JMB and MC Duties: Strata Management in Malaysia

If you have just been elected to a JMB or MC committee, you are now carrying real statutory duties under the Strata Management Act 2013 (Act 757) — this is not simply a neighbourhood role. Three things are most commonly misunderstood, and they are the three that cause the most trouble: the contribution to the sinking fund is fixed by law at ten per cent of the Charges (section 25), the Commissioner of Buildings (COB) at your local authority is your regulator, and disputes go to the Strata Management Tribunal, which handles claims up to RM250,000. This guide covers the duties in the order they will land on you.

Who manages the building, and when

Strata management passes through three stages, and knowing which one you are in determines who is responsible for what.

The handover from JMB to MC is not symbolic. After the MC's first annual general meeting, the JMB must transfer all balances in the maintenance account and the sinking fund account to the MC within not more than one month, after paying properly charged expenditure. A late or incomplete handover is a common source of dispute — document every ringgit.

The money: two accounts, and they do not mix

This is the part new committees most often get wrong.

• Maintenance account (the Charges). Pays running costs: cleaning, security, lifts, common-area electricity, insurance, waste, minor repairs.
• Sinking fund. Pays capital expenditure: repainting, lift upgrades, roof repairs, pump replacement — things that happen once in years and are expensive when they do.

Section 25 of Act 757 sets the sinking fund contribution as a sum equivalent to ten per cent of the Charges. It is not a figure a committee can quietly set lower because collections are slow. And sinking fund money is not available to cover an operating deficit — when it is used that way, the building does not become cheaper to run; it simply defers the cost of repainting onto a future committee, usually alongside larger arrears.

Charges are levied by share units per parcel, not equally per unit. Larger parcels pay more because they hold more share units. This gets challenged at almost every AGM, and the answer is in the Act rather than in negotiation.

The committee's core duties

Write these down and review them quarterly:

1. Maintain and manage the common property and keep it in a usable and safe state.
2. Determine and impose Charges sufficient to cover actual expenditure — not the figure easiest to pass at a meeting.
3. Collect sinking fund contributions at the statutory rate and hold them in a separate account.
4. Insure the building and maintain public liability cover.
5. Keep proper books of account and present them to owners at the AGM.
6. Comply with notices and orders from the local authority and the COB.
7. Maintain the register of parcel owners and other management records.
8. Hold annual general meetings and keep minutes.

Note duty 2. A committee that sets Charges too low to avoid objections does not become popular — it just defers the problem until the lift fails and there is no money to fix it.

Defect liability: claim before it closes

The developer places a deposit against defects in the common property. During the defect liability period for common property, those entitled to claim against that deposit include a parcel proprietor, the JMB, the MC, and any other interested person with the permission of the Commissioner of Buildings. Any unexpended deposit is refunded to the developer on the expiry of the defect liability period or completion of the rectification works, whichever is later.

The practical implication for a new committee: carry out a written, photographed defect inspection as early as possible, not in the final month. A defect list submitted late, undated and unphotographed is a defect list that will be disputed.

The regulator and the tribunal

• The Commissioner of Buildings (COB) at your local authority oversees strata management, receives complaints, and can issue directions. Get to know your COB officer before you need them.
• The Strata Management Tribunal resolves strata management disputes, including claims to recover outstanding maintenance charges and sinking fund contributions. The claim limit is RM250,000. The process is designed to be accessible without a lawyer, which matters a great deal for a volunteer committee.

Handling arrears without splitting the community

Arrears are the number-one financial problem in most strata schemes, and they get worse when handled inconsistently.

1. Publish a collection policy approved at the AGM — when reminders go out, when late interest applies, when a case goes to the tribunal.
2. Apply it evenly. An exception made for one neighbour becomes everyone's defence.
3. Keep proof of notice delivery. A tribunal claim stands or falls on evidence that notice was actually served.
4. Act early. Three months of arrears is recoverable; three years usually is not.

Running maintenance so it is auditable

A committee that is trusted is a committee that can show what was paid for and why. Four habits produce that:

• Every job gets a reference number, however small. A complaint with no reference is a complaint nobody can prove was closed.
• Before-and-after photo evidence, dated. This changes the character of an AGM entirely.
• A preventive maintenance schedule for lifts, pumps, fire equipment and air conditioning — scheduled work is cheaper than emergency work, and statutory inspection compliance is not optional.
• One place for records, not scattered across WhatsApp groups that vanish whenever the secretary changes. That problem is covered fully in running your business on WhatsApp without losing the records, and the complaint-to-resolution workflow covers the structure.

For appointing and supervising cleaning and security contractors, see managing cleaning and security vendors.

Frequently asked questions

Can an AGM approve a sinking fund contribution below 10%?
The ten-per-cent-of-Charges rate is set in section 25 of the Strata Management Act 2013. A meeting cannot vote to waive a statutory requirement. If your building is structurally underfunded, the answer is to revisit the Charges themselves, not to reduce the sinking fund contribution.

Can we use the sinking fund to pay the electricity bill?
No. The sinking fund is for capital expenditure, not running costs. Using it for operations conceals a deficit and leaves the building unfunded when a major item falls due. If the maintenance account does not cover costs, that is a Charges and collections problem.

What can we do about an owner who has not paid for years?
Bring a claim in the Strata Management Tribunal, which handles recovery claims up to RM250,000. The Act also provides other enforcement mechanisms. Take the COB's guidance on the right sequence for your case, and make sure your notice records are in order before filing.

Are committee members personally liable?
Committee members carry duties and must act properly in discharging them. This is not a decorative role, which is exactly why insurance, proper records and following the Act matter. If a decision looks legally risky, get advice before voting on it rather than after.

When should we start inspecting common property defects?
Immediately. The developer's defect deposit is only useful while the defect liability period is still open, and a claim supported by dated photographs and a written report is far stronger than a verbal complaint made at the last minute.

Is this guide legal advice?
No. It is a practical summary for volunteer committee members. The Strata Management Act 2013 and its regulations are the binding text, and for any dispute or enforcement decision you should refer to your COB or take legal advice.

Sources: Strata Management Act 2013 [Act 757] — the JMB/MC structure, maintenance and management duties, Charges levied by share units, and section 25 fixing the sinking fund contribution at a sum equivalent to ten per cent of the Charges; transfer of account balances from JMB to MC within not more than one month of the MC's first annual general meeting; the persons entitled to claim against the developer's defect deposit during the defect liability period for common property, and refund of any unexpended deposit to the developer. Strata Management Tribunal jurisdiction with a RM250,000 claim limit. The Commissioner of Buildings (COB) at the local authority is the regulator. Confirm the current position with your COB — this guide is not legal advice.