Strata & Building Management
Mixed development: how the charge is split between the mall, the offices and your apartment
In a mixed development the charge splits in two: general common property stays with the main management corporation under s.64(2), while limited common property is run by a subsidiary management corporation with its own accounts (ss.64(3)(a), 66, 67) and its own charge under s.68, apportioned by the s.65 formula A/B x C.
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| 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. |
What this actually costs you
The question here is different maintenance accounts for different components is a statutory option — check which one your parcel sits in before you buy. Maintenance charges are the one property cost that never stops and never shows up in a launch brochure's affordability table.
Limited common property is the concept that splits the bill
Section 2 defines a subsidiary management corporation as a body corporate comprising the proprietors of parcels designated for the exclusive benefit of limited common property. Limited common property is exactly what it sounds like: a part of the common property set aside for the exclusive use of some parcels rather than all of them — the residential tower's own lobby, pool deck and lift core in a scheme that also contains a mall, for example. It is designated under the Strata Titles Act 1985 by a comprehensive resolution, and the subsidiary management corporation comes into existence to manage it.
Two tiers, two sets of accounts
Once limited common property exists, the money splits. General common property charges continue to be managed by the main management corporation under s.64(2). Charges relating to the limited common property are managed solely by the subsidiary management corporation, which must establish its own maintenance account and its own sinking fund account under ss.64(3)(a), 66 and 67. That means two audits, two sets of accounts laid before meetings, and two balances for you to read before you form a view on a building's finances.
The apportionment formula for limited common property
Section 65 sets the arithmetic. Each parcel's share of the limited common property expenses is A divided by B, multiplied by C — where A is that parcel's share units, B is the aggregate share units of all parcels entitled to the limited common property, and C is the total contribution determined by the subsidiary management corporation. The denominator is the important part: it is not the whole scheme's share units, only the share units of the parcels that actually enjoy that limited common property. A small residential block sharing an expensive facility deck among few parcels carries a heavier per-unit cost than the same deck spread across a large one.
Section 68 is the charge you were not quoted
Proprietors whose parcels enjoy the exclusive benefit of limited common property must pay additional charges to the subsidiary management corporation under s.68 — and s.68(3) applies the same 10% sinking fund floor to that body. This is the line item buyers in mixed developments most often miss, because the marketing material quotes one rate. Ask specifically whether the quoted figure is the main scheme charge only, and if a subsidiary management corporation exists, ask for its rate, its accounts and its sinking fund balance as well.
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
A subsidiary management corporation is a body corporate of the proprietors entitled to limited common property (s.2), created under the Strata Titles Act 1985 after a comprehensive resolution designates that LCP. If your parcel enjoys LCP, you pay two charges: the main scheme's under s.60, and the sub-MC's under s.68, the latter apportioned by s.65 as your share units divided by the share units of all parcels entitled to that LCP, multiplied by the sub-MC's total contribution.
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| 1 | Ask whether a subsidiary management corporation exists in the scheme, and whether your parcel is a member of it. |
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| 2 | Ask for both charge rates — the main scheme's under s.60 and the sub-MC's under s.68. |
| 3 | Get the aggregate share units of the parcels entitled to the limited common property, so you can apply the s.65 formula yourself. |
| 4 | Ask for both sets of audited accounts and both sinking fund balances, not just the main scheme's. |
| 5 | Check what facilities sit in the limited common property — an expensive facility deck shared among few parcels is a high per-unit cost. |
Common questions
What is a subsidiary management corporation?
Under s.2 of Act 757 it is a body corporate comprising the proprietors of parcels designated for the exclusive benefit of limited common property. It is created under the Strata Titles Act 1985 after a comprehensive resolution designates that limited common property.
Do I pay two maintenance charges in a mixed development?
If your parcel enjoys limited common property, yes. The main scheme charge is under s.60 and the subsidiary management corporation's additional charge is under s.68.
How is the limited common property charge calculated?
By the formula in s.65: your parcel's share units divided by the aggregate share units of all parcels entitled to that limited common property, multiplied by the total contribution determined by the subsidiary management corporation.
Does the subsidiary management corporation keep its own accounts?
Yes. It must establish its own maintenance account and sinking fund account under ss.64(3)(a), 66 and 67, and s.68(3) applies the same 10% sinking fund minimum.
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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Ask whether a subsidiary management corporation exists in the scheme, and whether your parcel is a member of it.
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Ask for both charge rates — the main scheme's under s.60 and the sub-MC's under s.68.
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Get the aggregate share units of the parcels entitled to the limited common property, so you can apply the s.65 formula yourself.
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Ask for both sets of audited accounts and both sinking fund balances, not just the main scheme's.