| The Strata Management Act 2013 regulates the management and maintenance of stratified property in Malaysia. It defines important rights and responsibilities of parcel owners, developers and management bodies. Mixed developments, particularly those combining residential and commercial components, often raise the question whether every parcel must pay maintenance charges and sinking-fund contributions at the same rate. Does the Act Permit Different Rates? The starting position is a uniform rate within the development area. Different rates may be imposed only where the requirements in section 60(3)(b) of the Strata Management Act 2013 are satisfied. A management body should not introduce differential charging merely because one group believes another can afford more or uses common property differently. What Is a Uniform Rate? A uniform rate means that the same rate per share unit applies to every parcel in the relevant development area. Because parcels may carry different share units, owners can still pay different total amounts even though the rate itself is identical. When May Different Rates Be Considered? Section 60(3) permits differential rates where parcels are used for significantly different purposes or where provisional blocks exist within the development area. The provision is particularly relevant to genuine mixed-use schemes, but its conditions and procedural requirements must be followed. What Does ‘Significantly Different Purposes’ Mean? The expression addresses substantial differences in the purpose or use of components or parcels, rather than minor variations between individual occupants. Residential, retail, office or other distinct components may create different management arrangements and expense allocations. Whether the threshold is met depends on the scheme’s actual design and use. How Are Differential Rates Introduced? The compliance process requires detailed preparation. A general meeting must be properly convened. Owners should receive sufficient information about the proposed budgets, allocation of expenses between components or parcel groups, and the resulting rate for each component. Motions approving those allocations and rates must be deliberated and passed at the meeting in accordance with the Act and applicable procedural rules. Records should explain the factual and financial basis for the distinction. Recent Court of Appeal Guidance In Aikbee Timbers Sdn Bhd & Anor v Yii Sing Chiu & Anor and Another Appeal [2024] 3 CLJ 177, the Court of Appeal held, among other matters, that different rates for maintenance charges and sinking-fund contributions may be imposed in a mixed development containing parcels used for significantly different purposes. The power may be exercised by the developer during the preliminary management period and by the management corporation during its period of management, subject to the statutory requirements. A developer or management corporation proposing differential rates should obtain advice on the development’s structure, expense allocation and meeting procedure before implementation. Parcel owners disputing a rate should review the resolutions, budgets and statutory basis rather than assuming that every difference is automatically unlawful. This article provides general information only and does not constitute legal advice. |
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Posted by David Chau & Artika on 22 Jul 26
Malaysia