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By Jason Lim, REN 84424 · IQI Realty · Checked on 13 November 2026
This guide is for strata owners in Johor and for buyers from Singapore, Indonesia, India, China and elsewhere checking a building. The short answer: under the Strata Management Act 2013, every Joint Management Body (JMB) and Management Corporation (MC) must keep accounts that explain every transaction, have them audited every year by an approved company auditor and file a certified copy with the Commissioner of Buildings (COB). Owners see them at the annual general meeting (AGM). Read three things first: the sinking fund balance, the arrears owed by owners and the auditor’s opinion.
Quick answer
- The law: sections 26 (JMB) and 62 (MC) of the Strata Management Act 2013 require proper accounts, a yearly audit and a copy filed with the COB within 14 days.
- Two separate funds: the maintenance account pays day-to-day costs; the sinking fund pays only for capital work, funded at 10% of the charges.
- Where owners see them: at the AGM, where the audited statements are tabled (section 59 for MCs).
- Arrears: late payment interest is capped at 10% a year, and an owner whose charges are in arrears seven days before a general meeting cannot vote.
- If something looks wrong: ask the committee in writing, then the COB at your council (MBJB, MBIP, MBPG or MPKu), which can order an investigative audit.
- Penalties: if a JMB or MC fails its accounts duties, each committee member can face a fine of up to RM250,000, up to three years’ jail or both.
Who keeps the accounts at each stage
In Peninsular Malaysia, including Johor, strata buildings and gated strata estates are managed under the Strata Management Act 2013 (Act 757). The body that keeps the books changes as the development matures; my strata title guide explains the title side.
| Stage | Who keeps the accounts | Key duties on the money |
|---|---|---|
| Developer’s management period | The developer | Opens a maintenance account and a sinking fund account, and must hand over the balances, audited (or unaudited) accounts and all invoices, receipts and payment vouchers to the JMB (section 15). |
| Joint Management Body (JMB) | A committee elected by purchasers, with the developer as a member | Keeps accounts, appoints an approved company auditor every year and files the audited accounts with the COB (section 26). |
| Management Corporation (MC) | All parcel owners, through an elected management committee | Same duties under section 62, plus a duty under section 59 to provide its members with audited financial statements. |
Many buildings hire a managing agent, but the JMB or MC stays legally responsible for the accounts.
Maintenance account vs sinking fund
The law keeps two pots of money apart. Mixing them is a warning sign.
| Maintenance account | Sinking fund account | |
|---|---|---|
| What it is for | General and regular spending: cleaning, security, lift servicing, utilities for common areas, insurance premiums, managing agent and audit fees | Capital spending only, actual or expected: repainting, replacing lifts, pumps and other fixtures, buying shared equipment |
| Where the money comes from | Monthly charges, set by share units from the building’s budget | Contributions of 10% of the charges, which a general meeting can raise but not lower |
| What a healthy pattern looks like | Income roughly covers spending; no repeated deficits | A balance that grows year by year unless a planned project was paid for |
| Law (JMB / MC) | Sections 23 and 25 / sections 50 and 60 | Sections 24 and 25 / sections 51, 52 and 61 |
For how charges are worked out from share units, and what a typical sinking fund pays for, see my maintenance fee and sinking fund guide. Large one-off repairs that the sinking fund cannot cover end up as a levy; my special levy guide covers that.
What is in a set of audited accounts
The Kuala Lumpur COB’s financial procedures guideline lists the audited statements a JMB or MC should table: a statement of financial position, an income and expenditure statement and a cash flow statement, with the auditor’s report. Johor councils apply the same Act.
Statement of financial position (balance sheet)
- Cash and deposits in each fund. The sinking fund should be shown separately. Compare it with last year’s figure.
- Receivables from owners. This is the arrears figure: charges and contributions billed but not paid. Read the note for how much is more than a year old.
- Payables and accruals. Unpaid bills to contractors and utilities. A large or growing figure can mean the body is short of cash.
Income and expenditure statement
- Charges billed vs total spending. Repeated deficits usually mean a rate increase is coming.
- The biggest lines. Security, cleaning, common-area utilities, lifts, insurance and the managing agent’s fee. Ask about any line that jumps.
- Spending from the sinking fund. Check that it was for capital work, not routine costs.
Cash flow statement and the notes
The cash flow statement shows whether cash really came in. The notes give the age of arrears, provisions for debts that may never be collected, commitments for upcoming works and any court or tribunal cases.
The auditor’s report
Read the opinion first. A clean (unqualified) opinion says the statements are fairly presented. A qualified or adverse opinion, or a disclaimer, means the auditor found a problem or lacked evidence, often because records were incomplete. In August 2026 a strata owners’ association adviser told The Star that auditors should also check whether funds were used as the Act allows.
Buying or owning a condo in JB?
Send me the project name. I’ll help you get the latest audited accounts, AGM minutes and charges statement through the seller or management, and walk you through what the numbers show.
WhatsApp JasonArrears and the collection rate
Arrears are charges and contributions owners have not paid. To estimate the collection rate, divide the charges collected in the year by the charges billed. Malaysia has no official benchmark, but an industry estimate quoted by Bernama in March 2025 put collection at roughly 80–95% in high-end developments, 60–70% in medium-cost and 40–50% in low-cost schemes. The trend over three years tells you more than one figure.
| What the law allows | Detail |
|---|---|
| Payment deadline | Owners must pay within 14 days of receiving the JMB’s notice of charges (section 25). |
| Interest on late payment | Set at a general meeting, capped at 10% a year (section 25). |
| Demand notice | A written notice giving at least 14 days to pay; after that the JMB may go to court or the Strata Management Tribunal (section 34). |
| COB warrant of attachment | The COB can issue a warrant to attach an owner’s movable property on a sworn application (section 35). |
| Access cards and facilities | Under the standard by-laws, 14 days after a notice the management can deactivate the defaulter’s access card and suspend use of facilities, and post defaulters’ names on the notice board. |
| No lock-out from the unit | On 26 October 2026 the Court of Appeal ruled that a JMB cannot bar an owner from entering their own unit over unpaid charges; the housing minister said defaulters must be given another way in. |
A long list of owners barred from voting for arrears in the AGM minutes is another warning sign; see my condo AGM voting guide. If you are buying, your lawyer should get a statement for the unit itself so the seller clears its arrears; my subsale arrears and apportionment guide explains how.
A worked example
A fictional 400-unit JB condo, to show how the figures connect:
| Item | Last year | This year | What it suggests |
|---|---|---|---|
| Charges billed | RM1,200,000 | RM1,200,000 | No rate change |
| Charges collected | RM1,020,000 | RM960,000 | Collection fell from 85% to 80% |
| Arrears owed by owners at year end | RM300,000 | RM450,000 | Rising arrears; ask what recovery action is under way |
| Sinking fund contributions billed (10%) | RM120,000 | RM120,000 | The most the fund can grow from contributions |
| Sinking fund balance | RM900,000 | RM880,000 | Shrinking with no project listed: ask why |
| Surplus or deficit on maintenance | RM20,000 surplus | RM60,000 deficit | A rate review or levy may follow |
Red flags in strata accounts
- Accounts that are late, unaudited or carry a qualified opinion or disclaimer.
- No AGM for more than 15 months, so no accounts tabled.
- One bank account for everything, or sinking fund money used for routine bills.
- A sinking fund balance that falls without a capital project to explain it.
- Arrears rising every year, or a collection rate the office will not share.
- Large cash payments, or repeated work for one contractor without quotations.
- Developer-period balances that were never handed over, or a developer that has not paid charges on its unsold units.
One red flag is a reason to ask questions, not proof of wrongdoing. In June 2026 the anti-corruption commission (MACC) proposed wider COB powers over misuse of funds, binding financial and procurement guidelines and e-reporting (The Star, 19 June 2026); the Act is under review.
How owners and buyers can ask for documents
- Ask the management office in writing for the latest audited accounts, AGM minutes and budget.
- Ask questions at the AGM. Any owner can add a motion by writing to the registered office at least seven days before the meeting, for example asking for quarterly management accounts.
- Get the unit’s certificate. An owner or prospective purchaser can ask the JMB for a certificate of the unit’s charges, sinking fund contributions and arrears, for a fee of no more than RM50 (section 31).
- Buyers: ask through the seller. My guide on checking condo management before buying lists the full set.
- Go to the COB. The Act gives the COB, not individual owners, an express right of full access to the accounts and records, and the COB can appoint an auditor to investigate at the body’s cost (sections 26 and 62).
- The Strata Management Tribunal. It can hear claims of up to RM250,000, including a JMB or MC failing a duty under the Act. A residential claim costs RM100 to file (KPKT FAQ, July 2025). See my Strata Management Tribunal guide.
The office may let you inspect records rather than copy bank statements; that alone is not a sign of wrongdoing. This guide is general information, not legal or accounting advice.
Where to buy if this matters to you
Completed buildings with years of audited accounts are the easiest to judge:
- Mount Austin: many completed condos with records to compare.
- JB Sentral and Bukit Chagar: high-rises where lift funding matters.
- Danga Bay: check facade and waterproofing spending.
- Tebrau, Setia Indah and Molek: established condos and gated strata.
- Permas Jaya and Senibong: older and newer buildings.
- Iskandar Puteri: newer schemes, some still at the JMB stage.
Compare them on my JB property map. Foreign buyers should note Johor’s general RM1 million minimum price for most homes (New Straits Times, April 2026); see my Johor foreigner minimum price guide.
More Johor living guides: Buying an older condo · Condo by-laws and access cards · Landed strata titles · Hidden costs of buying
Frequently asked questions
Does a condo JMB have to audit its accounts every year?
Yes. Section 26 of the Strata Management Act 2013 requires a JMB to keep proper accounts, appoint an approved company auditor to audit them every year and file a certified copy with the Commissioner of Buildings within 14 days of the audit. Section 62 sets the same duties for an MC.
What is the difference between the maintenance account and the sinking fund?
The maintenance account pays regular costs such as security, cleaning, utilities, insurance and lift servicing. The sinking fund account may be used only for capital spending such as repainting and replacing equipment. Sinking fund contributions are set at 10% of the charges, and a general meeting can raise but not lower that rate.
Can I see my condo’s accounts as an owner?
Owners normally receive the audited statements at the AGM, and an MC must provide them to members. For more, ask the management office in writing or raise it at the AGM. The Commissioner of Buildings has full access and can appoint an auditor to investigate.
Can a buyer check a condo’s accounts before buying?
Usually through the seller, who receives the audited accounts and AGM minutes. A prospective purchaser can also ask the JMB for a certificate of the unit’s charges, sinking fund and arrears for a fee of no more than RM50.
What is a red flag in strata accounts?
Late or unaudited accounts, a qualified audit opinion, a sinking fund that shrinks without a capital project, arrears rising every year and no AGM for more than 15 months.
Where can I complain about my JMB or MC’s accounts in Johor?
Write to the committee first, then complain to the Commissioner of Buildings at your city council, such as MBJB or MBIP. If that fails, the Strata Management Tribunal hears claims of up to RM250,000, and a residential claim costs RM100 to file.
Want a second pair of eyes on a building’s accounts?
Tell me the project and whether you own a unit or are thinking of buying. I’ll help you collect the audited accounts, AGM minutes and the unit’s charges statement, explain what the sinking fund and arrears figures show, and suggest questions for the management office. You can also book an appointment in JB, or a Zoom consultation if you are abroad.
Sources: Strata Management Act 2013 (Act 757), sections 15, 23 to 26, 31, 34 to 36, 50 to 55 (copy published by DBKL), checked November 2026; Strata Management (Maintenance and Management) Regulations 2015, P.U.(A) 107, regulations 12, 21, 23 and 34 (copy published by DBKL), 1 June 2015; Pesuruhjaya Bangunan Kuala Lumpur (DBKL), Garis Panduan Tatacara Kewangan Mengurus Akaun Penyenggaraan Bangunan, October 2013; Majlis Bandaraya Seremban, Form 14 and proxy form notes (arrears cut-off for voting), July 2020; KPKT, Soalan Lazim Tribunal Pengurusan Strata, updated 9 July 2025; New Straits Times (Bernama), “Maintenance fee arrears: should we be concerned?”, 11 March 2025; Malay Mail, on the standard strata by-laws, 29 September 2026; Malay Mail, “Locked out over maintenance fees? Court says JMBs can’t do that”, 27 October 2026; The Star, “Strata management must provide alternative access to maintenance fee defaulters”, 29 October 2026; The Star, “MACC proposes Strata Act amendments to boost oversight of condo finances, procurement”, 19 June 2026; The Star, “Better oversight needed for strata homes, say experts”, 26 August 2026; The Star, “Govt mulls amending Strata Management Act to strengthen accountability of JMBs, MCs”, 10 August 2026; New Straits Times, “Foreigners hit Johor property resale wall”, 20 April 2026
Jason Lim, REN 84424, IQI Realty Sdn. Bhd. E (1) 1584/6. General information checked on 13 November 2026, not legal, accounting or financial advice. The Strata Management Act 2013 is under review and COB practice varies by council; confirm with the Commissioner of Buildings, the Strata Management Tribunal, an auditor or a lawyer before you act.