DEVELOPING MAINTENANCE CHARGES FRAMEWORK FOR MIXED-USE STRATA

DEVELOPING MAINTENANCE CHARGES FRAMEWORK FOR MIXED-USE STRATA DEVELOPMENT

1Kamalahasan Achu*

1Mustafa Omar

1Tan Liat Choon

1Choong Weng Wai,

2Terence Jeyanathan Selvanathan

1Faculty of Built Environment and Surveying, Universiti Teknologi Malaysia

2Invenio Potential Sdn Bhd

ABSTRACT

Maintenance charge is a critical aspect of strata living that ensures the upkeep and longevity of common properties. The obligation to pay this charge is well-regulated by Strata Management Act 2013 and its Regulations in Malaysia. However, whether parcel owners are paying a fair and equitable maintenance charge in the context mixed-use developments has become a subject of litigation and confusion among strata stakeholders. Recent court judgments have sought to provide guidance, allowing, to some extent, Management Corporations to charge different rates for parcels with 'significantly different purposes’. There is also a growing tendency to suggest that Joint Management Bodies may be permitted to do the same. Set within this context, the aim of this study was to develop a framework for maintenance charges in mixed-use strata developments in Malaysia. A combination of selected countries benchmarking and mixed-methods was utilized in this study to develop the maintenance charges framework. The mixed-methods approach involved analysing seven mixed-use strata case studies, complemented by quantitative data related to budgets and cost allocations. The findings highlight the need for a more tailored approach to determining weightage factors for share units and this can be done using exclusive and shared maintenance costs per strata component against its parcel areas. Alternatively, multiple rate of charges could also be implemented using such cost allocations with or without share units based on parcel size and accessory parcel. The developed maintenance charges framework incorporates these factors and emphasizes the importance of clearly delineating exclusive and shared common properties. It also underscores the importance of formal collaboration between authorities and private consultants, along with detailed budget estimation during the design stage of the development to ensure a fair and equitable allocation of maintenance charges.