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Summary : The case of Muhamad Nazri Muhamad v JMB Menara Rajawali & Anor [2019] 10 CLJ 547, Court of Appeal

JMB’s imposition of different rates of maintenance charges for different types of parcels comprised in a mixed development project.

This case decides that a joint management body (JMB) formed pursuant to the Strata Management Act 2013 (“SMA”) has no power to fix and impose different rates of maintenance charges for different types of parcels comprised in a mixed development project.

The reason is that the share units allocated to a parcel is calculated according to formula set out in the First Schedule of SMA which takes into consideration of different weightage factors. The legislative framework under the First Schedule of SMA is intended to avoid inequitable, unfair and discriminatory practice in determining maintenance and maintenance charges rate. Hence, a JMB shall fix one rate of management charges which is applicable to all types of parcels in proportion to the allocated share units.

Commentary:-

  • This case is to be viewed with caution in the Sabah’s context as the SMA is not applicable in the State of Sabah.
  • The relevant law governing management of subsidiary titled development in Sabah is the Land (Subsidiary) Title Enactment (Sabah No. 9 of 1972). Under this Enactment, the allocation of share units are allocated by the landowner, as approved by the Director of Lands and Surveys – unlike the share unit computation in Peninsular Malaysia which is based on a set of formula set in stone under the SMA.
  • It would also be interesting to note that in Sabah, it is not mandatory to compute the management charges based on share units.
  • It has yet to be seen on any court’s interpretation in light of the provisions of the Enactment  in terms of the relationship between the allocated share units and different rates of management charges. Although the share units are assigned by the landowner in Sabah’s context, it is a prudent approach to adopt an equitable, fair and non-discriminatory practice in determining maintenance or management charges rate.

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