Maintenance Fees & Sinking Fund in Malaysia: How They're Calculated and What Happens If Unpaid
Your maintenance fee and sinking fund are the two monthly bills every strata owner in Malaysia pays: the maintenance fee shares the building’s running costs according to your unit’s share units, and the sinking fund, at least 10% of that fee, is saved for major works. Fall behind and you face interest of up to 10% a year, lose your AGM vote, may have your access card deactivated, and can ultimately be prosecuted. Here is how it all works, with worked examples.
Short answer
Your maintenance fee is the building’s annual budget shared in proportion to your parcel’s allocated share units. The sinking fund is a separate account set at 10% of that fee, which a general meeting may raise but never lower. Fall behind and management can charge interest of up to 10% a year, take away your AGM vote and deactivate your access card 14 days after written notice.
Key numbers at a glance
| How charges are set | The annual budget split by each parcel's allocated share units |
|---|---|
| Sinking fund | 10% of charges by default; can be raised, never lowered |
| Sinking fund may pay for | Repainting, replacing fixtures, refurbishment, not running costs |
| At vacant possession | First 4 months of charges and sinking fund in advance (Schedule H) |
| Late payment | Interest up to 10% a year, from 14 days after written notice |
| Access card | Deactivated 14 days after notice; RM50 cap to reactivate |
| Ignoring a statutory demand | Fine up to RM5,000, jail up to 3 years, or both |
| Arrears certificate | Issued by the developer, JMB or MC; fee capped at RM50 |
Key points in 30 seconds
- Maintenance charges are split in proportion to each parcel’s allocated share units, set by the developer during its management period and then by the JMB or MC.
- The sinking fund defaults to 10% of charges; a general meeting may raise it but not go below 10%, and it can only be spent on capital items such as repainting and replacing equipment.
- On a new strata home, the first four months of charges and sinking fund are paid in advance at vacant possession, then monthly in advance (Schedule H SPA).
- Unpaid sums 14 days after written notice attract interest of up to 10% a year, and management may deactivate your access card (reactivation fee capped at RM50).
- Ignoring the statutory demand notice is an offence: a fine of up to RM5,000, up to 3 years’ jail or both, plus up to RM50 a day for a continuing offence.
- Before buying a subsale unit, get the JMB or MC’s certificate of arrears; the Act caps the fee at RM50.
What are maintenance fees and the sinking fund?
If you own a condo, serviced apartment or unit in a gated landed strata scheme, you pay two amounts every month: the maintenance fee (the Act calls it “Charges”, caj in Malay, often billed as the service charge) and the sinking fund (kumpulan wang penjelas). Under the Strata Management Act 2013 (Act 757) they go into two separate accounts, and the law ring-fences what each can pay for.
| Maintenance fee (maintenance account) | Sinking fund (sinking fund account) | |
|---|---|---|
| Pays for | Day-to-day upkeep of common property, cleaning, security, insurance premiums, minor painting, electrical inspections, rent and rates if any, managing agent’s fees | Repainting common property, buying movable property for it, renewing or replacing fixtures and fittings, upgrading and refurbishment, other capital expenditure |
| Amount | The budget, shared by share units | 10% of charges by default; can be set higher, never lower |
| Can it cover the other’s costs? | No | No, not day-to-day running costs |
Think of the maintenance fee as the building’s living expenses and the sinking fund as its savings. When the lifts need major parts or the façade needs repainting ten years on, the sinking fund pays. A building that under-saves usually ends up asking owners for a special levy later.
Who collects and who sets the amounts depends on the building’s stage: the developer after handover, then the Joint Management Body (JMB), then the Management Corporation (MC). The full timeline is in the Strata Management Act 2013 guide.
How is the maintenance fee calculated? Share units with examples
The Act says charges are set in proportion to the allocated share units of each parcel. Share units are assigned by the developer’s licensed land surveyor under the share unit formula; broadly they track floor area, weighted for the type and position of the unit. That is why a larger unit pays more than a smaller one in the same block, and why residential and commercial components can carry different weights.
On the bill, most buildings express the result as “RM x per sq ft” (psf) or “RM x per share unit”. Both come from the same sum: the annual budget divided by the total share units, multiplied by yours.
Example 1: sharing the budget by share units (hypothetical figures)
| Item | Figure |
|---|---|
| Building’s annual maintenance budget | RM1,800,000 |
| Aggregate share units | 50,000 |
| Your parcel’s share units | 110 |
| Your annual charges | RM1,800,000 × 110 ÷ 50,000 = RM3,960 |
| Monthly charges | RM3,960 ÷ 12 = RM330 |
| Monthly sinking fund (10%) | RM330 × 10% = RM33 |
| Monthly total | RM363 |
Example 2: billing per square foot (hypothetical figures)
| Item | Figure |
|---|---|
| Unit size | 1,000 sq ft |
| Rate | RM0.35 psf |
| Monthly charges | 1,000 × RM0.35 = RM350 |
| Monthly sinking fund (10%) | RM35 |
| Monthly / annual total | RM385 / RM4,620 |
These figures only illustrate the method; they are not quotes for any building. Real charges vary widely with facilities, security level, density and the quality of management. When I view a unit with clients I always ask for the latest bill, because it is one of the value factors worth checking.
Buy a subsale unit without checking arrears and the seller’s unpaid charges become your problem. On a unit billed RM385 a month, two years of arrears is over RM9,000 plus interest, and the management office can hold back your access cards until it is cleared. The certificate costs at most RM50: have your lawyer get it and write the deduction into the SPA. See subsale due diligence.
Ask Louis directly
Send me the unit's latest maintenance bill and the last set of audited accounts, and I will tell you whether the sinking fund is healthy or you are buying into a special levy.
Tell me the building and the unit size and I will get the current charge and sinking fund rate from the management office, work out your monthly total, and ask for the latest audited accounts and the arrears position.
Who sets the maintenance fee, and when do you start paying?
- Developer's management periodThe developer sets charges by share units, with the sinking fund at 10% of charges. The developer itself pays for unsold units.
- From vacant possession (VP)Under clause 19 of the Schedule H SPA, the purchaser pays the first four months of charges and sinking fund in advance, then monthly in advance. See the after-keys checklist for everything else due at handover.
- JMB or MC stageThe JMB or MC sets charges from time to time. A general meeting can raise the sinking fund above 10% but cannot cut it below. Changes normally come to the AGM along with the budget.
If you think the fee is too high or too low, challenge the budget and audited accounts at the AGM. Paying less on your own is simply treated as arrears.
What happens if you don't pay maintenance fees in Malaysia?
The consequences escalate step by step. This is how the Act, the 2015 Regulations and law firms’ guidance set them out:
| Stage | What management can do | Basis |
|---|---|---|
| Still unpaid 14 days after notice | Charge interest: 10% a year on a daily basis in the developer’s period; in the JMB/MC period a rate set by the general meeting, capped at 10% a year | Act 757 |
| Still in arrears 7 days before an AGM | You lose your vote at that meeting | Meeting rules in the Act’s schedules |
| 14 days after written notice | Deactivate your access card or tag (reactivation fee up to RM50), suspend use of facilities such as the pool or gym, post the defaulters’ list on the notice board | Third Schedule by-laws, 2015 Regulations; law firm guidance |
| Statutory demand served (Form 11 or Form 20) | Failing to pay is an offence: fine up to RM5,000, jail up to 3 years or both, and up to RM50 a day for a continuing offence after conviction | s.34(3) (JMB) and s.78(3) (MC), Act 757 |
| Application to the COB | Warrant to attach your movable property, which can be sold if the debt is still unpaid after 14 days | s.79, Act 757 (MC) |
| Legal claim | Recover the debt at the Strata Management Tribunal (up to RM250,000) or in court | Act 757 |
What management cannot do
- Cut your water or electricity.
- Stop you getting into your own unit or car park. With the card deactivated, you can still register at the entrance.
- Deactivate your card without written notice and the 14-day wait. In Mok Siou Min v Hampshire Residences Management Corporation [2018] 1 LNS 333, the court found a deactivation unlawful because no notice had been served first.
How much interest?
Take Example 2’s RM385 a month. Six months unpaid is RM2,310. At the 10% cap for 90 days: RM2,310 × 10% × 90 ÷ 365 ≈ RM56.96. The interest is small; losing your vote, your access card and facing prosecution are what really hurt.
Will the maintenance fee go up? What if the sinking fund runs short?
Maintenance fees are not fixed for life. The JMB or MC tables a budget at each AGM, and when costs rise (security, cleaning, electricity, insurance, maintenance contracts) the charges may be adjusted. Because the sinking fund must be at least 10% of charges, it moves with them.
The harder problem is a sinking fund that can’t cover what’s coming. Buildings more than ten years old face big-ticket items such as lift overhauls, repainting the façade, replacing water pumps and fire-fighting equipment. If the balance is too thin, management usually has three options: raise the sinking fund above 10%, phase the works, or ask the general meeting to approve a special levy on owners. All of these go through the general meeting, which is why attending the AGM and reading the budget matters.
| New building (first few years) | Older building (10+ years) | |
|---|---|---|
| Who sets the fee | The developer, then the general meeting once the JMB is formed | The MC’s general meeting |
| Typical problem | The developer set charges low; the JMB finds the budget doesn’t work once it takes over | Sinking fund too small; major works need a special levy |
| What buyers should check | Accounts from the developer’s period and the balances handed to the JMB | The last three years of audited accounts and the sinking fund balance |
Buying subsale: how to check for unpaid maintenance fees
When you buy a subsale strata unit, the seller’s arrears become your problem if nobody checks: you may not get access cards after completion, and you will spend weeks arguing with the management office and the seller. The Act lets an owner, or someone acting for them, ask the developer, JMB or MC for a certificate stating the charges, the sinking fund contribution and any arrears. The fee is capped at RM50.
- Before paying the earnest deposit: ask the seller for the last three months’ maintenance bills and receipts.
- Before signing: have your lawyer obtain the arrears certificate, and write into the SPA that the seller must clear arrears before completion or that the lawyer can deduct them from the price. See subsale due diligence.
- At completion: charges, assessment and quit rent are apportioned to the completion date. See the subsale SPA and subsale transfer process.
- After you get the keys: register as the new owner at the management office and transfer access cards and parking bays.
- Ask for the latest audited accounts and budget, and look at the sinking fund balance.
How to read your building's accounts: 5 red flags
The Act requires the JMB’s or MC’s accounts to be audited every year and laid before the AGM. When I go through a set, I look at:
- Sinking fund balance. It should grow as the building ages. A balance that stays low or shrinks year after year points to a special levy later.
- Arrears ratio. The larger the arrears relative to annual charges, the tighter the cash flow, and the more repairs get postponed.
- Sinking fund used for running costs. Paying cleaners or guards from the sinking fund breaks the rules.
- Insurance. The JMB or MC must insure the whole building, with premiums paid from the maintenance account. Check the policy is current.
- The audit opinion. A qualified opinion or disclaimer from the auditor deserves close questions.
If something looks wrong, raise it at the AGM or complain to the Commissioner of Buildings (COB) at your local council, which has the power to inspect accounts.
Related questions
What is a reasonable maintenance fee per square foot in Malaysia?
There is no statutory rate and no published benchmark, because the fee is simply the building’s budget divided by the aggregate share units. Facilities, security level, density and the quality of management drive it, so two neighbouring blocks can differ widely. Judge it against the accounts, not against a rule of thumb: ask for the latest bill, the current budget and the last three years of audited accounts, and look at whether the sinking fund balance is growing.
Can a condo charge different maintenance rates for different unit types?
The courts have pulled in different directions. The Edge reported in January 2026 that the Federal Court in November 2025 dismissed an application by the MC of Phileo Damansara 1 to impose different maintenance rates, while the High Court allowed the JMB of Icon City in Petaling Jaya, a mixed-use development, to charge differently based on exclusive use of identified common property. If you are buying into a residential-plus-commercial project, ask in writing exactly how your component’s charges are worked out.
What is a special levy and can owners refuse to pay it?
A special levy is a one-off contribution approved at a general meeting when the sinking fund cannot cover major works, typically a lift overhaul, repainting the facade or replacing water pumps in a building over ten years old. Once it is properly passed you cannot opt out; refusing simply puts you in arrears, with interest and the loss of your vote. The time to influence it is at the meeting, which is why the sinking fund balance matters before you buy.
Do I still pay maintenance fees if my unit is empty?
Yes. Charges attach to the parcel in proportion to its allocated share units, not to whether anyone lives there, so an empty or unrented unit is billed the same as an occupied one. Even the developer pays charges and sinking fund on units it has not sold. Owners who let remotely are the ones most likely to drift into arrears, usually through a failed standing instruction, so check the statements rather than assuming the transfer went through.
Frequently asked questions
How is condo maintenance fee calculated in Malaysia?
The building’s maintenance budget is shared in proportion to each parcel’s allocated share units. Many buildings convert the result into a per-square-foot rate. For example, a RM1.8 million budget across 50,000 share units means a 110-unit parcel pays RM3,960 a year, or RM330 a month, plus RM33 sinking fund.
Is the sinking fund always 10% in Malaysia?
By default it equals 10% of the maintenance charges. A JMB or MC can resolve at a general meeting to set it higher, but not below 10%. The money may only be used for capital items such as repainting common property, buying or replacing equipment and refurbishment, not for daily running costs.
Can management cut my water or electricity for unpaid maintenance fees?
No. Management cannot cut utilities or stop you entering your own unit. Fourteen days after written notice, though, it can deactivate your access card (reactivation fee up to RM50), suspend facilities, charge interest and pursue you through a statutory demand, a COB attachment warrant, the tribunal or the courts.
Can I go to jail for not paying maintenance fees?
Potentially. Failing to pay after a statutory demand notice is an offence under Act 757, punishable by a fine of up to RM5,000, jail of up to three years or both, plus up to RM50 a day for a continuing offence after conviction. In practice most cases settle or move to instalments first.
How do I check if a subsale unit has maintenance arrears?
Your lawyer should apply to the JMB or MC for a certificate of charges and arrears; the Act caps the fee at RM50. The SPA should require the seller to clear any arrears before completion, or let the lawyer deduct them from the purchase price so you start with a clean account.
How many months of maintenance fees are paid at key collection?
Under the Schedule H strata SPA, the purchaser pays the first four months of charges and sinking fund in advance from the date of vacant possession, then monthly in advance. During the developer’s management period this money must sit in dedicated accounts held in trust for purchasers.
Can I refuse to pay if the maintenance fee is too high?
No. Withholding payment simply puts you in arrears, with interest and loss of your AGM vote. The right route is to question the budget and audited accounts at the AGM, table a motion with other owners, or complain to the Commissioner of Buildings if you suspect the accounts are wrong.
Sources & verification
- Strata Management Act 2013 (Act 757), full text
- Low and Partners — Strata Management Act 2013, Part 1
- Low and Partners — Strata Management Act 2013, Part 3
- Mah Weng Kwai and Associates — How management bodies can recover outstanding maintenance charges
- BurgieLaw — Can a JMB/MC deactivate access cards? (Mok Siou Min)
- Lui and Bhullar — Can the JMB block access for outstanding fees?
- Schedule H SPA (REHDA copy)
- The Edge Malaysia (20 Jan 2026) — A long overdue revamp of the SMA
- EdgeProp — The ABCs of AGM, EGM and committee meetings
Verified: 2026-09-20. This guide is general information, not legal, tax or financial advice. Rules and rates change — confirm in writing with your lawyer, bank or the relevant authority before you sign.
More in this stage
Louis Koh
11 years in Malaysian property · Johor Bahru & Kuala Lumpur · English & 中文
I help local buyers and cross-border buyers from Singapore with new and subsale property. Every figure in these guides is sourced; when a rule changes, I update the page and date it.
Stuck on this step? Ask me directly
Send me your situation — new or subsale, budget, state, and where you are in the process — and I will tell you what to do next and what to watch for.
Tell me the building and the unit size and I will get the current charge and sinking fund rate from the management office, work out your monthly total, and ask for the latest audited accounts and the arrears position.
Louis Koh · 11 years in Malaysian property · +60 10-906 6685 · replies 9am–10pm MYT