By Abdul Hamid A Rahman
This is the conclusion of a three-part series on maintenance fee collection in strata properties. It examines enforcement challenges under the Strata Management Act 2013 (Act 757), the role of JMBs and MCs and the responsibilities of owners and tenants.
Lawyer Lai Chee Hoe also addresses key recommendations outlined in the first two installments, offering legal insights on financial sustainability and governance reforms.
Experts highlight the need for better enforcement, education, and financial planning to improve compliance and long-term stability in strata communities.
KUALA LUMPUR, March 13 (Bernama) -- It is not surprising, but experts have pointed out that some joint management bodies (JMBs) and management corporations (MCs) lack a clear understanding of their authority as stipulated in the Strata Management Act 2013 (Act 757) when it comes to collecting maintenance fee arrears.
Is this another unfortunate reality? Yes.
The crux of the matter is, many residents fail to take their financial obligations seriously, leading to mounting arrears that threaten the sustainability of strata properties.
It sounds cliched. The fact of the matter is effective enforcement, continuous education, and greater awareness are essential to ensuring compliance to improve strata living across the country. Only through collective effort can strata communities be sustainably well-maintained.
For JMBs and MCs, this means stronger financial management and better strategies for collecting arrears.
For owners and tenants, it is about understanding their responsibilities and making an effort — or contributing their share — to maintain the property they call home.
Legal Framework in Place
Chee Hoe & Associates litigation partner Lai Chee Hoe said Malaysia’s legal framework for strata management Act 757 is comprehensive enough, providing sufficient legal avenues to address maintenance fee defaulters, with no immediate need for amendments to the Strata Management Act 2013 (Act 757).
“Although Act 757 already criminalises non-payment of maintenance fees — similar to Singapore — the key difference lies in enforcement efficiency and different housing policies.
“Singapore has a more compliant society with a more robust recovery legal mechanism, whereas Malaysia faces delays in enforcement due to resource constraints or a reluctance to issue warrants of attachment within the Commissioner of Buildings (COB).”
He said the fastest way is for JMBs and MCs, collectively management bodies, to issue letters of demand via Forms 11 and 20 against defaulters. This is a more efficient way to recover arrears.
“Instead of amending the laws, efforts should focus on strengthening enforcement procedures and equipping COBs with sufficient resources,” he told Bernama.
Ongoing efforts are being made to streamline the legal process. To empower the COB to expedite legal action against defaulters, different means are being explored to ease the requirement for Attorney General’s Chambers (AGC) consent.
Lai specialises in strata management law. He is an internal advisory panellist for the Jabatan Perumahan Negara (National Housing Department) and the Housing and Local Government Ministry (KPKT).
He reviewed both the Housing Development (Control and Licensing) Act 1966 and Act 757.
Enforcement is a Challenge
Despite clear legal provisions, Lai said JMBs and MCs continue to struggle due to a lack of expertise, high legal costs, and a reluctance to pursue defaulters — factors that often lead to arrears spiralling out of control.
“The challenge is not the law itself; the real issue lies in enforcement,” he said.
Lai said under the current framework, JMBs and MCs can recover outstanding fees by seizing movable properties belonging to defaulters, as outlined in Sections 35 and 79 of Act 757.
“Yes, seized movable items often hold little value, making the process ineffective.
“More importantly, after obtaining a tribunal award or court order, a JMB or MC can proceed with various enforcement actions against defaulters, including garnishee orders (to recover the amount due), writs of seizure and sale, judgment debtor summonses, winding-up proceedings, bankruptcy actions, or even a charging order against the defaulter’s parcel,” he said.
While various legal avenues are available, JMBs and MCs often hesitate to enforce them, either due to financial constraints or a reluctance to spend good money to recover bad debts, he said.
“Some argue that legal fees are costly and that pursuing defaulters is not commercially viable.
“However, this challenge could be better managed if JMBs and MCs allocated funds for legal expenses in their annual budget,” he added.
Mandatory Tribunal Action after a Fixed Period Unnecessary
On whether legal amendments should mandate tribunal action after a set period of default, Lai said JMBs or MCs should retain the discretion to decide when to initiate claims.
“Typically, claims are filed after three months of non-payment. A rigid system may not be ideal. JMBs and MCs are best placed to evaluate their financial situation. A robust recovery action plan needs to be introduced in each strata scheme.”
“I caution against publicising the unit numbers of defaulters. While it could act as a deterrent, it may also expose JMBs or MCs to potential defamation lawsuits,” he said.
JMBs and MCs not Responsible for Utility Bill Collection
Lai also dismissed a recent proposal requiring residents to pay utility bills through JMBs or MCs. He said this is legally unfeasible, particularly for residential schemes.
“There are existing utility payment structures where residents pay directly to service providers. This system is already functional and does not require restructuring.
“In commercial schemes with bulk meters, JMBs and MCs already handle utility payments, but extending this to residential units would be problematic, as individual meters are mandated under the Housing Development (Control and Licensing) Act 1966,” he explained.
Enter into Alternative Revenue Streams with Care
Some JMBs and MCs have explored alternative revenue streams, such as leasing rooftop space, renting billboard areas, and installing vending machines to generate additional income.
“These methods are legally permissible, provided they involve common property and all revenue is deposited into the maintenance account, as required under Sections 23(3) and 50(2) of Act 757.
“However, it is crucial to have proper legal agreements, including exit clauses and indemnity terms, to protect JMBs and MCs from liabilities,” he said.
Structured Training and Awareness
Enhancing legal knowledge, structured training, and financial literacy campaigns can significantly improve maintenance fee collection and overall property management among JMBs, MCs, and owners.
Associate Professor Dr Rohayu Abd Majid, Head of Postgraduate Studies at the College of Built Environment, Universiti Teknologi MARA (UiTM), said JMBs and MCs should actively participate in legal workshops and seminars in collaboration with legal practitioners and property management experts to strengthen their enforcement capabilities.
“Regular dialogues with the COB would provide valuable insights into enforcement procedures, ensuring that JMBs and MCs correctly apply legal provisions such as issuing Form 11 for overdue charges and initiating proceedings at the strata management tribunal,” she said.
The associate professor said structured training programmes could enhance efficiency among JMBs and MCs in fee collection. Those who are better-trained will be more confident about enforcing regulations, fostering trust among residents.
"Training should focus on legal knowledge, financial management, conflict resolution, and communication strategies to ensure JMBs and MCs have a holistic understanding of property governance,” she said.
She noted that transparent financial reporting and improved communication could help build residents' confidence in management bodies, reducing disputes and default rates.
The academician also pointed out that many defaulters fail to grasp the broader implications of unpaid maintenance fees, which can deteriorate communal living standards and lower property values.
“While some residents struggle with financial constraints, others may not fully understand the impact of arrears on building maintenance and facility upkeep.
“Effective campaigns like budgeting workshops, visual reports showcasing the benefits of fee payments, and clear communication on legal consequences under Act 757 are essential.
“Rather than using scare tactics, JMBs and MCs should educate residents on the importance of timely payments through engaging community initiatives and transparent financial disclosures,” she added.
She also suggested that JMBs and MCs explore community-driven approaches to instill a culture of timely payments.
No Suspects, only Stakeholders
There are no "suspects" when it comes to maintenance fee arrears, only stakeholders - JMBs/MCs and residents.
If JMBs and MCs demonstrate strong financial management literacy while ensuring transparency and accountability, collection rates will naturally improve.
Similarly, if residents prioritise maintenance fees as they do essential utilities like water and electricity, timely payments will become the norm.
Simple? In theory, yes. But in practice, successful implementation on the ground is the true test.
-- BERNAMA
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