In Malaysia, unpaid maintenance charges and sinking fund contributions attach to the parcel, not only to the person who ran them up. Sections 60(4) and 61(4) of the Strata Management Act 2013 let a management corporation recover the money from the proprietor or that proprietor’s successor-in-title, and the courts have treated the sum as one undivided debt that is not split according to who owned the unit in which year. A 2026 Kuala Lumpur High Court decision has now carved out one exception: a bidder who buys through a court-ordered foreclosure auction is not a successor-in-title, and does not inherit the arrears. The management corporation in that case had demanded RM268,571.54 from the new owner and recovered nothing from him.
For anyone choosing between the secondary market and a new launch, the practical lesson is narrower than the headline. The exception covers one specific route to ownership. Every other route leaves the older rule standing.
What the Strata Management Act actually says
Charges and sinking fund contributions are the two recurring payments every strata proprietor owes towards the upkeep of the common property. When they go unpaid, the management body may pursue the current proprietor or the successor-in-title under Sections 60(4) and 61(4). The Act does not define “successor-in-title”, which is exactly where the disputes start.
The Court of Appeal settled the ordinary position in Brightvite Sdn Bhd v Pantai Towers MC [2019] 2 CLJ 439. Arrears were treated as a single statutory debt recoverable from either the defaulting owner or the person who took title after him, with no apportionment by period of ownership. A buyer who bought in 2024 could be pursued for charges that accumulated from 2015, in full. That decision arose from a claim of roughly RM1.08 million in fees built up over six years at a Kuala Lumpur condominium, and it remains the baseline for voluntary transfers today.
The 2026 case, in numbers
The dispute was Perbadanan Pengurusan Megan Avenue 1 v Harjinder Singh a/l Kuldip Singh (Originating Summons WA-24NCVC-5198-10/2025), decided in the Kuala Lumpur High Court and reported in 2026. The parcel was an office unit on Jalan Tun Razak whose previous proprietor, a consultancy company, had stopped paying.
| Item | Detail |
|---|---|
| Tribunal award against the previous proprietor (17 Jan 2019) | RM95,957.97 plus RM250 costs |
| Previous proprietor wound up | 13 Oct 2020 |
| Recovery from the liquidation | Nil |
| Successful bid at High Court e-Auction | 8 Aug 2024 |
| Buyer registered as proprietor | 23 Jun 2025 |
| Amount later demanded from the buyer | RM268,571.54 |
| — accrued charges portion | RM174,047.15 |
| — late payment interest portion | RM94,524.39 |
The interest line deserves a second look. More than a third of the demand was interest, accumulated while the management corporation chased a company that was already heading into liquidation. Arrears that sit unresolved for years do not stay still.
Why the auction buyer walked away
The court examined how the buyer acquired the unit rather than simply noting that he ended up on the title. A foreclosure sale by a chargee bank under an order for sale granted by the High Court, pursuant to the National Land Code, is a creature of statute rather than a negotiated contract between seller and buyer. The Federal Court had already drawn that line in AmBank (M) Bhd v AIM Edition Sdn Bhd [2022] 1 CLJ 831.
Three facts mattered. The previous proprietor was in liquidation and was not acting as a willing seller. The bidder was a complete stranger to it, with no family link, no corporate connection and no evidence that he knew about the arrears. And his title passed by operation of law once the bank’s registered charge was enforced, not by any voluntary transfer he negotiated. On that reasoning he had never stepped into the previous proprietor’s shoes, so he was not a successor-in-title for the purposes of Sections 60(4) and 61(4).
The judgment also weighed the other side openly. A management corporation that cannot collect has to make up the shortfall somewhere, and the burden lands on the neighbours who did pay. The court’s answer was that loading an undisclosed historical debt onto a court-supervised purchaser, without clear statutory wording saying so, would damage the certainty and finality that make judicial sales work at all.
Where the ruling stops
This is the part worth being precise about, because a headline that says auction buyers are safe over-promises.
| How the unit changes hands | Can the buyer be pursued for old arrears? |
|---|---|
| Ordinary subsale between willing seller and buyer | Yes — Brightvite position still applies |
| True judicial sale: chargee bank, High Court order for sale under the National Land Code | No, on the 2026 reasoning |
| Other auctions and assignment-based sales (for example a loan agreement cum assignment) | Undecided — depends on the legal nature of the transaction |
| New launch bought from the developer | No predecessor exists, so no inherited arrears |
Two honest caveats. First, this is a High Court decision on a specific set of facts, not an appellate ruling that settles the question nationwide, and the reasoning turns on the buyer being a genuine stranger to the previous owner. A bidder with a corporate or family link to the defaulter would be arguing from a much weaker position — that connection was precisely what distinguished the earlier Court of Appeal case. Second, the outcome says nothing about charges that accrue after the new owner takes title. Those are his, in every scenario.
What subsale buyers should do about it
The protection exists, and it is procedural. Section 73 of the Strata Management Act lets a prospective purchaser’s conveyancing lawyer apply to the management body for a certificate stating the charges and sinking fund contributions payable for that parcel, when and how they are payable, and any amount still outstanding. It has been available since 1 June 2015, the statutory fee is nominal, and it is the only reliable way to see the arrears before signing.
Four practical moves follow from it:
- Instruct your lawyer to apply for the Section 73 certificate early, not on the eve of completion.
- Have any outstanding sum settled out of the purchase price, with a retention sum held until the management body confirms a zero balance.
- Ask for the figure with interest included — the case above shows how large that component grows.
- Get a written indemnity from the seller for anything that surfaces later.
A seller who resists all four is telling you something. Read that alongside the boundary questions covered in our guide to accessory parcels and common property, since both problems tend to surface in the same older developments.
Why this looks different on a new launch
Buying an unsold parcel directly from the developer removes the question entirely: there is no previous proprietor, so there is nothing to inherit. Charges begin when vacant possession is delivered, and during the developer’s management period the developer carries the charges attributable to the parcels it has not yet sold.
That is not an argument that new launches are risk-free — the risks are simply different ones, and they are front-loaded into the sale and purchase agreement rather than hidden in a ledger. The maintenance rate per square foot quoted at booking, the size of the sinking fund, the defect liability period and the handover timeline are all worth interrogating before you sign, which is why they sit on our new launch booking checklist alongside the developer’s track record. The broader step-by-step process is set out in how to buy a new launch property in Malaysia.
Title type shapes the maintenance picture too. A serviced apartment on a commercial title carries a different cost base from a residential-title condominium, and dual key layouts raise their own questions about who uses what. Tenure matters separately again, as explained in our comparison of freehold and leasehold.
How this fits the wider 2026 market
Arrears cluster where buildings are old, occupancy is patchy and collection has been weak for years. With completed unsold stock still elevated across the Klang Valley, Penang and Johor — the picture we set out in our review of Malaysia’s residential overhang — plenty of secondary stock is trading at prices that look attractive precisely because the building’s finances are not. Policy is moving in the same direction: the build then sell shift and the tighter home loan approval environment both push buyers towards checking a development’s balance sheet, not just its address.
If a subsale unit in a well-known building is priced well below its neighbours, the maintenance ledger is one of the first places to look for the reason. Buyers comparing that against new stock in the same neighbourhood can start with our area listings for KLCC, Mont Kiara and Bukit Jalil, or browse the full range of new launch projects.
Frequently asked questions
Can a buyer be forced to pay the previous owner’s maintenance charges in Malaysia?
Yes, in an ordinary subsale. Sections 60(4) and 61(4) of the Strata Management Act 2013 allow a management body to recover unpaid charges and sinking fund contributions from the proprietor or the proprietor’s successor-in-title, and the Court of Appeal has treated the arrears as one undivided debt that is not apportioned by period of ownership.
What did the 2026 High Court ruling on auction buyers decide?
In Perbadanan Pengurusan Megan Avenue 1 v Harjinder Singh a/l Kuldip Singh, the Kuala Lumpur High Court held that a buyer who acquired a strata parcel through a High Court e-Auction following a bank’s foreclosure was not the previous proprietor’s successor-in-title, and was therefore not liable for RM268,571.54 in historical arrears and interest.
Does the ruling apply to every property auction?
No. The reasoning turns on a true judicial sale — a chargee bank selling under a High Court order for sale granted under the National Land Code, to a bidder unconnected to the previous owner. Other auction routes, including assignment-based sales, were not decided, and voluntary private transfers remain governed by the earlier Court of Appeal position.
What is a Section 73 certificate and why does it matter?
Section 73 of the Strata Management Act 2013 allows a prospective purchaser’s lawyer to obtain a certificate from the management body setting out the charges and sinking fund contributions payable for a parcel and any amount still outstanding. It has been available since 1 June 2015 and is the standard way to discover arrears before completing a subsale.
Do maintenance charges follow the unit or the person?
In practice they follow the parcel. The statutory debt is tied to the parcel and may be recovered from whoever is the proprietor or successor-in-title, which is why the debt can survive a change of ownership even though the person who failed to pay has moved on or, as in the 2026 case, been wound up.
Who pays maintenance charges on a new launch condo before it is sold?
During the developer’s management period, the developer is responsible for the charges attributable to parcels it has not sold. A buyer’s own liability begins on delivery of vacant possession, so there is no predecessor’s arrears to inherit on a new launch purchase.