Condo Living in Malaysia: Why Your Maintenance Fee Has a Sibling Called the Sinking Fund

You bought the unit. You did not buy the lift, the guardhouse, the swimming pool, or the pipe running through the wall you share with your neighbour. Someone still has to pay for all of that — and the law splits the bill into two accounts you’re legally required to keep separate.

Most owners only ever notice one line on their monthly statement: “maintenance.” Few realise a second, smaller charge sits next to it — the sinking fund — doing a completely different job, protected by its own rules.

Two charges, two purposes

The maintenance charge (sometimes called the service charge) funds the building’s recurring, month-to-month running costs: cleaning, security guards, lift servicing, landscaping, common-area electricity and water, insurance, and management staff.

The sinking fund is money set aside for things that happen rarely but cost a lot: repainting the facade, replacing a lift, re-roofing, resurfacing the car park. Sections 11(4)(c), 24(2) and 51(2) of the Strata Management Act 2013 restrict what the sinking fund can be spent on to capital items like these — it cannot quietly be raided to cover a shortfall in monthly cleaning costs.

During the developer’s management period, Section 13(4) of the Act fixes the sinking fund contribution at not less than 10% of the maintenance charge. A later management body can vote to raise that rate at a general meeting; in practice it rarely drops back below the statutory floor.

Both charges are calculated the same way: in proportion to each parcel’s allocated share units (Section 12(3)), a figure assigned under the Strata Titles Act 1985 that reflects a unit’s relative value and benefit from the common property — not simply its floor area. Two units of identical size can carry different share units, and therefore different bills, if one has more exclusive use of common facilities.

Who actually collects it: JMB, then MC

Before individual strata titles exist, there is no Management Corporation to collect anything. The Act fills that gap with the Joint Management Body (JMB) — a body corporate formed under Section 17, made up of the developer and purchasers, which must hold its first annual general meeting within 12 months of vacant possession being delivered.

The JMB runs the building — collecting charges, maintaining common property, enforcing by-laws — until the Management Corporation (MC) takes over. The MC is not created by the Strata Management Act 2013 at all: it comes into existence under the Strata Titles Act 1985, the moment individual strata titles are issued and the strata register opens. Once that happens, the JMB’s role ends and the MC takes on the same duties with owners as its members.

	JMB	MC
Created by	SMA 2013, s.17	Strata Titles Act 1985
Trigger	First AGM, within 12 months of vacant possession	Strata titles issued, register opens
Members	Developer + purchasers	All parcel owners

A Commissioner of Buildings (COB), appointed by the State Authority for each local authority area, oversees this handover, including making sure a JMB actually forms on time and resolving disputes between developer and purchasers along the way.

One rate for everyone — mostly

By default, every parcel pays maintenance charges at the same rate per share unit (Sections 21, 25, 52 and 59) — an anti-favouritism rule so a developer or management body can’t quietly charge some owners more.

The exception sits in Section 60(3): an MC may set differential rates only in narrow circumstances, broadly where parcels are put to genuinely different uses (say, retail lots within a mixed residential-commercial scheme). Courts have been strict here — a factor already baked into how share units were calculated cannot then be reused to justify charging that parcel a different rate.

Common mistakes

• Assuming the sinking fund is “extra maintenance money” the JMB/MC can dip into freely. It’s ring-fenced by law for capital works, not routine costs.
• Paying only the maintenance charge and skipping the sinking fund line. Both are a single statutory obligation under Section 25(1) — partial payment doesn’t discharge it.
• Expecting a strata title (and therefore an MC) the day you get your keys. Vacant possession, JMB formation, and strata title issuance are three separate milestones that can be years apart.
• Taking a maintenance dispute straight to the civil courts. Claims over unpaid or disputed charges generally go to the Strata Management Tribunal, which has its own claim-value limits and procedure.

What’s next

Read the Act’s own text on the Attorney General’s Chambers portal for the full section-by-section detail, check whether your scheme is still under a JMB or has an MC by asking your management office directly, and if you’re renting rather than owning, see Finding a Rental in Malaysia for how these buildings get shown and let out in the first place.