On 20 May 2025, the Court of Appeal in the case of Yong Kein Sin & Anor v Perbadanan Pengurusan Springtide Residences and other appeals [2025] MLJU 1469; [2025] CLJU 1141 ruled that the management corporation of a development which consists solely of parcels used for residential purposes cannot impose different rates of maintenance charges on the parcel owners, notwithstanding the fact that certain parcel owners have limited use of the common property which can be enjoyed by other parcel owners. Section 60(3)(b) of the Strata Management Act 2013 only allows management corporations to impose different rates provided that the “parcels” themselves are used for “significantly different purposes”, and this does not include “common property”.
Background Facts
The residential development known as “Springtide Residences” (“Development”) consists of 2 tower blocks with 74 parcels of apartments (“Apartments”) and 3 landed residential four-storey bungalows (“Villas”).
The management corporation of the Development (“MC”) imposed different rates of maintenance charges for the Apartments (RM3.567 per share unit) and the Villas (RM1.861 per share unit).
The MC explained that different rates were imposed as: –
• The proprietors of the Villas have limited use of the common property within the 2 tower blocks of the Apartments which includes, among others, a swimming pool, function hall, gym room, playground, car parks, lifts, toilets and security surveillance.
• The proprietors of the Villas have to maintain their own facilities within their own Villas, which include a swimming pool, private lift, garden and garage.
• The MC only maintained the outer walls and roofs of the Villas.
The co-proprietors of one of the Apartment units filed an originating summons in the High Court to, among others, seek for a declaration that the different rates of maintenance charges imposed by the MC are ultra vires the Strata Management Act 2013 (“SMA”) and Strata Management (Maintenance and Management) Regulations 2015 (“SMR”); and an order that the MC shall impose on the proprietors of the Villas the same rate of maintenance charges imposed on the proprietors of the Apartments.
The High Court dismissed the originating summons and the co-proprietors of the Apartment unit filed an appeal in the Court of Appeal.
Decision of the Court of Appeal
Pursuant to Section 60(3)(b) of the SMA, a management corporation can only lawfully impose different rates in respect of parcels which are “used for significantly different purposes”: –
“(b) raise the amounts so determined by imposing Charges on the proprietors in proportion to the share units or provisional share units of their respective parcels or provisional blocks, and the management corporation may determine different rates of Charges to be paid in respect of parcels which are used for significantly different purposes and in respect of the provisional blocks;”
The Court of Appeal in the case ofAikbee Timbers Sdn Bhd & Anor v Yii Sing Chiu & Anor and another appeal [2024] 1 MLJ 948 (Read more about this case in our article) previously held that a developer and/or management corporation was empowered by the SMA to impose different chargeable rates for the maintenance charges for parcels used for significantly different purposes in a mixed development, which comprised of residential and commercial parcels within a subdivided building in a single development.
However, the Court of Appeal distinguished the facts of this case from the Court of Appeal case of Aikbee Timbers, as the development area in Aikbee Timbers is a mixed development project which consists of parcels used for residential purposes and commercial purposes (mall and car park). The Development in this case consists solely of parcels used for residential purposes only (both the Apartments and Villas).
The Court of Appeal followed the decision in the following Court of Appeal cases: –
• Muhamad Nazri bin Muhamad v JMB Menara Rajawali & Anor [2020] 3 MLJ 645 “[1] Can a [JMB] impose different rates of maintenance charges for different types of parcels in a condominium development? That was the issue which presented itself at the High Court concerning the imposition of maintenance charges in a mixed condominium development comprising of residential, retail shop and car park parcels.
[38] There is also no provision under the [SMA] and the [STA] which empowers the JMB to fix different rates for different types of parcels. In contrast, such a power is expressly conferred on a MC in respect of two specific situations: (i) parcels which are used for significantly different purposes, and (ii) provisional blocks; sub-s 60(3)(b) [SMA].”
“[45] We agree with the submission of counsel for the [MC] that the practice of charging different rates of service charges to take into account the specific amount of usage of different elements of common property for example, lifts and swimming pools does not accord with the legislative intent of the [SMA] which requires the [MC] to impose a single rate of service charges on all parcels according to their share units, unless those parcels are used for ‘substantially different purposes’ according to s 60 [SMA]”
The Court of Appeal explained that Section 60(3)(b) of the SMA only allows the imposition of the different rates provided that the “parcels” are used for “significantly different purposes”. The term “parcel” is defined in Section 2 of the SMA and does not include “common property”.
The parcels in the Development, be they the Apartments or Villas, have the same use, namely, for residential purposes. Therefore, the Apartments and Villas in this case cannot be deemed to be used for “significantly different purposes”, in order to justify the different rates imposed by the MC under Section 60(3)(b) of the SMA.
Based on the reasons above, the Court of Appeal held that the different rates of maintenance charges imposed by the MC on the proprietors of the Apartments and Villas in the Development, are unlawful for being ultra vires Section 60(3)(b) of the SMA.
The Court of Appeal also granted a perpetual injunction to compel the MC to impose on the proprietors of the Villas the same rate of maintenance charges imposed on the proprietors of the Apartments.
This matter is pending an appeal in the Federal Court.
MC Cannot Impose Different Rates of Maintenance Charges for Residential Development
Introduction
On 20 May 2025, the Court of Appeal in the case of Yong Kein Sin & Anor v Perbadanan Pengurusan Springtide Residences and other appeals [2025] MLJU 1469; [2025] CLJU 1141 ruled that the management corporation of a development which consists solely of parcels used for residential purposes cannot impose different rates of maintenance charges on the parcel owners, notwithstanding the fact that certain parcel owners have limited use of the common property which can be enjoyed by other parcel owners. Section 60(3)(b) of the Strata Management Act 2013 only allows management corporations to impose different rates provided that the “parcels” themselves are used for “significantly different purposes”, and this does not include “common property”.
Background Facts
The residential development known as “Springtide Residences” (“Development”) consists of 2 tower blocks with 74 parcels of apartments (“Apartments”) and 3 landed residential four-storey bungalows (“Villas”).
The management corporation of the Development (“MC”) imposed different rates of maintenance charges for the Apartments (RM3.567 per share unit) and the Villas (RM1.861 per share unit).
The MC explained that different rates were imposed as: –
The co-proprietors of one of the Apartment units filed an originating summons in the High Court to, among others, seek for a declaration that the different rates of maintenance charges imposed by the MC are ultra vires the Strata Management Act 2013 (“SMA”) and Strata Management (Maintenance and Management) Regulations 2015 (“SMR”); and an order that the MC shall impose on the proprietors of the Villas the same rate of maintenance charges imposed on the proprietors of the Apartments.
The High Court dismissed the originating summons and the co-proprietors of the Apartment unit filed an appeal in the Court of Appeal.
Decision of the Court of Appeal
Pursuant to Section 60(3)(b) of the SMA, a management corporation can only lawfully impose different rates in respect of parcels which are “used for significantly different purposes”: –
“(b) raise the amounts so determined by imposing Charges on the proprietors in proportion to the share units or provisional share units of their respective parcels or provisional blocks, and the management corporation may determine different rates of Charges to be paid in respect of parcels which are used for significantly different purposes and in respect of the provisional blocks;”
The Court of Appeal in the case of Aikbee Timbers Sdn Bhd & Anor v Yii Sing Chiu & Anor and another appeal [2024] 1 MLJ 948 (Read more about this case in our article) previously held that a developer and/or management corporation was empowered by the SMA to impose different chargeable rates for the maintenance charges for parcels used for significantly different purposes in a mixed development, which comprised of residential and commercial parcels within a subdivided building in a single development.
However, the Court of Appeal distinguished the facts of this case from the Court of Appeal case of Aikbee Timbers, as the development area in Aikbee Timbers is a mixed development project which consists of parcels used for residential purposes and commercial purposes (mall and car park). The Development in this case consists solely of parcels used for residential purposes only (both the Apartments and Villas).
The Court of Appeal followed the decision in the following Court of Appeal cases: –
“[1] Can a [JMB] impose different rates of maintenance charges for different types of parcels in a condominium development? That was the issue which presented itself at the High Court concerning the imposition of maintenance charges in a mixed condominium development comprising of residential, retail shop and car park parcels.
[38] There is also no provision under the [SMA] and the [STA] which empowers the JMB to fix different rates for different types of parcels. In contrast, such a power is expressly conferred on a MC in respect of two specific situations: (i) parcels which are used for significantly different purposes, and (ii) provisional blocks; sub-s 60(3)(b) [SMA].”
“[45] We agree with the submission of counsel for the [MC] that the practice of charging different rates of service charges to take into account the specific amount of usage of different elements of common property for example, lifts and swimming pools does not accord with the legislative intent of the [SMA] which requires the [MC] to impose a single rate of service charges on all parcels according to their share units, unless those parcels are used for ‘substantially different purposes’ according to s 60 [SMA]”
The Court of Appeal explained that Section 60(3)(b) of the SMA only allows the imposition of the different rates provided that the “parcels” are used for “significantly different purposes”. The term “parcel” is defined in Section 2 of the SMA and does not include “common property”.
The parcels in the Development, be they the Apartments or Villas, have the same use, namely, for residential purposes. Therefore, the Apartments and Villas in this case cannot be deemed to be used for “significantly different purposes”, in order to justify the different rates imposed by the MC under Section 60(3)(b) of the SMA.
Based on the reasons above, the Court of Appeal held that the different rates of maintenance charges imposed by the MC on the proprietors of the Apartments and Villas in the Development, are unlawful for being ultra vires Section 60(3)(b) of the SMA.
The Court of Appeal also granted a perpetual injunction to compel the MC to impose on the proprietors of the Villas the same rate of maintenance charges imposed on the proprietors of the Apartments.
This matter is pending an appeal in the Federal Court.
About the author
Goh Li Fei
Partner
Real Estate
Halim Hong & Quek
[email protected]
Chew Jin Heng
Senior Associate
Dispute Resolution
Halim Hong & Quek
[email protected]
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