Guide · Strata living
Maintenance fee vs sinking fund: what the law says
In a Malaysian condo or strata landed scheme, the maintenance fee (called Charges in the Strata Management Act 2013) pays for day-to-day running costs, while the sinking fund saves for larger works such as repainting and replacing fixtures. The sinking fund contribution must be at least 10% of the Charges. Both are collected by the developer, then the JMB, then the MC, and each goes into its own account.
The difference at a glance
| Maintenance fee (Charges) | Sinking fund | |
|---|---|---|
| What it pays for | Day-to-day upkeep of the common property: cleaning, security, insurance premiums, minor repairs and painting, rates, audit fees and managing agent fees (section 23 for a JMB). | Larger, less frequent costs: painting or repainting the common property, buying movable property, renewing or replacing fixtures and fittings, upgrading and other capital spending (section 24 for a JMB). |
| How much | Set in proportion to each parcel's share units: by the developer at first (section 12), then by the JMB (section 25) or at the MC's general meeting (section 60). | 10% of the Charges, or more if a general meeting decides, never less (sections 12, 25 and 61). |
| Where it goes | The maintenance account. | A separate sinking fund account. |
| When to pay | Within 14 days of the notice. | Within 14 days of the notice, together with the Charges. |
| If paid late | Interest of up to 10% a year, and recovery under the Act. | The same as the Charges. |
Example: if your Charges are RM300 a month, the sinking fund is at least RM30 a month, so the minimum bill is RM330.
Who collects, and when
- The developer, from vacant possession until a JMB is formed. Purchasers pay the Charges and the sinking fund to the developer, and the developer pays both for unsold parcels (section 12). The developer opens a maintenance account for the development area and holds the money in trust for purchasers (section 10).
- The joint management body (JMB), established when its first annual general meeting is convened, which must happen within 12 months of vacant possession (section 17). Its members are the developer and the purchasers. The JMB sets and collects the Charges and the sinking fund (section 25).
- The management corporation (MC), which comes into existence under the Strata Titles Act 1985 once strata titles are issued. The developer must convene the MC's first annual general meeting (section 57). The JMB dissolves three months after that meeting and hands over its money to the MC (section 27), and the MC then sets and collects both (sections 60 and 61).
Our guide to JMB vs MC explains the handover in more detail.
Is there service tax on maintenance fees?
Not from 1 July 2026. Under Service Tax Policy 3/2026, dated 24 June 2026, maintenance charges and sinking fund contributions that a JMB or MC charges to owners are not subject to service tax, for residential and non-residential buildings. It is a ministerial exemption awaiting gazettement, and it does not apply to periods before 1 July 2026. The JMB or MC still pays service tax on taxable services it buys from contractors, even when those are paid from the maintenance account or the sinking fund.
What happens if an owner does not pay
An owner must pay within 14 days of the notice. After that, the JMB or MC can charge interest of up to 10% a year on the unpaid sum (section 25 for a JMB, section 60 for an MC) and recover the debt using the steps in the Act (section 34 for a JMB, section 78 for an MC).
Where to raise a complaint
Each local authority area has a Commissioner of Buildings (COB), appointed by the State Authority (section 4). A purchaser who thinks a developer's Charges are wrong can apply to the Commissioner (section 12). In Kuala Lumpur, DBKL publishes a procedure for the Commissioner to re-examine the accounts of a developer, JMB or MC.
The Act is looked after by the Ministry of Housing and Local Government (KPKT) through the National Housing Department. In June 2026 the Malaysian Anti-Corruption Commission put six proposals to the department to tighten oversight of strata money, including wider investigation powers for the COB and regular e-reporting of accounts (Berita RTM, 19 June 2026). They are proposals, not law.
Keeping the two accounts straight
Most disputes about money in a strata scheme come back to records: who was billed what, who paid, and which account the payment went into. Whatever software a committee uses, each bill and receipt should show the Charges and the sinking fund separately, and the books should be kept and audited by the JMB or MC's own accountant and auditor.
Rumika by DaulatLabs, which is in development, is planned to send these bills and reminders and keep the two amounts apart, while the committee's accountant keeps the books. Read more on the Rumika page.
Questions
What is the difference between a maintenance fee and a sinking fund?
The maintenance fee (Charges) pays for day-to-day running costs such as cleaning, security and insurance. The sinking fund saves for larger works such as repainting and replacing fixtures. They are paid into separate accounts.
How much is the sinking fund in Malaysia?
At least 10% of the Charges, under sections 12, 25 and 61 of the Strata Management Act 2013. A general meeting can set a higher rate, but not a lower one.
Can the sinking fund be used for normal maintenance?
No. For a JMB, section 24 limits the sinking fund to items such as repainting the common property, buying movable property, renewing or replacing fixtures and fittings, and other capital spending. Day-to-day costs come from the maintenance account under section 23.
Who sets the maintenance fee?
The developer sets it at first, in proportion to each parcel's share units. After that the JMB sets it, and once the MC is formed it is set at the MC's general meeting.
Is service tax charged on maintenance fees?
From 1 July 2026, maintenance charges and sinking fund contributions charged by a JMB or MC to owners are not subject to service tax, under Service Tax Policy 3/2026.
What is the interest on late maintenance fees?
Up to 10% a year on the unpaid sum, once the 14 days after the notice have passed.
Sources
Every fact on this page comes from one of these sources. Dates are when the source was published, or when we read a live page.
- Act 757 section 23: JMB maintenance account and its permitted uses (read 19 Oct 2026)
- Act 757 section 24: JMB sinking fund account and its permitted uses (read 19 Oct 2026)
- Act 757 section 25: parcel owners to pay Charges and sinking fund contribution (read 19 Oct 2026)
- Act 757 section 61: sinking fund account of the management corporation (read 19 Oct 2026)
- Act 757 section 60: maintenance account of the management corporation (read 19 Oct 2026)
- Act 757 section 12: purchaser and developer to pay Charges and sinking fund contribution (read 19 Oct 2026)
- Act 757 section 10: developer to establish maintenance account (read 19 Oct 2026)
- Act 757 section 17: establishment of the joint management body (read 19 Oct 2026)
- Act 757 section 27: dissolution of the joint management body (read 19 Oct 2026)
- Act 757 section 57: developer to convene the first AGM of the management corporation (read 19 Oct 2026)
- Act 757 section 4: Commissioner of Buildings (read 19 Oct 2026)
- KPMG Malaysia on Service Tax Policy 3/2026 (maintenance charges and sinking fund) (policy dated 24 Jun 2026, effective 1 Jul 2026)
- DBKL: SOP for account re-investigation by the Commissioner of Buildings Kuala Lumpur under Act 757 (the procedure in force, read 19 Oct 2026)
- Berita RTM: SPRM puts six proposals on strata financial governance to the National Housing Department (KPKT) (19 Jun 2026)