Maintenance Charges and the Defaulting Owner (Part 1): What a JMB or MC Can and Cannot Do
by Muhammad Faiz bin Hasan
Anyone who has lived in a condominium or a gated strata scheme knows the monthly maintenance charge. It pays for the security guards, the lifts, the swimming pool, the cleaning of the common corridors, and the sinking fund that one day fixes the roof. The whole thing only works if everyone chips in. The trouble starts when someone does not.
A management body that is owed money naturally wants to lean on the owner who refuses to pay, and the temptation is to grab the bluntest tool within reach: switch off his water, block his car at the gate, cut his electricity. This article sets out who the law treats as a “defaulter,” what a Joint Management Body (JMB) or Management Corporation (MC) is allowed to do, and just as importantly, the lines a management body crosses at its own peril.
Who is a “defaulter” in the eyes of the law?
The starting point is the Third Schedule to the Strata Management (Maintenance and Management) Regulations 2015, and by-law 6. Put simply, a proprietor becomes a defaulter when he fails to pay his charges, his sinking fund contribution, or any other money lawfully due to the management body, and that failure carries on past fourteen days after he receives a notice from the management body.
That fourteen-day period is not just a by-law courtesy. It is anchored in the Act itself. Section 34(1) of the Strata Management Act 2013 (in the JMB context) lets the management body serve a written notice demanding payment within a period that “shall not be less than fourteen days from the date of service of the notice.” Until that notice is served and the fourteen days have passed, the owner is simply in arrears. It is the expiry of the notice that turns him into a “defaulter” against whom the by-law remedies can be used.
It is also worth seeing how wide the net is cast. The restrictions the law permits do not fall on the registered owner alone. By-law 6(1)(b) provides that any restriction or action against a defaulter extends to his family, and to any chargee, assignee, successor-in-title, lessee, tenant or occupier of his parcel. In practice this means the consequences of unpaid charges stick to the parcel itself, so a tenant or a buyer can end up caught by arrears he never personally ran up.
What may a JMB or MC lawfully do?
The most important thing to understand is that the safest and most powerful remedy is also the dullest one: the charges are, by law, a debt owed to the management body, and they can be sued for and recovered as a debt, with interest. Under section 25 of the Act, every purchaser must pay his charges and sinking fund contribution to the JMB, and the by-laws back this up. By-law 6(2) provides that, from the moment the fourteen-day period expires, the defaulter must pay interest at ten per cent per annum daily, or at whatever rate the management body fixes at a general meeting, until the sum is actually paid. Everything else comes second to this right to recover the debt.
Beyond suing for the debt, the management body has a measured set of pressure points, all flowing from by-laws 6 and 7. Under by-law 6(3) it may prepare and display a defaulters’ list, showing the names, the parcels and the unpaid sums, on the notice boards in the building, so long as the list is updated at the end of every following calendar month. Under by-law 6(4), once the fourteen-day period has expired, it may, without prior notice, deactivate any electromagnetic access device such as a card, tag or transponder issued to the defaulter, and it may charge a reactivation fee not exceeding fifty ringgits once the arrears are cleared. But — and this matters a great deal — the same by-law preserves the owner’s ability to get into his own home: during the deactivation period the management body may simply require the defaulter to sign a defaulter’s register book each time he needs help to enter or leave the building.
Under by-law 6(5) it may suspend the defaulter from using the common facilities and common services, and this expressly extends to any car park bay in the common property set aside for his use. Under by-law 6(6) it may, if it chooses, enter a written instalment payment scheme to let the owner settle his arrears, and may hold off on the access card and facilities measures while that scheme runs. And under by-law 7 it may, by resolution at a general meeting, impose a fine of an amount fixed by that meeting on anyone in breach of the by-laws; by-law 7(2) makes such fine a debt due to the management body.
Where is the line? The cautionary tale of the Crescent Court dispute
This is where many management bodies trip up, and there is a well-known case every committee member ought to know. It is John Denis De Silva v Crescent Court Management Corporation [2006] 2 CLJ 605, a decision of the High Court in Kuala Lumpur. It involved an elderly gentleman who owned and lived in a condominium unit and parked his car in the bay allotted to him. The management corporation, unhappy about money it said he owed, took matters into its own hands. It stopped him from driving into the compound and interfered with the water supply over unpaid charges. He went to court, and the court came down firmly on his side.
The judge held that the management corporation simply had no power to take the law into its own hands like this. Stopping an owner from entering his own property and meddling with the water supply because charges were owed went beyond anything the law allowed. In the language of the judgment, it was ultra vires the relevant provisions of the strata legislation then in force. The owner held an indefeasible title to his unit and an unrestricted right to come and go from it, and if money was owed, the proper course was to sue for it as a debt, not to lay siege to his home.
That decision has cast a long shadow, and its logic carries over intact under the present law, because nothing in the Strata Management Act 2013, and nothing in the by-laws, gives a management body any power of self-help disconnection. It is said that while the by-laws carefully spell out what a management body may do to a defaulter (deactivate a card, publish a list, suspend facilities, charge interest, fine him) they say nothing at all about cutting essential supplies or barring entry, because no such power exists.
The practical lesson is simple and bears repeating. A JMB or MC may not cut off a defaulter’s electricity. It may not cut off his water. And it may not physically stop him from entering his main parcel or his accessory parcel, such as his car park bay. Deactivating a convenience card, provided entry through the guardhouse register is preserved, is one thing; barricading a man out of his home is quite another, and a management body that does the latter is likely to find itself facing an injunction and an order for damages.
The remedies that have teeth
None of this leaves a management body powerless, far from it. The law gives it real and lawful weapons; they are just not the dramatic ones. The main remedy is to recover the arrears as a debt, together with the interest the law allows, either before the Strata Management Tribunal or in the ordinary courts.
Alongside that, the Act provides a genuinely powerful piece of machinery: under section 35 (at the JMB stage) and section 79 (at the MC stage), the Commissioner of Buildings may, on a sworn written application by a member of the management committee, issue a warrant of attachment in Form A of the Third Schedule to the Act, authorising the seizure of the defaulter’s movable property, whether in the building or elsewhere in the State, so that it can be sold to satisfy what is owed. Used properly, these are far more effective than any gate barrier, because they end not in a stand-off at the guardhouse but in the lawful seizure of assets.
Conclusion
The law strikes a deliberate balance. It recognises that unpaid charges eat away at communal living and gives the management body genuine means to recover them: naming defaulters, suspending facilities, disabling access cards, charging interest, fining, applying for a warrant of attachment, and ultimately suing for the debt. But it draws a hard line at self-help measures that strike at the owner’s fundamental rights in his own property. Cutting water or electricity, or locking an owner out, is not enforcement; it is wrong, as the Crescent Court dispute shows. The wise committee treats the notice of demand, the statutory warrant of attachment, and the debt action as its real tools, and leaves the water and the locks well alone. How those debts are worked out, and how an award or judgment is enforced once obtained, is the subject of Part 2.
