Dispute Resolution Update: One Development, Different Maintenance Rates? The Court of Appeal Clarifies a Management Corporation’s Powers

In Ho Phoy Kwang & Anor v The Summit Subang USJ Management Corporation & Ors1, the Court of Appeal considered whether a management corporation (“MC”) may impose different maintenance and sinking fund rates within the same mixed development.

The Appellants contended that the Strata Management Act 2013 (“SMA”) required a uniform rate based on share units. The Court rejected that interpretation. It held that section 60(3)(b) of the SMA2 permits an MC to determine different rates where parcels are used for significantly different purposes, while the words “in proportion to the share units” does not require one uniform rate throughout the development.
 
Crucially, the Court’s reasoning went beyond the labels attached to the parcels. It examined the extent to which different components actually used and benefited from different facilities, and the expenditure attributable to those facilities.

The evidence showed, among others, that certain components maintained their own facilities at their own expense, while some facilities served only particular components. The Court considered it inequitable for proprietors to bear costs relating to facilities from which they derived no corresponding benefit.
 
The Court also distinguished Muhamad Nazri bin Muhamad v JMB Rajawali & Anor3, which concerned a joint management body rather than an MC, and relied on the wider statutory powers conferred upon an MC.
 
The decision therefore indicates that in assessing differential rates, the Court may look beyond parcel classification to the actual use, benefit and cost of common facilities, provided the resulting rates are properly justified and just and reasonable.
 
Footnotes:

  1. Civil Appeal No.: B-02(NCvC)(A)-1344-08/2024, Grounds of Judgment dated 26 June 2026.
  2. Section 60(3)(b) of the SMA, Act 757.
  3. [2020] 3 MLJ 645.

 
This update is prepared by Muhammad Iqram Firdaus bin Sharif.

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THIS UPDATE IS ISSUED FOR THE INFORMATION OF THE CLIENTS OF THE FIRM AND COVERS LEGAL ISSUES IN A GENERAL WAY. 
THE CONTENTS ARE NOT INTENDED TO CONSTITUTE ANY ADVICE ON ANY SPECIFIC MATTER AND SHOULD NOT BE RELIED UPON AS A SUBSTITUTE FOR DETAILED LEGAL ADVICE ON SPECIFIC MATTERS OR TRANSACTIONS.
 

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