What to Do When Developers Don’t Pay Maintenance Fees for Unsold Units in Strata Projects

BY MESSRS LUI BHULLAR

What to Do When Developers Don’t Pay Maintenance Fees for Unsold Units in Strata Projects

When it comes to strata living in Malaysia, the Strata Management Act 2013 (SMA 2013) clearly spells out the obligations of developers, Joint Management Bodies (JMBs), and Management Corporations (MCs). However, one of the most persistent issues faced by JMBs and MCs is developers who fail to pay maintenance charges and sinking fund contributions for unsold units.

This article discusses your legal options, the implications of such defaults, and how a qualified strata management lawyer in Malaysia can help resolve these disputes.

🔍 Understanding the Developer’s Obligation Under Strata Law

According to Section 12 of the SMA 2013, the developer is legally bound to pay maintenance charges and contribute to the sinking fund for all unsold units starting from the date of vacant possession until the JMB or MC takes over.

This obligation exists regardless of whether a buyer has been found or not. It is not optional, nor can it be waived unless explicitly provided for in law or mutual agreement.

⚠️ Common Issues Faced by JMBs and MCs

In practice, many developers delay or outright fail to pay these charges. Common scenarios include:

• Promises of “Free Maintenance” for the first year, which are not properly documented or accounted for.

• Failure to transfer collected sinking funds when the JMB is formed.

• Developers ignoring demands for arrears in maintenance for their unsold units.

• Disputes over unaudited or delayed account statements.

These issues lead to financial shortfalls, affecting the ability of the JMB or MC to manage the building, pay service providers, and conduct necessary repairs.

👩‍⚖️ Legal Remedies Available

1. Send a Formal Letter of Demand

A strata lawyer in Malaysia can assist in issuing a formal letter of demand to the developer. This is often the first step in resolving the issue amicably.

2. Bring a Case to the Tribunal for Strata Management (TPSM)

Under the SMA 2013, the Tribunal for Strata Management Malaysia can hear disputes involving maintenance charges and sinking fund contributions. The process is quicker and more cost-effective than court proceedings.

✅ Claims up to RM250,000 can be heard by the Tribunal.

3. Civil Suit for Recovery of Arrears

For larger claims or unresolved cases, the JMB/MC can file a civil suit to compel the developer to pay up. This route should be considered when Tribunal orders are not complied with.

🏢 JMB vs MC Legal Issues: Who Should Act?

Whether you’re a Joint Management Body (JMB) or a Management Corporation (MC), your legal standing to recover maintenance charges is protected under the law. The timing of the handover (from developer to JMB or MC) is crucial, and legal advice is necessary to determine liability periods.

A law firm specialising in JMB legal advice in Malaysia can assist in:

• Auditing and verifying accounts

• Establishing a paper trail of defaults

• Initiating legal proceedings

• Advising on limitation periods and enforcement

🧾 Key Documents You’ll Need

To pursue a legal claim against the developer, gather the following:

• Signed Sale & Purchase Agreements (SPAs)

• Maintenance fee and sinking fund statements

• Proof of vacant possession date

• Audited accounts (if available)

• Any correspondences with the developer

👨‍💼 How a Strata Law Firm in Malaysia Can Help

Working with a specialist strata property dispute lawyer ensures your case is handled professionally and strategically. Whether you are recovering unpaid fees, disputing misleading “free maintenance” promises, or ensuring proper handover of funds, a strata management lawyer in Malaysia can guide you every step of the way.

✅ Conclusion

Developers are not exempt from paying maintenance charges for unsold units—and JMBs or MCs have full rights to enforce this. If your management body is facing such an issue, don’t delay. Engage a qualified MC dispute resolution lawyer or strata management lawyer in Malaysia to secure your property’s financial health and enforce compliance.

Need Help With Developer Arrears?

Contact us for legal advice for JMB and MC on unpaid maintenance charges, sinking fund disputes, and strata tribunal claims. Our team of experienced strata lawyers in Malaysia is ready to assist. 👉 Get a free consultation with our experienced team and take legal action with confidence.

📞 Contact Messrs Lui & Bhullar today for a Free consultation.

• 📧 Email: general@luibhullar.com

• 📞 WhatsApp: +60143000970 / +60143000960