The Strata Management Act 2013, it is clearly stated and defined in terms of collection of funds, allocation of account and the purpose of each of the fund. JMB/MC will always ensure this matter is always being complied with. Under the Act, it is the duty of developer/ Joint Management Body (JMB) / Management Corporation (MC) to collect charges and sinking fund. JMB or MC will ensure that Collection and Usage of Charges and Sinking Funds is always complied with Strata Management Act 2013.
Table of Contents
Charges
Charges means any money collected to be deposited into the maintenance account shall be solely for the purpose of meeting the actual or expected general or regular expenditure necessary in respect of maintaining the common property in good condition on a day to day basis.
Usage of charges
The usage of charges are as follows:
- Paying for cleaning & security services for the common property.
- Paying premiums for the insurance approved in general meeting.
- Paying for minor painting on the premises of the common property.
- Paying for repair on any faulty wiring system of the common property.
- Paying for maintenance and inspection of the main water tank.
- Paying fees incurred for the administration & auditing of the accounts required to be maintained.
- Paying the fees for the managing agent and allowances or expenses of the members of management committees.
- Paying for expenditure in relation to procurement of services, including the engagement of consultants, legal fees or other fees, properly incurred or accepted in the performance of JMB/MC functions.
Usage of charges include paying for the expenses incurred in providing cleaning services for the common property, security services and amenities for the occupiers of the building.
Paying any premiums for the insurance approved by a special resolution in a general meeting.
Complying with any notice or order given or made by the local authority in respect of periodical inspection of any building in the development area in the manner as specified in the development area in the manner as specified in the Street, Drainage and Building Act.
Minor painting on the premises of the common property and replacing or repair any faulty wiring system, carrying out inspection, maintenance and report of the main water tanks, paying rent and rates.
Paying any fee incurred for the auditing of the accounts required to be maintained, paying all charges reasonably incurred for the administration of the accounts required to be maintained under Strata Management Act as may be determined by the Commissioner of Building
Paying the remuneration or fees for the managing agent, paying for the allowances and other expenses of the members of management committee, paying any expenses, costs or expenditure in relation to procurement of services, including the engagement of consultants, legal fees or costs and other fees and costs, properly incurred or accepted in the performance of MC functions and meeting other expenses of a general or regular nature relating to the maintenance and management of the building or land intended for subdivision into parcels and the common property.
Sinking Funds
Sinking funds means money collected to be deposited into sinking fund account that shall be used solely for the purposes of meeting the actual or expected capital expenditures for the upgrading and refurbishment of the common property and any other capital expenditure as deems necessary.
Usage of Sinking Funds
The usage of sinking funds are as follows:
- Paying for the painting or repainting of any part of the common property.
- Paying for the acquisition of the any movable property for the use in relation to the common property.
- Paying for the renewal or replacement of any fixture or fitting comprised in any common property.
- Paying for the upgrading and refurbishment of the common property and any other capital expenditure as deems necessary.
Conclusion
In conclusion, under the Strata Management Act 2013, it is compulsory for the Developer / JMB / MC to maintain two different bank accounts. They are for two different purpose, namely for usage of Charges account and usage of Sinking Funds account.
Normally these two mentioned funds are collected on a regular basis either on a monthly or quarterly basis. It is the duty of the Developer/JMB/MC to deposit the fund collected into the respective accounts. They are also responsible to prepare and manage all the financial records for each transaction, balance sheet, profit and loss statement. An auditor shall be appointed to conduct an annual audit for the account to be presented to the parcel owners during the general meeting (AGM). In addition, the audited account shall be lodged with the Commissioner of Building (COB) within 14 days.
