Strata & Building Management
Seven checkable signals that tell you whether a building is well managed — before you buy
Seven signals you can verify from documents rather than impressions: audited accounts filed and laid before each AGM, meetings held on time, the arrears ratio, the sinking fund balance against building age, the manager's registration or bond, the insurance policies, and whether the s.31 or s.73 certificate is produced on request.
Quick summary
Quick answer
Best for
Risk level
Buyer action
| Best for | Owners assessing whether their building is competently run, and buyers using management quality as a filter. |
|---|---|
| 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. |
Authority and its limits
What follows takes apart audited accounts filed on time, AGMs held on time, arrears ratio, sinking fund balance, insurance, contracts, minutes. All verifiable. Knowing where a manager's authority ends is what lets you tell a firm decision from an overreach.
The paper trail the Act already requires
You are not asking for favours. Audited accounts are compulsory annually — ss.21(1)(g) and 26(1)(b) for a joint management body, ss.59(1)(g) and 62(1)(b) for a management corporation, with paragraph 7(10) of the Second Schedule requiring an approved company auditor. Paragraph 7(7) requires them to be laid before each annual general meeting, and paragraphs 12(1) and 12(3)(b) require a copy plus the auditor's report to go out with the notice at least fourteen days beforehand. A building that cannot produce two consecutive years of audited accounts has told you something definitive.
Three numbers inside those accounts
The collection rate — total charges billed against total collected — tells you whether the operating budget is real. The arrears figure and its ageing tell you how much of the balance sheet is uncollectable; arrears more than twelve months old rarely come in. The sinking fund balance, read against the age of the lifts, the roof waterproofing and the external paint, tells you whether a special levy is a matter of if or when. Those three, taken together, describe the next five years of the building more accurately than any brochure.
Governance and the manager
Check that meetings are actually happening within the statutory deadlines — the first JMB meeting within twelve months of vacant possession under s.17(1)(b) with s.18(1), the MC's first AGM within one month of the initial period expiring under s.57(1), and annual general meetings since. Then check the manager: registration as a registered property manager under Act 242, or the Form 12 bond of twelve months' fees or RM50,000 whichever is higher under regulation 21 or 32. One of the two must exist.
The two documents that test responsiveness
Ask for the insurance policies, and ask for the certificate of the state of the funds under s.31 for a joint management body or s.73 for a management corporation. The certificate is the best single test in the list, because refusing to issue it is an offence under regulation 19(2) carrying up to RM50,000 or three years, and because producing it requires the body to commit the balances to a signed document. How long that takes, and whether it arrives at all, is the most reliable signal of competence you will get before you own the unit.
Verify this against your own building
Verify the managing agent's registration and ask for the appointment terms and the last two years of audited accounts. Those three documents answer most questions about competence.
Buyer checklist
Every one of these is a document, not an opinion. Audited accounts under ss.21(1)(g), 26(1)(b), 59(1)(g) and 62(1)(b), laid before each AGM under paragraph 7(7) of the Second Schedule and circulated with the notice fourteen days ahead. Meetings convened within the statutory deadlines. The arrears figure and its ageing. The sinking fund balance against the age of the lifts, roof and paint. The manager's registration under Act 242 or the Form 12 bond. The insurance policies. And the s.31 or s.73 certificate, produced on request.
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| 1 | Two consecutive years of audited accounts, with the auditor's report. |
|---|---|
| 2 | Evidence the AGMs were held and the notices went out fourteen days ahead with the accounts attached. |
| 3 | The collection rate, and the arrears figure with its ageing. |
| 4 | The sinking fund balance, read against the age of the lifts, roof and external paint. |
| 5 | The manager's registration under Act 242, or the Form 12 bond under regulation 21 or 32. |
| 6 | The current insurance policies. |
| 7 | The certificate of the state of the funds under s.31 or s.73 — and note how long it takes to arrive. |
Common questions
What is the single best document to ask for?
The certificate of the state of the funds — s.31 for a joint management body, s.73 for a management corporation. Refusing to issue it is an offence under regulation 19(2) of the 2015 Regulations.
How do I know if the accounts are properly audited?
They must be audited 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 an MC.
What does a thin sinking fund actually mean for me?
Read the balance against the age of the lifts, roof waterproofing and external paint. If those cycles are due and the balance is small, a special levy is likely.
How do I check the manager is lawful?
Ask for registration under Act 242, or the Form 12 bond of twelve months' fees or RM50,000 whichever is higher under regulation 21 for a JMB or regulation 32 for an MC.
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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Two consecutive years of audited accounts, with the auditor's report.
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Evidence the AGMs were held and the notices went out fourteen days ahead with the accounts attached.
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The collection rate, and the arrears figure with its ageing.
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The sinking fund balance, read against the age of the lifts, roof and external paint.