Strata Property Governance: JMB, MC and the Strata Management Tribunal

You buy a condominium unit, but who actually owns the lift, the swimming pool and the car-park driveway — and who has the right to collect a monthly fee from you? The answer lies in a layer of governance that buyers rarely read about until a dispute arises: the framework of the Strata Management Act 2013 (Act 757).

Act 757 centralises strata management in Peninsular Malaysia into a single regime. It repealed the Building and Common Property (Maintenance and Management) Act 2007 (Act 663) that previously governed JMBs (Section 153), and took over the management of common property — including the functions of the Management Corporation that were previously anchored in the Strata Titles Act 1985 (Act 318). (Act 318 itself was not repealed; it continues to govern the issuance and registration of strata titles.) Act 757 sets out who administers common property, how money is collected and spent, and where you go when a neighbour or the management fails to fulfil its responsibilities.

Who administers a strata building — the JMB or the MC?

Strata living in Malaysia moves through two stages of governance. The first stage is the Joint Management Body (JMB). It is established under Section 17(1) when vacant possession is delivered to buyers but before the Management Corporation comes into existence. The JMB is a temporary body run jointly by the developer and the parcel buyers. Committee members elected by the buyers form the Joint Management Committee (JMC) under Section 22.

The second stage is the Management Corporation (MC). It comes into existence automatically once the strata titles are registered in the names of the buyers. Unlike the JMB, the MC does not include the developer as part of its governing body and has far broader powers — it may own land, borrow money, enter into long-term contracts, and sue and be sued in relation to the common property.

The transition from JMB to MC is not merely symbolic. The JMB dissolves three months after the MC’s first Annual General Meeting (AGM) (Section 27(1)), and must transfer all balances of the maintenance account and the sinking fund, documents, assets and records no later than one month from the date of the first AGM (Section 27(2)(a)). If these obligations are not met, Section 28 provides that those balances and rights vest automatically in the MC once the transition period ends.

Feature	JMB (Joint Management Body)	MC (Management Corporation)
When it exists	After vacant possession, before strata title (s.17(1))	After strata titles are registered
Nature	Temporary / transitional	Permanent
Developer involved?	Yes, together with buyers	No (owners’ body only)
Committee	Joint Management Committee (JMC), s.22	Management Committee (MC Committee)
Power to own land / borrow	No	Yes
Can sue & be sued	Limited	Yes, in relation to common property

How is money collected — and why are there two accounts?

Every strata management body is required to maintain two separate accounts, and money cannot be mixed between them.

The first is the maintenance account (Section 50). This is the “day-to-day” fund — it may be used only for the actual or expected general and recurrent expenditure: maintenance, repairs, insurance, rent, rates, fees and the charges of managing the common property.

The second is the sinking fund account (sinking fund, Section 51). It is held specifically for large, periodic capital expenditure — repainting the building, renewing or replacing fixtures, upgrading and refurbishing the common property, and acquiring movable property for use of the common property. The sinking fund cannot be used for ordinary maintenance expenditure.

How much must be contributed? Charges are determined according to the share-unit rate of each parcel, while the contribution to the sinking fund is equivalent to 10% of the maintenance charge (Section 52(3)). The MC’s general meeting may set a higher rate, but the contribution cannot be less than 10% (Section 61(3)).

Item	Maintenance account (s.50)	Sinking fund (s.51)
Purpose	General & recurrent expenditure	Large capital / periodic expenditure
Examples	Common-area electricity bills, security wages, insurance, minor repairs	Repainting the building, replacing lifts, upgrading the pool
Contribution	According to parcel share units	Equivalent to 10% of the charge (s.52(3))
Can be cross-used?	No	No

What happens if an owner does not pay? For a parcel under an MC, if any amount remains unpaid after a period of 14 days, the owner is charged interest at the rate of 10% a year on a daily basis until paid (Section 52(5)). During the JMB period, the interest rate is set by the JMB but cannot exceed 10% a year (Section 25(6)(b)).

Where do you go when a dispute arises?

When charges go unpaid or the management fails in its duties, the primary forum is not the ordinary courts but the Strata Management Tribunal (SMT). It was established under Act 757 as a cheap, simple and fast forum.

The Tribunal’s jurisdiction is set out under Section 105, which refers to the list of claims in the Fourth Schedule, Part 1. Its key features:

• A claim cap of RM250,000. The Tribunal cannot hear a claim whose amount exceeds RM250,000 (Section 105(1)), or any dispute involving title to land or an interest in land (Section 105(3)).
• Types of claim include arrears of maintenance charges and sinking-fund contributions, orders to convene a general meeting, orders to invalidate a resolution, and disputes over the performance of functions under the Act (Fourth Schedule, Part 1).
• Who may file — the developer, buyers, parcel owners, the JMB, the MC, the management agent, and any other interested person with the Tribunal’s leave.
• No lawyers ordinarily. Parties are not entitled to be represented by a lawyer unless the case involves a complex question of law and one party would be severely prejudiced without representation.
• A prompt award. The Tribunal is required to make an award without delay and, where practicable, within 60 days from the first day of the hearing (Section 117(1)).

A Tribunal award is deemed to be an order of court and can be enforced accordingly. If the losing party refuses to comply, that non-compliance is a criminal offence under Section 123 — a fine not exceeding RM250,000 or imprisonment not exceeding 3 years or both, with a further fine not exceeding RM5,000 for each day the offence continues. A complaint of non-compliance is made to the Commissioner of Buildings (COB), which has the power to investigate and prosecute.

An award cannot be appealed in the ordinary way, but it can be challenged in the High Court on limited grounds such as procedural unfairness or serious irregularity.

Example: unpaid charges at a condominium

Suppose an MC at a condominium finds that an owner has failed to pay maintenance charges for eight months, amounting to about RM6,400 including late interest. This amount is well below the RM250,000 cap, so the MC can file a claim at the Strata Management Tribunal rather than the civil courts — without needing to hire a lawyer. If the Tribunal issues an award in the MC’s favour and the owner still refuses to pay, the MC can enforce the award as an order of court and, separately, lodge a complaint with the COB for prosecution under Section 123.

What’s next

• Check whether your property is still administered by a JMB or has already transitioned to an MC — this determines who lawfully collects charges and calls general meetings.
• If you are a committee member, make sure the maintenance account and the sinking fund are genuinely separate and that the sinking-fund contribution meets the 10% threshold (s.52(3) / 61(3)).
• For arrears below RM250,000, consider the Strata Management Tribunal before the civil courts — cheaper and faster.
• Refer to the full text of Act 757 and the Strata Management Regulations 2015, or contact the Commissioner of Buildings (COB) at your Local Authority for enforcement issues.

This article is general guidance, not legal advice. Section numbers and figures refer to the Strata Management Act 2013 (Act 757) and related regulations; verify against the latest statutory text before acting.