Where does your maintenance fee actually go? Here is how to read your strata scheme’s accounts, what to check, and the red flags of a building in financial trouble.
General guidance for 2026 — not legal advice. Strata management is governed by the Strata Management Act 2013; consult your COB or a lawyer for your situation. Renovating a strata unit? Ask us →
Your maintenance charge → funds the whole building — so the accounts are where you see whether your money is well spent. Yet most owners never read them. Here is how to, and what matters. You don’t need to be an accountant: the key numbers are few and the patterns are clear once you know what to look for. Reading the accounts is also your best early-warning system — financial problems in a strata scheme rarely appear suddenly; they build over months and years, and an alert owner can spot them before they become crises.
| Feature | Maintenance account | Sinking fund |
|---|---|---|
| Purpose | Day-to-day running costs | Major, infrequent capital works |
| Typical items | Security, cleaning, utilities, insurance, minor repairs | Repainting, lift/pump replacement, major waterproofing |
| Cash flow pattern | Spent regularly throughout the year | Accumulated as a reserve; drawn for specific projects |
| Can they be mixed? | No — they are legally separate accounts | |
By law these are separate accounts — sinking-fund money should not be used for routine running costs. Mixing them is a red flag of financial mismanagement.
The management must keep proper accounts and present audited financial statements at the AGM, typically including an income & expenditure statement, a balance sheet, and the fund balances. These should be circulated with the AGM notice so owners can review them before the meeting, not just at the door.
High arrears are the most common cause of strata financial distress — if many owners don’t pay, services suffer. A healthy scheme actively pursues defaulters →. Watch the receivables trend year on year. A collection rate persistently below 85–90% of billings is a warning that the budget cannot be sustained.
The sinking fund should be building toward predictable large costs. A scheme with a near-empty sinking fund will hit owners with a special levy when the lifts or repainting come due — a sign of under-reserving. Ask the committee or managing agent for a forward plan: what major costs are anticipated in the next five years, and is the current sinking fund on track to cover them?
If you see these, escalate — see when management won’t act →.
| Indicator | Healthy scheme | Troubled scheme |
|---|---|---|
| Collection rate | 90%+ of billings collected | Below 80%, rising arrears |
| Sinking fund | Growing steadily year on year | Near zero; raided for routine costs |
| Accounts | Audited, circulated before the AGM | Late, incomplete, or not produced |
| Expenditure | Justified, competitive, documented | Unexplained items, inflated contractor costs |
| Special levies | Rare | Frequent or large |
You have the right to inspect the records and accounts and to question them at the AGM. If the management refuses to produce the accounts or denies inspection, that itself is a ground for a complaint — it is not a discretionary favour, it is a statutory right. Buying a unit? Always check the scheme’s financial health and arrears first — see buying property →. A building with healthy accounts and a growing sinking fund is far less likely to hit you with special levies after you move in.
If you are buying a unit in a strata scheme, asking these questions of the managing agent or existing committee before signing is one of the best due-diligence steps you can take. A scheme with growing arrears, a thin sinking fund, and overdue audits can end up costing far more than you saved on the purchase price — in special levies, deteriorating facilities, and ongoing disputes. A financially healthy scheme is a real asset in the sale price and the quality of living. See how the maintenance charge is set → for the budgeting process behind the numbers, and what to do if management won’t act → if the accounts reveal problems.
This guide cites Malaysian legislation and official bodies. Always confirm current rates and rules with the official source:
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