A Management Corporation Imposing Different Rates of Maintenance and Sinking Fund Charges (‘Charges’) In A Strata Property- Yes or No?
INTRODUCTION
The Strata Management Act 2013 in Malaysia governs the management and upkeep of stratified residential properties. It aims to ensure that these properties are well-managed, and that residents, developers, and landowners have their rights and responsibilities clearly defined.
However, a plethora of issues arises in the maintenance and management of stratified mixed developments i.e whether the Strata Management Act 2013 allows the imposition of different rates of charges in stratified mixed developments comprising residential and commercial.
FAQ
1. Does the Strata Management Act 2013 allow for the imposition of different rates of charges?
As a general rule, the Strata Management Act 2013 only allows for uniform rate in a development area, unless the requirements of introducing different rates of charges in Section 60(3)(b) SMA are fulfilled.
2. What is uniform rate of charges?
Uniform rate means a similar rate (per share unit) payable by each parcel owner for any parcel within a development area.
3. Are there any conditions that need to be fulfilled to apply for Different Rates of Charges?
Section 60(3) of the Strata Management Act 2013 permits application for different rates of charges when the parcels are used for significantly different purposes or when there are provisional blocks within the development area.
4. What constitutes parcels being used for significantly different purposes?
Significantly different purposes typically refer to a scenario where the purpose of a development, building, or facility differs in a substantial way from its original or intended use, which can impact its management.
5. What are the steps to introduce different rates of charges in a development area?
The steps required for compliance are quite detailed and time-consuming but to summarize, a general meeting must be convened and motions to approve the budget in respect of allocation of expenses to different components/parcels and different rates to each component must be deliberated and passed during the general meeting.
6. Are there any recent case law developments on the imposition of different rates of charges?
In a recent case of Aikbee Timbers Sdn Bhd & Anor v. Yii Sing Chiu & Anor And Another Appeal [2024] 3 CLJ 177, the Court of Appeal held among others, that different rates for maintenance charges and contribution to the sinking fund may be imposed by the property developer during the preliminary management period, and by the management corporation during their management period, in a mixed development that comprises parcels serving significantly different purposes.
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