Strata & Building Management
How to read your building's accounts before the AGM vote
Audited accounts must be laid before every AGM, and a copy plus the auditor's report must reach you with the notice at least 14 days beforehand (Second Schedule paras 7(7), 12(1) and 12(3)(b)). Here is what to read in them before you vote.
Quick summary
Quick answer
Best for
Risk level
Buyer action
| Best for | Owners questioning what they pay, and buyers modelling the holding cost of a high-rise before they commit. |
|---|---|
| Risk level | Medium |
| Buyer action | Send Lewis your building name, the charge you pay and what you are trying to decide, and he will tell you what to check first. |
The number on your bill
The question here is five lines in the audited accounts tell you whether the building is solvent. Most owners never look at any of them. Owners argue about charges constantly, and most of the argument disappears once the statutory basis is on the table.
What the Act requires the building to produce
A joint management body must open and maintain a maintenance account under s.23 and a sinking fund account under s.24. A management corporation does the same under ss.60 and 61. Both must have those accounts audited annually — the obligation appears at ss.21(1)(g) and 26(1)(b) for a JMB, and ss.59(1)(g) and 62(1)(b) plus paragraph 7(10) of the Second Schedule for an MC. The auditor must be an approved company auditor appointed by the body or its committee. None of this is discretionary, and a building that has not produced audited accounts is not merely disorganised — it is in breach.
You get them 14 days before you are asked to vote
Paragraph 7(7) of the Second Schedule requires audited accounts to be prepared and laid before each annual general meeting. Paragraphs 12(1) and 12(3)(b) require a copy of the audited accounts and the auditor's report to accompany the notice of the AGM, which must be sent to all proprietors at least 14 days before the meeting; s.22(2) applies the same regime to a joint management body. That fourteen-day window is the whole point — it exists so owners arrive at the meeting having read the numbers, not so the accounts can be tabled on the day and voted through in ten minutes.
The five lines that actually matter
First, the collection rate: total charges billed against total collected. A building collecting well below its billing is running on borrowed time regardless of what the budget says. Second, the arrears figure and its ageing — arrears over twelve months old are usually arrears that will never be collected. Third, the sinking fund balance, read against the age of the lifts, the roof and the external paint. Fourth, the largest single expense line, which in most schemes is security, and how it has moved over three years. Fifth, whether any routine repair has been charged to the sinking fund, which is outside the permitted purposes in ss.11(4), 24(2) and 51(2).
What to do when the accounts do not arrive
If the AGM notice arrives without the audited accounts and the auditor's report, say so in writing before the meeting rather than after. The requirement is in paragraphs 12(1) and 12(3)(b) of the Second Schedule and it is not a formality — a resolution passed on accounts that owners never received is a resolution with a procedural problem attached to it. If the accounts have not been audited at all, that is a separate breach of ss.21(1)(g)/26(1)(b) or ss.59(1)(g)/62(1)(b), and it is a matter the Commissioner of Buildings can be asked about.
Verify this against your own building
Ask management for the latest audited accounts, the current charge rate per share unit and the sinking fund balance before you rely on anything here. Rates and building costs differ; the statutory framework does not.
Buyer checklist
Both a JMB and a management corporation must maintain a maintenance account and a sinking fund account (ss.23 and 24 for a JMB; ss.60 and 61 for an MC), have them audited annually by an approved company auditor, and lay the audited accounts before each AGM. The accounts and the auditor's report must be sent with the AGM notice at least 14 days before the meeting.
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| 1 | Check the AGM notice arrived at least 14 days before the meeting, with the audited accounts and auditor's report attached. |
|---|---|
| 2 | Compare total charges billed against total collected to get the real collection rate. |
| 3 | Read the arrears ageing, not just the arrears total. |
| 4 | Read the sinking fund balance against the age of the lifts, roof and external paint. |
| 5 | Scan the sinking fund expenditure for routine repairs, which fall outside ss.11(4), 24(2) and 51(2). |
| 6 | If the accounts were not audited by an approved company auditor, raise it before the vote, not after. |
Common questions
Must the building's accounts be audited?
Yes, annually, by an approved company auditor — ss.21(1)(g) and 26(1)(b) for a JMB, ss.59(1)(g) and 62(1)(b) plus Second Schedule paragraph 7(10) for a management corporation.
When am I entitled to see the audited accounts?
A copy of the audited accounts and the auditor's report must accompany the AGM notice, sent to all proprietors at least 14 days before the meeting — Second Schedule paragraphs 12(1) and 12(3)(b).
What accounts must the building keep?
A maintenance account and a sinking fund account — ss.23 and 24 for a joint management body, ss.60 and 61 for a management corporation.
What if the accounts are tabled only on the day of the AGM?
That does not meet the 14-day requirement in the Second Schedule. Raise it in writing before the meeting; a resolution passed on accounts owners never received carries a procedural defect.
Lewis Chong
REN 69566 · IQI GlobalProperty advisor helping KL, JB, and Penang buyers make data-backed property decisions.
Related reading
Use one buyer framework across different news.
How your maintenance charge is actually calculated — share units, not floor area
Malaysian maintenance charges are apportioned by allocated share units under the Strata Management Act 2013, not by floor area — s.8(1) sends the computation to the First Schedule, and s.12(3), s.25(3) and s.60(3) apply it through the developer, JMB and MC periods. Here is how to read your own bill and when a different rate is lawful.
Lewis Conclusion
If you only remember one thing: ask for your share unit figure, not your square footage. It is the number that sets your bill and your vote for as long as you own the unit, and it is printed on documents you are entitled to see.
The sinking fund explained
The sinking fund is a statutory capital reserve set at a minimum of 10% of the maintenance charge under ss.12(4), 25(4), 52(3), 61(3) and 68(3) of Act 757. It may only be spent on capital items — painting, replacing fixtures, upgrading common property — and a general meeting may raise the rate but never drop it below 10%.
Lewis Conclusion
Ask two questions before you buy into any high-rise: what is the sinking fund balance, and when were the lifts, the roof and the external paint last done. If the balance is small and those items are old, the shortfall is coming to you as a special levy — it is only a question of which year.
What actually happens if you stop paying maintenance charges
Stopping payment of maintenance charges triggers a statutory sequence, not a negotiation: a Form 11 notice from a JMB (s.34(1)) or Form 20 from a management corporation (s.78(1)) giving not less than 14 days, interest capped at 10% per annum, then a debt claim, a warrant of attachment over your movable property, or criminal prosecution.
Lewis Conclusion
Withholding charges is the one protest that cannot work, because arrears also disqualify you from the committee and from voting — the exact levers you would need to fix whatever you are protesting about. Pay under protest, then fight it at the tribunal or the AGM where you still have standing.
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Check the AGM notice arrived at least 14 days before the meeting, with the audited accounts and auditor's report attached.
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Compare total charges billed against total collected to get the real collection rate.
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Read the arrears ageing, not just the arrears total.
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Read the sinking fund balance against the age of the lifts, roof and external paint.