Strata living has become the norm in urban Malaysia, but awareness of the rules, rights and responsibilities that come with it remains limited. The Strata Sense series aims to shed light on strata living — covering everything from the role of the management bodies to the purpose of service charges and sinking funds as well as the importance of understanding house rules.

In this first instalment, we explore the fundamentals of strata living: the function of management bodies, the concept of common property, how disputes are handled and the importance of sound financial management.

A brief legal history
The concept of strata living in Malaysia dates back to the 1980s, with the introduction of the Strata Titles Act 1985 (Act 318). This was followed by the Building and Common Property (Maintenance and Management) Act 2007 (Act 663), which introduced Joint Management Body (JMB) and Management Corporation (MC) to oversee property maintenance. The most recent development, the Strata Management Act 2013 (Act 757), offers a comprehensive legal framework for the governance of stratified properties. Act 663 was repealed after Act 757 came into effect.

“This legislative framework ensures that common property is properly managed, maintenance funds are accounted for and owners have a structured mechanism to address grievances,” says Jerry Lee Wei Keat, director and head of property management at LaurelCap Group.

Despite decades of implementation, misconceptions persist, says Knight Frank Property Management (KFPM) Sdn Bhd director of property management Nageswaran Muniandy.

“A common misconception is that parcel ownership grants residents free rein. While parcel ownership provides certain rights, residents are required to adhere to the by-laws and rules and regulations for the common area,” he explains. “For example, there are specific rules for renovations, including façade uniformity, design standards and working hours. These rules ensure uniformity of the building and minimise disruptions to neighbours.”

Another misunderstanding concerns service charges and sinking funds, often seen as unnecessary.

“These funds don’t directly maintain individual parcels but they are crucial for essential services, repair and maintenance, and improvement projects — all of which help sustain or enhance property values,” he says.

Nageswaran urges residents to understand Act 757 and take an active role in property matters by attending general meetings to stay informed on maintenance plans, finances and other decisions affecting the community.

Role of management bodies
A strata development is overseen by a JMB, MC or Subsidiary Management Corporation (sub-MC), depending on the property’s development stage and complexity. Each body has the same goal — to collect maintenance charges, keep the common areas well managed and maintained, and ensure that by-laws are followed.

“A JMB must be formed within 12 months of delivering vacant possession, [assuming strata titles haven’t been issued]. It comprises both purchasers and developer,” says Nageswaran.

“An MC, on the other hand, is formed once any strata title is issued. After 25% of aggregate share units are transferred to proprietors, the developer must call the MC’s first annual general meeting. Only proprietors are MC members.

“A sub-MC is formed when a single strata scheme consists of multiple components — residential, retail and commercial — and includes limited common property (LCP), which is intended for the use of specific proprietors.”

According to LaurelCap’s Lee, committee members with relevant professional backgrounds can significantly improve property management outcomes.

“There are no legal requirements for committee members but, ideally, they should be responsible, knowledgeable and committed to the community. While there are no mandatory qualifications, having professionals such as architects, lawyers, accountants, insurance specialists, tax agents, property managers, IT professionals and builders on the committee can greatly enhance decision-making and operational efficiency,” he says.

Lee advises committees that choose to self-manage to seek guidance from authorities such as the Commissioner of Buildings (COB) or legal professionals. “Registered property managers have limitations in their role, but they can mitigate many potential legal matters, making their appointment worthwhile,” he says.

Understanding common property
A key principle of strata living is shared responsibility for common property — areas that are not part of any individual parcel but shared among all proprietors.

An LCP, by contrast, is reserved for specific proprietors, typically in mixed-use developments. (Note that LCPs exist only when a sub-MC has been established in the development.) For instance, retail owners in a mixed-use project may have exclusive access to loading bays or service corridors. These areas are maintained by the relevant sub-MC, ensuring fair allocation of costs and responsibilities.

According to Nageswaran, understanding the distinction between common property and LCP helps avoid disputes and ensures fair cost distribution. He says: “Residents should use these shared spaces responsibly and report damage or concerns. Property managers must implement preventive maintenance and ensure timely repairs.”

Handling disputes
Community living inevitably brings differing opinions but open communication and proactive management help minimise conflict.

“Regular town hall meetings facilitate open discussions and transparency between management and residents. Management bodies can address disputes through internal resolutions, such as reminder letters and notices, or escalate issues with warning letters. Penalties will be imposed if the dispute is a breach of by-laws,” says Nageswaran.

Common issues include unauthorised renovations and keeping pets. “Owners are given renovation guidelines but some proceed with unauthorised works that affect the building’s façade. In such cases, management will initiate a discussion with the owner to highlight the impact and provide a grace period for reinstatement. If the owner fails to comply, the matter will escalate to the COB, where a stop-work order will be issued until the owner complies and reinstates the unit’s façade to its original condition.”

Pets are allowed under the Strata Management (Maintenance and Management) Regulations 2015, but it is limited to small animals. Local authority rules govern dog breeds and by-laws may restrict how pets use common property.

“As keeping pets can be a sensitive issue, adequate regulations can be imposed and communicated regularly. If residents keep large or prohibited breeds, management can issue removal notices and escalate complaints to authorities,” Nageswaran says.

If the soft approach fails, management bodies can escalate the issue to the COB, Strata Management Tribunal or civil courts.

If management bodies themselves fail in their duties, residents can take action, according to LaurelCap’s Lee.

“If residents feel that the management is not fulfilling its responsibilities, they may seek legal advice or consult the local authorities such as COB to take the necessary steps,” he says.

Nageswaran adds: “Residents can lodge complaints with the COB, highlighting the breaches and non-compliances of the management body; file claims with the Strata Tribunal; or even call an extraordinary general meeting (EGM) with the support of at least 25% of share units. Legal action is also possible in cases of mismanagement or fund misuse.”

Keeping finances in check
Effective financial management is vital for a sustainable strata community. Monthly maintenance fees cover the recurring costs of managing and maintaining the property and must be paid on time.

“Late payments disrupt maintenance, cause service delays and force management to divert resources to debt recovery — raising overall costs,” says Nageswaran.

This issue underscores the importance of having a well-structured budget. “A proper budget should include clear categories — contractual costs, maintenance, administrative expenses, utilities, major repairs — and be based on historical data and accurate projections to prevent under- or over-budgeting,” he adds.

Poor financial planning can lead to building deterioration, low property values and reduced marketability. Contributing factors to poor financial management include underpriced service charges, overspending, weak collection systems and lack of preventive maintenance expertise.

Strata living thrives on shared responsibility, transparent communication and informed participation. With better awareness and cooperation, residents and management bodies can foster thriving, well-managed communities.

In the next instalment of Strata Sense, we will delve deeper into financial management and its role in ensuring the sustainability of strata developments.