6.2 Strata Titles Act & Strata Management Act (JMB vs MC)

Strata Titles Act 1985 — Titling the Building

The Strata Titles Act 1985 (Act 318) allows a multi-storey or gated development on a single master title to be subdivided so that each unit receives its own strata title. Key terms a negotiator must define precisely:

• Parcel — the individual unit (apartment, office suite, shop lot) that a proprietor owns and can sell or charge independently.
• Accessory parcel — an additional area allotted to a parcel, such as a car park bay or store room; it cannot be dealt with separately from its parcel.
• Common property — areas not comprised in any parcel and shared by all proprietors: lifts, corridors, staircases, roofs, swimming pools, guardhouses and the land itself.
• Share units (unit syer) — the figure assigned to each parcel that fixes the proprietor's voting weight, their share of maintenance contributions, and their undivided share in the common property. A larger penthouse with more share units pays more and votes with more weight than a studio unit.
• Limited common property — common areas restricted to certain parcels only, for example a facility floor serving one block.

Until the strata titles are issued, every buyer's interest sits on the developer's master title — which is exactly why the management legislation below matters so much.

Strata Management Act 2013 — Who Runs the Building

The Strata Management Act 2013 (Act 757) governs maintenance and management of stratified developments. It creates two successive management bodies:

The exam loves the trigger point: the JMB is the pre-strata-title body that includes the developer, while the MC is the post-strata-title body of owners alone. A scheme passes through developer management, then the JMB, and finally the MC.

Charges, Sinking Fund, By-laws and the COB

Two funds flow from parcel owners, and the distinction is frequently tested:

• Maintenance charges (service charges) — monthly contributions that pay for day-to-day recurrent expenses: security, cleaning, lift servicing, pool upkeep, management staff and utilities for common areas.
• Sinking fund — a reserve for long-term capital expenditure such as repainting the facade, replacing lifts or major roof repairs. By law it must be at least 10% of the monthly maintenance charges and it cannot be raided for routine bills.

By-laws are the statutory rules binding all proprietors and residents, made under the Act; house rules are additional regulations the JMB or MC adopts for daily living (pet policies, renovation hours). Neither can override the Act.

The Commissioner of Buildings (COB) — an officer appointed under the Act, usually within the local authority — supervises strata schemes: enforcing the developer's duty to convene the first meetings, maintaining records of management bodies, receiving charges and sinking fund information, and acting on complaints. Disputes can also go to the Strata Management Tribunal.

What a Negotiator Must Disclose to a Strata Buyer

Strata resales carry hidden liabilities, so before marketing or closing a unit the negotiator should verify and disclose:

1. Outstanding maintenance charges and sinking fund arrears — these follow the parcel and a buyer may inherit pressure from the management body;
2. The monthly charge rate and any confirmed or proposed special levy (e.g. for a lift replacement);
3. Known defects, leaks or inter-floor disputes affecting the unit;
4. Whether the scheme is still under the developer/JMB or has matured to an MC, since that affects responsiveness and sinking fund health;
5. Any restrictive by-laws that matter to the buyer (short-term rental bans, pet prohibitions).

A worked example fixes the numbers: if a condominium levies RM350 per month in maintenance charges on a unit, the owner must also pay at least RM35 per month (10%) into the sinking fund — RM385 in total monthly commitment, or RM4,620 a year that a buyer of an older high-rise should budget for alongside loan instalments. During the interim period before the JMB's first AGM, the developer remains statutorily responsible for managing the scheme, must insure the building, and must convene that first meeting within the prescribed time, failing which the COB can enforce. If owners and the management body later fall into dispute — over arrears, by-law breaches or levies — the Strata Management Tribunal offers a low-cost forum that generally excludes lawyers.

Failing to surface arrears is a classic complaint that lands on negotiators after completion — the buyer discovers thousands of ringgit owing and blames the agent who "forgot" to ask.