Legal Wise by MdME | Commercial activity of condominium management

Jacky Lai Kim Hong*

With a total area of 30.5 square kilometer, Macau is one of the most densely populated cities in the world. Inevitably, the lack of space equates to squeezing more buildings into less land, and, as we take a quick look at the city, we can see that construction of strata title properties is unexceptional in Macau.

Further, the increase of the quality of condominiums and the respective inflation in property prices has also led to a higher expectation of the overall standard of management of the condominiums.

The Macau Government and the Legislative Assembly sensed the need to delineate and regulate the commercial activity of condominium management by property managers, for the improvement of the efficiency of the management companies as well as the overall environment of the condominiums.
As such, a new law regulating the commercial activity of condominium management, numbered as Law no.12/2017, which was approved by the Legislative Assembly on August 7, will come into force on August 21, 2018.

The first innovation of the newly published law is the mandatory application of a license, with a term of three years, to be issued by the Macau Housing Bureau, by any company or sole proprietor, who wishes to exercise the commercial activity of condominium management.

The law sets out several requirements for successful approval of the license. The company or sole proprietor must not be declared bankrupt/insolvent, owe any debts to the Macau Government and also pay a deposit, calculated according to the number of units in the condominium. This amount will be further approved by a Chief Executive dispatch and published in the Official Gazette. Moreover, if the managing entity is a company, it must have a minimal share capital of MOP250,000, its registered office must be in Macau and its scope of business must cover the management of condominiums.

Another pivotal addition in the law is the emergence of the role of a technical director. A licensed company or sole proprietor must have at least one technical director, who must hold (at least) a high school diploma and have successfully completed the training course held by the Labour Affairs Bureau in management of condominiums.

In a nutshell, it is easy to see that the desire of the Macau Government is to not only increase the duties of the entity responsible of condominium management but also severely sanction the violation of the duties imposed by law. Non-compliance can result in fines ranging from MOP2,000 to MOP500,000, suspension of license or interdiction of their management of the condominium, as well as criminal liability in case of disobedience. 

To that point, duties of the condominium manager shall not only consist of hiring security guards and/or cleaners to perform daily maintenance chores. Multi-dimension facilities, like the type of condominiums we have in Macau, require a highly organized structure to efficiently execute the daily tasks of condominium management and the law also requires condominium managers to have a first condominium assembly, documentation archive, insurance against fire, facility maintenance and financial reporting. Hence, the mandatory appointment of a technical director, who has knowledge of property management, is capable of pointing out structural deficiencies and can proceed with any maintenance duties, is, indeed, a step forward.

All things considered, we believe that good management and tighter supervision of the Housing Bureau will positively reform the standard and quality of the condominiums in Macau and it will, beyond any doubt, boost the value and environment of the current real estate market.

*Associate, MdME Lawyers