Share
This article appeared in the March 12, 2026 issue of the monthly print edition. Subscribe now.
Our social circumstances and community fabrics have changed over the decades. From our independence days, the “kampung” and the “Rukun Tetangga” have been serving us based largely on a voluntary and collective self-help model.
Then, as strata communities sprout up around urban hubs, the Strata Title Act 1985, and Strata Management Act 2013 (SMA) were formed for a more structured and regulated community living.
Now, with the focus shifting to sustainable living, energy conservation, and as the ageing demography dawns upon on us, urbanisation is taking a fresh outlook that leverages a good foundation in strata communities beyond the individual family household.
Notwithstanding the ongoing reviews from time to time, the laws are crying out for updates. What is really lacking is a well-defined and feasible community governance model that will carry us through to a first-world Malaysia.
For a start, do we really need a tennis court (or a gym, and swimming pool) for every single strata-community that we are creating now?
Tennis is certainly not our national sports, and many courts have been underutilised, or have since been converted for other better usage.
The working principles behind every strata-community have always been owners-management, and self-sufficiency. However, the question now, 40 years later, is — are we asking too much of the owners to be involved in mundane, but complex and crucial strata management, and are we providing too many “bells and whistles” in the name of self-sufficiency?
A strata community’s DNA is predominantly designed and driven by a private-sector developer, but are we leaving enough room for the eventual community of individual strata owners to take charge and reshape their own destiny? Are the governing bodies and local authorities at various levels aligned in playing their roles to enable the strata community to thrive and flourish to best serve its own unique needs?
There is an urgency in addressing this regulated community model, because urbanisation is catching up fast across the country, including the recently-adopted similar strata regimes in East Malaysia too. While it is an urban housing solution, it is certainly no longer a residential issue in isolation any more, given the need of integration and mixed usages all under one roof (or rather, one single master title).
Problems that need urgent attention
Below are some of the notable issues in the strata laws that require immediate attention:
1. Updating the concept of share unit (being the basis of everything) in all the strata schemes
a. Mixed-use developments comprise different components such as residential, commercial, and even separately-owned car parks. However, not all owners have the right to access all services and facilities, and as such, it is deemed unfair when they are charged the same management fee rates across the board.
b. Some of the developments predate the SMA, where, during that time, the share unit computation formula was generally based on i) purchase price or ii) per square foot method, largely on a case-to-case basis without further differentiation; unlike the current law where share units are allocated on a com-plex formulation guided by a set of statutory weightage factors like types of parcels, size, usage and location within the strata “building”, etc. To add to the complexity, these weightage factors are not necessarily fair as they were dated with the circumstances at the time the law was initially drafted and passed, what more with the increased complexity in integrated mixed-use strata developments.
c. This absurdity is clear in the given facts of the 2025 Court of Appeal case of Phileo Damansara 1 (PD1), where the Federal Court struck out the appeal made by the management corporation (MC) to impose different rates on different components in the strata development. The Court did not further elaborate on the meaning of “significantly different purposes”. Therefore, the SMA should be reviewed to clearly define what “significantly different purposes” constitute, and perhaps, to be guided by the actual expenses incurred for the respective components in the mix.
2. Duty of developer to ensure sustainability of development with good governance
a. Developers should ensure that the development can be maintained at a sustainable cost even after handover to the management entities.
b. This includes a need to educate purchasers/owners on strata living, which is often overlooked, yet presumed. The onus should be on the developer to raise a collective owners’ awareness that any failure in observing their respective duties or responsibilities may cause the expected maintenance of the strata scheme to be inadequate, therefore expensive in the long run.
c. A handbook on strata living should be given to owners upon handover, with a compulsory induction briefing to clearly explain the rights and responsibilities of all the stakeholders. This will go a long way in preserving the strata harmony in management, in addition to equipping the owners with ease of compliance.
3. Establishment of subsidiary management corporation (SMC) and limited common property (LCP)
a. While the SMA provides the legal framework, the establishment of SMC faces significant challenges that have resulted in very low adoption rates, and only a handful of SMCs are in existence to date.
b. Some of the factors that hinder the formation process are:
*The need of a two-third comprehensive resolution from all the strata owners in the development scheme.
*Unregistered proprietors cannot vote, resulting in insufficient number of valid votes. This is further complicated by the questionable involvement of the owners with provisional share units of the subsequent undeveloped phase or phases, all under the same strata scheme.
*Technical. lengthy and costly procedures that include marking the boundaries of the LCP, and the preparation of the special plan prescribed by the laws, and engagement of professional service providers such as surveyors, engineers, and lawyers.
c. The obvious solutions are:
*Amendment of the SMA to facilitate establishment of SMC along with the establishment of the MC.
*Developer to define and create LCPs and the SMC structure at the early stage when preparing and filing the Schedule of Parcels (Jadual Petak) with the relevant authority.
*Developer to fund the LCP submission fee instead of burdening the MC later to address both the costs, and the technical gaps in the process.
Structured and scheduled timely reviews, updates, and amendments for the above suggestions are crucial. Otherwise, a strata pandemic is in the making, if all the stakeholders only keep passing the buck.
While the Housing and Local Government Ministry is looking at the Urban Renewal Act as the potential legal solution to ageing strata buildings, perhaps the real renewal required is for the ageing strata regulations to keep up with the evolving circumstances, as well as the renewal of the strata users’ mindset in redefining the practice of community living today.
..........
Chris Tan is the founder and managing partner of Chur Associates. He is a regular speaker on strata management issues, and the author of “Strata OMG 2.0 — the latest Strata Owner’s Manual and Guidebook”.
..........
EdgeProp's inaugural monthly print edition is fresh off the press! Free delivery is available for selected regions. Subscribe now.
