For many strata property owners, maintenance charges are a recurring source of confusion and frustration. Questions often arise when owners in the same development are charged different amounts, especially in mixed-use projects where residential, office and retail components coexist. A recent High Court decision involving Icon City has provided important clarity on this issue, particularly on what a Joint Management Body, commonly known as a JMB, is legally allowed to do.
What is a JMB and why it matters
A Joint Management Body (JMB) is a management entity formed under Malaysia’s Strata Management Act once strata units are sold but before individual strata titles are issued. In simple terms, it is the body responsible for managing and maintaining common areas in a strata development during this interim period.
The JMB typically consists of representatives from the developer and parcel owners. Its responsibilities include collecting maintenance charges, managing sinking funds, maintaining common facilities and enforcing by-laws. For most owners, the JMB is the entity they interact with most frequently when it comes to day-to-day management issues.
Because the JMB controls maintenance charges, disputes often arise over how those charges are calculated and whether they are applied fairly.
The dispute at Icon City
In the Icon City case, a group of 216 parcel owners challenged resolutions passed by the JMB that imposed different maintenance charges and sinking fund contributions on different components within the development. The plaintiffs argued that the Strata Management Act 2013, also known as Act 757, requires a uniform rate to be applied to all parcels.
The defendants, which included the JMB and related parties, took a different view. They argued that Icon City is a mixed development with multiple components, each enjoying different facilities. As such, imposing a single flat rate would be unfair, as some owners would end up paying for facilities they do not have access to.
How the court approached the issue
The High Court adopted a broad and practical approach. Rather than focusing on a single provision of the law, the judge examined the Strata Management Act alongside sale and purchase agreements, deeds of mutual covenants, additional by-laws and the actual layout of the development.
The court concluded that the JMB was entitled to impose different maintenance charges based on the concept of exclusive use and enjoyment of certain common properties. In other words, where specific facilities are reserved for specific parcels, it is lawful and reasonable for only those parcel owners to bear the associated costs.
Understanding common property versus limited common property
To understand the ruling, it helps to distinguish between two key concepts in strata law.
Common property refers to areas shared by all parcel owners, such as main access roads, lifts serving all floors or general security systems.
Limited common property, on the other hand, refers to facilities reserved for use by specific parcels or components. At Icon City, residential towers enjoy facilities such as swimming pools, gyms, roof gardens and barbecue areas. Office towers have access to business centres, executive lounges and meeting facilities. Other components, such as shop lots or certain business suites, do not have access to these amenities.
The court found it would be inequitable to require owners without access to these facilities to contribute toward their upkeep.
Why earlier cases did not apply
The plaintiffs relied on an earlier case that suggested maintenance charges must be uniform. However, the court explained that such cases were fact-specific and materially different.
In the Icon City case, the JMB had passed additional by-laws at its first annual general meeting granting exclusive use of certain common property to designated parcels. These by-laws did not exist in the earlier case relied upon by the plaintiffs.
The court stressed that legal conclusions must be applied within their specific factual and contractual context, not treated as blanket rules.
Contracts matter more than many owners realise
A key point highlighted by the court was the importance of sale and purchase agreements and deeds of mutual covenants. These documents explicitly stated that purchasers would pay a fair and justifiable proportion of maintenance and management costs based on the facilities and services provided.
By signing these documents, the owners had agreed to the concept of differentiated charges. The court described it as unconscionable for owners to later argue that others should subsidise facilities they exclusively enjoy.
For buyers, this reinforces an important lesson. Maintenance obligations are not decided arbitrarily. They are rooted in contractual documents that should be carefully reviewed before purchase.
What this means for everyday owners
For ordinary strata owners, the ruling helps clarify expectations. Different maintenance charges in mixed developments are not automatically unlawful. Where differences are tied to actual usage and access to facilities, they may be legally justified.
This also explains why maintenance fees can vary significantly within the same project. Lower fees often come with fewer amenities, while higher fees reflect broader access and lifestyle facilities.
Implications for investors
From an investment standpoint, the ruling reduces uncertainty. Investors can now better assess operating costs based on the specific component they are buying into. Residential units with lifestyle amenities may carry higher fees but potentially attract stronger rental demand. Commercial parcels may enjoy lower charges but offer fewer facilities.
Understanding this trade-off is critical for realistic yield calculations and long-term holding strategies.
A clearer framework for JMBs
For JMBs and developers, the decision offers guidance on structuring maintenance frameworks. Charges must be transparent, supported by proper by-laws and aligned with statutory requirements. Arbitrary or poorly documented fee structures are still open to challenge.
The ruling does not give JMBs unlimited discretion. It reinforces that fairness must be grounded in actual use, access and agreed contractual terms.
Looking ahead
As mixed-use developments become increasingly common in urban areas, disputes over maintenance charges are likely to continue. This decision provides a clearer framework for resolving such disputes by focusing on proportionality rather than uniformity.
For buyers, owners and investors alike, the message is straightforward. Understanding what a JMB does, how facilities are allocated and what the contractual documents say is essential. In strata living, fairness is not about everyone paying the same amount, but about everyone paying for what they actually use and benefit from.
