Strata Management Case Updates – Decision of Menara Rajawali in the Federal Court (21.5.2020) – Can a JMB still apply different rates of charges?

We have reported the High Court’s decision of Muhamad Nazri Bin Muhamad v JMB Menara Rajawali and Denflow Sdn Bhd [2018] 9 CLJ 547 which essentially allows a JMB in applying different rates of charges.

We then reported the development which took place in the Court of Appeal on 10.10.2019 where the Court of Appeal reversed the decision of the High Court and ruled that a JMB cannot apply different rates of charges.

Today, in the Federal Court, leave to appeal to the Federal Court was rejected and the Court of Appeal’s decision remains in-tact which means that a JMB is not allowed to apply different rates of charges despite having different components and common facilities given exclusively to a certain component.

With a decision like this, we foresee there will be a lot of disruptive impact to a mixed development with multiple components since now everyone is to pay a single rate to the JMB regardless whether you enjoy facilities of your neighbours.

The immediate measures to be undertaken by a developer / JMB / MC may include:

(a) re-draw the plans and apportion common facilities;

(b) ensure paying a similar rate equivalent to what the other purchasers pay regardless of the different components;

(c) re-look at the expenditure and draw up a budget to reflect a uniformed rate;

(d) push through the 25% threshold and convene the 1st AGM of Management Corporation.

This article is written by Lai Chee Hoe, Partner of Messrs Chee Hoe & Associates, Advocates & Solicitors, a legal firm in Kuala Lumpur, Malaysia. He practices in the area of strata management and strata management disputes. You can contact him if you have a question.