Also in: Bahasa Melayu
This is for anyone buying a condo, apartment, serviced residence or any other strata unit in Malaysia, especially a subsale one. The short answer: every month you pay a maintenance charge plus a sinking fund contribution of at least 10% of that charge, both set by share units. Before you sign, get the official certificate of what is owed on the unit and look hard at how well the building collects its money.
What the two payments are for
The maintenance charge covers the day-to-day running of the common property: cleaning, security, lifts, common-area electricity and water, landscaping, the pool and gym, insurance, and the managing agent’s and auditor’s fees.
The sinking fund is a separate reserve that builds up over the years. Under the Strata Management Act 2013, it may only be spent on capital items for the common property, such as:
- painting or repainting the building and common areas;
- buying movable property for common use;
- renewing or replacing fixtures and fittings, such as lifts or pumps;
- upgrading and refurbishing common property;
- other capital spending the management body decides is needed.
The two must sit in separate bank accounts. If a management body pays the guards’ salaries out of the sinking fund, that is a warning sign.
How much: the 10% rule and share units
While the developer manages the building, the Act fixes the sinking fund at 10% of the charges. Once owners take over through a joint management body (JMB) or management corporation (MC), it cannot be set below 10%, but owners can vote at a general meeting to set it higher.
Charges are not worked out per square foot of your unit directly. They are set in proportion to the share units allocated to each parcel, which reflect its size and type. A larger unit or a shop lot carries more share units, so it pays more.
In September 2026, the Federal Court refused a management corporation leave to appeal in a case over different maintenance rates for the different parts of a mixed development in Melaka. The Strata Management Tribunal had declared those rates void, and the Court of Appeal had restored that decision. Lawyers quoted by The Star said a general meeting resolution cannot override the Act, because share units already account for the different uses. If your development charges different rates per component, ask your lawyer how this affects it.
| Item | Monthly | Yearly |
|---|---|---|
| Maintenance charge (assumed) | RM300 | RM3,600 |
| Sinking fund at 10% | RM30 | RM360 |
| Total | RM330 | RM3,960 |
I have not quoted a “typical” rate per square foot: rates vary widely, and I found no recent, reliable survey to cite. Ask for the unit’s actual bill.
Who collects it: developer, then JMB, then MC
- Developer. From vacant possession, the developer manages the building and collects the charges and sinking fund.
- JMB. The developer must convene the first annual general meeting of the JMB no later than 12 months after vacant possession is delivered. The JMB is made up of the developer and the purchasers.
- MC. Once strata titles are issued and the strata register is opened, the management corporation is formed. The developer must convene its first AGM within a month after the owners hold enough share units, and then hand over the accounts, including the sinking fund.
So for a new project you pay the developer first; for an older subsale unit, usually the JMB or MC.
Before buying subsale: check the arrears
This is the step buyers skip most often. Your lawyer can apply for an official certificate from the management body: under section 31 of the Act while there is a developer or JMB, and under section 73 once there is an MC. The fee is capped at RM50.
The certificate states the charges and sinking fund payable on the unit, any arrears, the balances in the maintenance and sinking fund accounts, and the nature and estimated cost of any repairs likely to fall on owners. That last point is gold: it tells you whether a large repair bill is already on the way.
Why bother? Unpaid charges carry interest of up to 10% a year, and a buyer can be pursued for a seller’s arrears. An EdgeProp column described a buyer chased for about RM7,800 left by the seller, even though the sale agreement made the seller responsible. The law has limits: in July 2026 the High Court ruled that a buyer at a court auction is not a “successor-in-title” and need not take on the previous owner’s arrears, but that ruling was about auction sales, not ordinary private sales. Have your lawyer get the certificate and settle arrears from the sale proceeds at completion. I cover other subsale checks in my article on subsale risks.
Red flags in a building’s money
- Low collection rate. A Bernama report in March 2025 quoted an industry estimate of 40% to 50% collection in low-cost schemes, 60% to 70% in medium-cost and 80% to 95% in high-end buildings. If a building collects poorly, paying owners carry the gap, and fees tend to rise.
- No audited accounts. The Act requires accounts to be audited. Ask for the latest audited statements and the AGM minutes.
- A thin sinking fund in an older block. If big works like repainting, lift replacement or waterproofing are due and the fund is small, expect a special levy or a higher rate.
- Signs of decline. Broken lifts, dark corridors, a dirty pool and visible leaks usually point to money problems.
- Recent disputes. AGM minutes full of fights over charges, or a pending Tribunal case.
Remember to include the charges in your holding costs, alongside quit rent and assessment. My guide to hidden costs of buying property puts them all together.
The COB and the Strata Management Tribunal
The Commissioner of Buildings (COB) is appointed by the state for a local authority area and administers the Act; in practice it is a unit of your local council. Owners go to the COB with complaints about the management body, and management bodies go to it for a warrant to attach and auction a defaulter’s movable property.
The Strata Management Tribunal hears disputes under the Act, including unpaid charges and sinking fund contributions, with claims of up to RM250,000. EdgeProp reported in 2022 that the filing fee was RM100 and that about 80% of claims involved fees and payments. Lawyers are not allowed by default, and the Tribunal aims to make its award within 60 days of the first hearing where it can. An award can be enforced like a court order.
A quick checklist
- Ask the seller for the latest maintenance bill and receipts.
- Have your lawyer apply for the section 31 or section 73 certificate.
- Check the sinking fund balance and any repairs listed on the certificate.
- Read the last audited accounts and AGM minutes.
- Ask the management office about the collection rate and any planned rate increase or special levy.
- Walk the common areas yourself.
Your lawyer’s fees for these searches are normally part of the conveyancing work; see legal fees when buying property.
Questions about your situation?
Send me the building name and what the seller has given you, and I will help you work out what to ask for.
Sources: Laws of Malaysia (published by DBKL), “Strata Management Act 2013 (Act 757)”, February 2013; EdgeProp, “Property Management: Ask the experts — sinking fund”, June 2019; EdgeProp, “Be mindful of the ‘Certificate’ in Section 73 of the Strata Management Act”, October 2020; Malay Mail, “High Court rules strata auction buyers need not inherit previous owners’ arrears”, July 2026; The Star, “Landmark ruling bans unequal fees”, September 2026; NST / Bernama, “Maintenance fee arrears: should we be concerned?”, March 2025; EdgeProp, “80% of Strata Management Tribunal claims are fee related”, November 2022; Low & Partners, “The Basic Procedure on How a Strata Management Bodies May Recover Outstanding Maintenance Charges”, June 2022; Mah Weng Kwai & Associates (Mondaq), “10 Things To Know About The Strata Management Tribunal”, October 2022
Jason Lim, REN 84424, IQI Realty Sdn. Bhd. E (1) 1584/6. General information checked on 12 October 2026, not legal, tax or financial advice.