The increasing sophistication of property owners and their rising expectation for good governance in managing strata-titled developments could pose a daunting challenge to the management councils. It is important that members of the management councils of such developments are well-equipped with the knowledge of the regulatory framework and the related accounting and auditing requirements under the provisions of the Building Maintenance and Strata Management Act (BMSMA).
Subject to section 134, the books and accounts of every management corporation in respect of each financial year of the management corporation shall be subject to audit.Read more
Gross Sales Audit
Retail tenants and commercial real estate professionals should be aware of a common provision in leases known as gross turnover. This provision relates to extra rent paid based on a percentage of gross sales.
At the end of each of the tenant’s financial year, a statement of the tenant’s gross turnover duly audited by the tenant’s auditor is normally required to submit to the landlord.
The certification of the tenant’s auditors shall be accepted by the parties as conclusive of the amount of the gross turnover of the relevant period. Monthly rent payable is determined from the base rent component as well as the amount calculated in accordance with gross sales provision.Read more