Service Charge Defaulters
Recovery Rules

General guidance for 2026 — not legal advice. Strata matters are governed by the Strata Management Act 2013; consult your COB or a lawyer for your situation. Renovating a strata unit? Ask us →

Maintenance charges keep a building running, so the Strata Management Act 2013 → gives management strong tools to recover arrears. If you owe, the consequences escalate quickly; if you manage a building, understanding this recovery path helps you protect the community’s funds.

Why arrears are a big deal

Unpaid charges starve the building of funds for security, cleaning, lifts and insurance — hurting every owner, not just the defaulter. When arrears accumulate across multiple units, the management may be unable to pay service contractors on time, causing building deterioration and lower property values for the entire community. In the worst cases, lifts go unserviced, security is reduced, and the building falls into disrepair. That is why the law treats recovery seriously and provides escalating remedies that management is expected to use, not ignore.

The recovery process

1. Reminder & late interest added to the account — an informal prompt to pay before formal steps begin.
2. Statutory written demand for the sum due, giving a stated period to pay.
3. If still unpaid, file a claim at the Strata Management Tribunal → (for claims up to RM250,000) or at court (larger sums).
4. On a binding award or judgment, enforce the debt — including, as a last resort, seizure of movable property in the parcel with the COB’s authorisation.

Recovery methods compared

Late-payment interest

The management may charge interest on overdue sums — commonly up to 10% per annum where resolved by the body. It accrues until you settle in full, so even a modest RM300/month charge left unpaid for 12 months can generate RM30 or more in interest, and the principal keeps growing if further months are missed.

Attaching movable property

As a strong remedy, the Act allows the management (with the Commissioner of Buildings’ authorisation) to seize and sell movable property found in the defaulter’s parcel to recover the debt. This is a last resort but a real and powerful one. Property seized can include furniture and electronics in the unit. Proceeds from any sale are applied to the outstanding debt and costs.

Loss of voting rights

An owner in arrears generally cannot vote at general meetings or stand for the management committee until all outstanding charges are paid in full. This is not just a technicality — it means defaulters lose their voice in all building decisions: the maintenance budget, committee elections, and special resolutions all pass without their input. The more owners in arrears, the more decisions are effectively made by the paying minority. Clearing arrears before an AGM restores your rights and your say.

What management cannot do

• Cut off essential services such as water or electricity as an informal pressure tactic — this is not permitted under the Act.
• Seize property without following the lawful process and obtaining the COB’s authorisation.
• Act outside the by-laws or the Act’s procedures — arbitrary self-help can expose the management to its own liability.
• Discriminate against a defaulting owner in ways not authorised by the Act.

If you dispute the charge

If you believe the charge has been incorrectly calculated or that you have already paid, do not simply stop paying — interest accrues on any undisputed balance regardless of your dispute. Instead, follow this process:

• Gather your receipts and all payment records with dates and amounts.
• Write to the management in writing (email with read receipt, or registered post) specifying the dispute and the amount you believe is correct.
• Continue paying the undisputed portion to minimise accruing interest.
• If unresolved after two written attempts, raise it with the Commissioner of Buildings (COB) of your local authority.
• If still unresolved, file a claim at the Strata Management Tribunal →.

Buyers: always check arrears

Before buying a subsale strata unit, confirm the maintenance and sinking-fund payment status in writing — ask the management for a formal statement of account in the vendor’s name. Outstanding charges attached to the parcel can become your problem as the new owner once the title is transferred. Budget for any arrears in your purchase price negotiation, and insist they are cleared by the vendor before completion or deducted from the purchase price. A diligent buyer’s solicitor will check this as part of the conveyancing search. See maintenance fee & sinking fund →.