How Maintenance Fees and Sinking Fund Work in Malaysian Strata Properties

If you own or are buying a strata property in Malaysia, two monthly charges will follow you for as long as you hold the unit: the maintenance fee and the sinking fund contribution. The maintenance fee keeps the building running day to day; the sinking fund is the long-term repair reserve that prevents crises when major components fail. Both are governed by the Strata Management Act 2013 (Act 757) and enforced through KPKT’s Strata Management Tribunal.

This guide explains how each charge is set, why your unit’s share units determine what you pay, and what happens if you or other owners stop paying.

What the Strata Management Act 2013 actually says

The Strata Management Act 2013 (SMA 2013) governs all strata properties in Peninsular Malaysia and the Federal Territories. It replaced the Building and Common Property Act 2007 and unified every strata scheme, from condominiums to serviced apartments to mixed commercial blocks, under one framework.

Under SMA 2013, three bodies can manage a strata scheme depending on its stage:

Stage	Managing body	Trigger
Before first AGM	Developer (Promoter)	From vacant possession
After first AGM (before strata titles issued)	Joint Management Body (JMB)	Formed at first general meeting
After strata titles issued	Management Corporation (MC)	Formed automatically when titles issued

Each body collects maintenance charges and sinking fund contributions into two separate ring-fenced accounts. The money cannot be mixed or used for any other purpose.

Before SMA 2013, many buildings charged a flat rate per square foot. The Act changed this: every parcel is assigned a number of share units, and charges are calculated proportionally to those share units.

Share units are fixed numbers assigned to each parcel (your unit) and any accessory parcel (your car park bay) when the strata plan is approved by the Land Office. The formula is set out in state-specific Strata Titles Rules made under the Strata Titles Act 1985 (Act 318) and considers the built-up area, parcel type (residential, commercial, or car park), floor level, and whether the parcel enjoys lifts and air-conditioned common areas. A 1,200 sq ft unit on the 15th floor with full lift service will carry more share units than a 900 sq ft walk-up unit in the same development.

The maintenance charge formula

Once the JMB or MC prepares its annual budget, the rate per share unit is simply:

Rate per share unit = Total annual operating budget / Total share units in the scheme

Your monthly maintenance charge is then:

Your monthly charge = (Rate per share unit x Your share units) / 12

SMA 2013 requires a single rate per share unit across all parcels in the same management area. One block cannot be charged more per share unit than another simply because it is newer. Mixed developments (residential tower above a retail podium) may use different rates for different strata lot types where parcels serve significantly different purposes, following the Court of Appeal’s reading of Section 60(3) SMA 2013.

What the maintenance fee covers

The maintenance fee, also called charges in the Act, funds day-to-day operating and recurring costs. Typical items include:

Security guard services and access-control systems.
Cleaning and landscaping of common areas.
Lift maintenance contracts.
Utilities for common areas (pool, gym, lobby lighting, car park fans).
Building insurance for common property.
Administrative and accounting costs of the JMB or MC.
Routine repairs and minor replacements in common areas.

Think of it as the building’s monthly operating budget. Without it, lifts stop, guards disappear, and communal spaces fall apart within weeks.

What the sinking fund covers

The sinking fund is a capital reserve. Under Section 27 and Section 63 of SMA 2013, the money in the sinking fund account may only be used for:

Painting or repainting common property.
Acquiring moveable property for use in common areas.
Renewing or replacing fixtures, fittings, or equipment in common areas.
Upgrading and refurbishment of common property.
Any other capital expenditure the JMB or MC deems necessary and approves at a general meeting.

It cannot be used to pay for routine maintenance, security wages, or electricity bills. Those costs must come from the maintenance charges account.

Minimum sinking fund rate

The SMA 2013 sets a statutory minimum: the sinking fund contribution must be at least 10% of the maintenance charge for each parcel. The JMB or MC can raise this above 10% by passing a resolution at a general meeting, but it cannot fall below 10% unless KPKT approves a variation. Many professionally managed buildings collect 15 to 20% of the maintenance charge into the sinking fund to build adequate reserves, particularly for ageing high-rises where lift replacements and roof waterproofing are imminent.

Typical rates you will see in the market

Rates vary widely by location, age, and facilities. The figures below are indicative market ranges for 2024 to 2025 based on publicly available property listings and JMB notices. They are not set by any regulator; each building sets its own rate through its annual budget.

Property type	Maintenance fee range (per sq ft/month)	Example: 1,000 sq ft unit
Mass-market condo, suburban Klang Valley	RM 0.30 to RM 0.45	RM 300 to RM 450/month
Mid-range condo, city fringe KL	RM 0.45 to RM 0.70	RM 450 to RM 700/month
Luxury condo, KLCC / Mont Kiara	RM 0.70 to RM 1.50	RM 700 to RM 1,500/month
Serviced apartment (commercial title)	RM 0.35 to RM 0.60	RM 350 to RM 600/month

Your actual charge appears on the JMB or MC invoice and is based on share units. The per-sq-ft figure above is an approximation. The sinking fund is charged separately on top: at the statutory 10% minimum, a unit paying RM 400/month contributes an additional RM 40/month to the sinking fund.

How charges are set and changed

The JMB or MC presents an annual budget at the Annual General Meeting (AGM). The rate per share unit flows directly from that approved budget. The proposed budget must be circulated to owners before the AGM, a special resolution (75% of votes) is required to raise the sinking fund above the 10% minimum, and owners who disagree with an increase can bring the matter to the Strata Management Tribunal.

What happens if you do not pay

Non-payment is a civil debt enforceable by the JMB or MC. Under Section 77 of SMA 2013, the management body can charge interest of up to 10% per annum on outstanding amounts. Recovery options include filing a claim at the Strata Management Tribunal (claims up to RM 250,000, no lawyers required), civil court proceedings for larger amounts, and restricting access to certain common facilities under the scheme’s by-laws.

Persistent non-payment by even a minority of owners creates a funding shortfall that forces the MC to cut services or dip into the sinking fund, which the law prohibits. KPKT’s Strata Management Tribunal handles these cases within approximately 60 days and takes defaults seriously.

Key takeaways

Maintenance fees fund daily operations; the sinking fund is a capital reserve. They are held in separate accounts and cannot be mixed.
Both charges are calculated using share units, not raw floor area. Your share units are fixed in your strata title and reflect your unit size, type, floor, and facilities enjoyed.
The sinking fund minimum is 10% of the maintenance charge, set by SMA 2013. JMBs and MCs can raise it above 10% at an AGM.
Rates are set annually through a budget approved at the AGM. Owners can challenge unreasonable increases.
Non-payment attracts up to 10% interest per annum and can lead to Tribunal proceedings. Every defaulting owner creates a shortfall for the whole building.
Mixed developments may charge different rates per share unit for residential and commercial parcels, but must use a single rate within each strata lot type.

Frequently asked questions

Q: Can the JMB or MC increase my maintenance fee without notice? No. Any rate change must be passed at a general meeting, and the proposed budget must be circulated to owners in advance. An unilateral increase without an AGM resolution is a breach of SMA 2013.

Q: Is the sinking fund mine if I sell the unit? No. The sinking fund belongs to the management corporation, not individual owners. When you sell, the balance in the fund stays with the building. Buyers should check the fund’s health before purchasing, as a depleted fund means higher levies ahead.

Q: My building charges per square foot, not share units. Is that allowed? No, not for buildings formed after SMA 2013. If your MC-stage building still uses per-sq-ft billing, raise it at the AGM or file a complaint with the Strata Management Tribunal.

Q: Can I withhold maintenance fees if the JMB is not maintaining the building properly? No. SMA 2013 gives you no right of set-off. Continue paying and pursue the complaint through the Tribunal. Withholding exposes you to 10% interest and debt recovery action regardless of fault.

Q: How do I find out my unit’s share units? Your strata title document or the Schedule of Parcels (filed with the Land Office and available from the MC) lists every parcel and its assigned share units. The MC must also disclose this in the annual budget statement.

For more on strata ownership costs and responsibilities, see our guide on strata property in Malaysia. If you are still in the buying process, our booking fee and SPA guide explains what happens between paying your booking fee and taking vacant possession.

Educational content only, not financial advice. Verify current figures with official sources.