 10 people etc but it would not matter as they have the votes to make it work in their favour so that the minimum 3-person committee is confirmed.

The lawyer and YouTuber present also tried to mislead us into thinking that a JMC should not have too many people as it is a thankless job etc etc.

By this time, we realised that we were #pwned. It was not logical to us that any of us would approve a mere 3-person committee to run a condo project of thousands of units and some tempers were flared and there was confusion about the vote count and why there was 27,000 shares when the people present was just around 110.

What they will do next is plant 2 people that are affiliated with the property developer into the nominations. More people were in the running but they knew they had it in the bag. It was also very clear that everything had been planned in advance. The top two vote-getters — both employees of the developer — nominated each other, but once again, we didn’t have enough votes for it to make any difference. Their vote shares outnumbered us 4-to-1. It was overkill.

In the end, the JMC was confirmed with all 3 people who are working for the property developer. One is a director for the company, the other is a regional sales manager and the last one is a representative. Not a single member was unaffiliated with them.

The lawyer presiding over the AGM clarified that there is no conflict of interest as they are property owners too. No matter how much we tried to overturn the proposal, it was set by law.

At this point, some mild vulgarities were thrown around, plenty of shouting and eventually most stormed out angrily. Me and my husband followed. I didn’t so much stormed out as hobbled as my knees were aching from sitting in a cold theatre for 4 hours.

Outside, a crowd of angry owners gathered and we decided to form a group chat and discuss if there was any recourse.

If you are aware of other rigging tricks by other developers during AGMs, please comment below.

It is good to have questions

I also learned not to take anything at face value. The people sitting up on stage are not impartial or on your side. It is your right to question them everything:

• How many shares does the property have vs the other quorum present?
• What are the roles of the committee members?
• What happens if we move forward or do not move forward with this proposal?
• What are the finances and expenditures of past year? (And do insist to see it first before approving the budget.)
• What actions can be taken against the committee?

Proposing motions (submit these 7 days ahead of the meeting) are also very important; other than renovation and maintenance related stuffs, you can also request to see financial statements (who and how much they are paying the staffs or contractors etc.) and also suggest review of by-laws.

The importance of evening the odds

If you think this was a rare occurrence, my further research showed that it’s not. In fact, I was disappointed to discover—through forums and Facebook posts—that this is a common practice and outcome in Malaysia, especially in large projects with many foreign buyers. That’s why I felt compelled to write this blog post as a warning to as many of you as possible.

Evening the odds means convincing as many people as you can to come and vote in the AGM, and if they can’t come, make sure they assign a proxy. That said, it might still be a very tough fight but if you educate yourselves beforehand and come prepared with lots of questions, submitted motions and by-laws ahead of time, and in large numbers, you would have a higher chance of passing your resolutions or at least making it a fairer fight.

Why is it important?

You may think it does not affect you if you don’t live there. In fact it affects 2 major aspects of the property:

• Maintenance of security, cleanliness and function of common areas, which in turn affects your property value.

Many Malaysian properties are in disrepair and ill-maintained because of mismanagement of funds and resources. Some are even so bad to the point that they don’t have steady electricity and water supply and they eventually don’t even have a proper MCST. If your property is an investment or you are living there, it is to your benefit that the surrounding area is well-maintained and liveable to yourself and your tenant.

• More importantly, provide checks and balances in accounts.

We found out that their budget increased by 20% from the first year of operations and while our maintenance fee had maintained, it meant there was no surplus for the coming year and the high probability that they will raise rates in the year after that. If there was no third party unaffiliated with the developer in the JMC, how can you be sure there is no fraud happening?

Also, the accounts and finances would be passed to the MCST (which is a committee form by all owners and no property representative) and there are cases that when the MCST is formed 3 years later, the accounts were in arrears.

So, yes, if you want your property in Malaysia to be maintained at a high standard and also a high value, be it for your own comfort or rental yield, you would want to be involved in the AGM or be at the mercy of whatever decision that gets made in the committee.

So please DO attend the first AGM of your new property and also try to get as many of your neighbours to come as well! If they need further convincing, you can show them this article! (Sorry for the shameless promotion.)

Final thoughts

Okay, it may sound like I’m regretting my decision to buy a property in Malaysia but it is far from it. I love my new house and environment. (In fact, I was and still am writing another blog post on why I made this decision.) However, I just felt strongly that I should have been better prepared for the first AGM and also if more people came, we wouldn’t have been taken advantage of.

Hope this article helps you in preparing for your first Annual General Meeting for Stratified Developments!