Deed of Mutual Covenant (DMC) what is this?

Wong Joseph
August 11, 2013 in Malaysia Property News
GMS Solutions Sdn Bhd

Developers would have insisted that house buyer (purchaser) signed two agreements at the point of sale. The first is Sales and Purchase Agreement (SPA) and the second is the Deed of Mutual Agreement (DMC).

A Deed of Mutual Covenant (“DMC”) is an agreement under seal. It binds on all owners of a Strata scheme development or multi-storey building. It basically sets out rules to regulate the rights and liabilities of co-owners and establishes management machinery for Common Property Management and Maintenance of the property.

The signatory of a DMC include the developer and the first purchaser of a unit in the development and/or the management company (if there is a management company appointed).

Sometimes management company are not appointed at the time of agreement is written and developer will include a clause where they have a right to appoint a management company.

Even though not all owners signed the DMC, they are bound directly by it. DMC covenants can be enforced against the successors in title of the original parties or their successors in title. DMC has a binding force over all owners, incorporated owners, manager, tenants and users of the building.

Relevant parties can take legal action against the party who violates the DMC. The remedies of violations include damages against losses, an injunction order from the court and a declaration from the court concerning the violating act.

The DMC is only valid for a period of not more than 12 months. Once a joint management body (JMB) is formed within 12 months from date of vacant possession, the DMC ceased to apply. The house rules set by the JMB will become the new rules.

On the safe side, buyers are advice to seek legal advice before signing DMC.


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