If you buy a condo, apartment, or serviced residence in Malaysia, your ownership is governed by strata title — a system that gives you a slice of a building and a vote in how it is run. Most buyers do not think about strata title until something goes wrong: they cannot sell because the title was never issued, or their refinancing application is rejected, or they discover their maintenance fees were mismanaged for years. Understanding strata title is not optional. It is the legal foundation of your ownership.
This guide covers what strata title is, how it differs from individual and master title, the issuance timeline, what happens when it is delayed, how the management corporation works, and what property investors must check before buying a subsale strata unit.
What Is Strata Title?
Strata title is an individual title issued for a unit within a building or land parcel that has been subdivided into parcels. It is the legal document that proves you own a specific unit in a multi-unit development.
The governing legislation:
- Strata Titles Act 1985 (Act 318) — governs the issuance and registration of strata titles
- Strata Management Act 2013 (Act 757) — governs the management and maintenance of strata properties
When a developer builds a condominium with 300 units on a single plot of land, that plot originally has one title — the master title. The Strata Titles Act allows that single title to be subdivided into 300 separate strata titles, one for each unit. Each strata title is a unique document registered with the land office, and each one identifies the exact unit, its share units (proportional ownership of common property), and the registered owner.
Strata title applies to:
- Condominiums
- Apartments and flats
- Serviced residences and SOHOs (where stratified)
- Commercial units in stratified buildings (e.g., shoplots in a mall)
- Gated and guarded landed developments that share common facilities (in some cases)
Individual Title vs Strata Title vs Master Title
These three terms are the source of most confusion in Malaysian property transactions. Here is how they differ.
| Feature | Master Title | Strata Title | Individual Title |
|---|---|---|---|
| What it covers | Entire land parcel | One unit in a stratified building | One landed property |
| Who holds it | Developer (initially) | Individual unit owner | Individual property owner |
| Property type | Development land | Condo, apartment, serviced residence | Terrace, semi-D, bungalow |
| Issued by | Land office | Land office (after subdivision) | Land office |
| Can be used as collateral | By developer | Yes, by unit owner | Yes, by owner |
| Transferable at land office | By developer | Yes, direct transfer (Form 14A) | Yes, direct transfer |
| Common property | N/A | Shared — lobby, pool, corridors, gym | N/A (unless gated community) |
Master Title: The Pre-Strata Phase
When you buy a new launch condo from a developer, the developer holds the master title for the entire land. Your ownership is established through the Sale and Purchase Agreement (SPA). Until strata titles are issued, you own the unit "in equity" — your name is not on the land office register. You are an equitable owner, not a registered owner.
This matters. During the master title phase:
- You cannot do a direct transfer at the land office
- Selling requires an assignment (Deed of Assignment) instead of a standard transfer — which is more complex and more expensive
- Some banks are cautious about refinancing properties without strata title
- Your protection depends heavily on the SPA and the developer's financial health
Strata Title: Full Ownership
Once the strata title is issued and registered in your name, you are the registered owner at the land office. You can:
- Transfer the property using Form 14A (standard land office transfer)
- Use the title as collateral for financing
- Sell through a standard subsale process
- Vote and participate in the Management Corporation
Key takeaway: Master title = developer holds the land, you hold an SPA. Strata title = you are the registered owner. Individual title = for landed properties. Never confuse them.
What Strata Title Covers
When you own a strata unit, your ownership extends to three categories of property within the development.
| Category | Description | Who Controls It |
|---|---|---|
| Your parcel (unit) | The physical space within your unit walls — the space you live in or rent out | You (exclusive use) |
| Common property | Shared areas — lobby, corridors, lifts, pool, gym, gardens, rooftop, structural elements, external walls, pipes | Management Corporation (MC) |
| Limited common property | Specific common areas assigned for exclusive use by certain owners — e.g., designated car park lots, private gardens on ground floor units | Assigned owner (exclusive use), MC (maintenance) |
Your strata title document specifies your share units — a number that represents your proportional ownership of the common property and the land. Share units are typically based on the size of your unit relative to the total built-up area. A 1,000 sq ft unit in a building with a total of 200,000 sq ft of units would get roughly 1,000/200,000 = 0.5% of the share units.
Share units determine:
- Your proportion of maintenance charges and sinking fund
- Your voting power at AGMs
- Your share of quit rent for the land
Strata Title Issuance Timeline
This is where theory meets Malaysian reality.
The Legal Requirement
Under the Strata Titles Act 1985 (Act 318), the developer must apply for the subdivision of the building into strata titles. The SMA 2013 reforms tightened the timeline considerably.
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Current requirements:
| Milestone | Timeline |
|---|---|
| Developer applies for strata title | Within 6 months of the date of issuance of the Certificate of Completion and Compliance (CCC), or the date of delivery of vacant possession (VP) — whichever is later |
| Land office processes and issues strata titles | Typically 12–18 months from application |
| Total expected timeline from VP | 18–24 months |
The Reality Before SMA 2013
Before the SMA 2013 reforms, there was no strict enforcement of issuance timelines. The result was catastrophic. Developments completed in the 1990s and 2000s frequently went 10, 15, even 20 years without strata titles being issued. Some still do not have them.
The reasons were varied:
- Developer did not apply (negligence or deliberate)
- Developer went bankrupt before applying
- Land title had encumbrances or disputes
- Building did not comply with approved plans (unapproved extensions, deviations from building plans)
- Outstanding land premium owed by the developer to the state
Post-SMA 2013 Improvements
The SMA 2013 introduced penalties for developers who fail to apply for strata title within the stipulated period. The Commissioner of Buildings (COB), appointed under the SMA 2013, has enforcement powers including the ability to compound offences. The situation has improved significantly for developments completed after 2015. But for older developments, the backlog persists.
What to Do If Strata Title Is Not Yet Issued
If you own a unit where strata title has not been issued:
- Check with the developer — Has the application been made? What is the status?
- Check with the land office — Is the application pending? What are the obstacles?
- File a complaint with the COB — Under SMA 2013, the COB can compel the developer to apply
- Consult a property lawyer — If the developer is defunct or unresponsive, legal action may be necessary
What Happens When Strata Title Is Not Issued
The absence of strata title creates tangible problems for owners and investors.
| Problem | Impact |
|---|---|
| Cannot do direct transfer | Must use Deed of Assignment (SPA assignment) — more complex, more expensive, longer process |
| Higher transaction costs | Assignment requires separate legal documentation, additional stamp duty considerations, and developer consent (which may attract a fee) |
| Refinancing difficulties | Some banks will not accept properties without strata title as collateral for refinancing. Others will, but at less favorable terms |
| Selling is harder | Buyers and their banks may reject properties without strata title. The pool of willing buyers shrinks |
| No direct registration | Your name is not on the land office register. Your ownership evidence is the SPA and Deed of Assignment chain |
| Management issues | Without strata title, a proper Management Corporation cannot be formed. The JMB (Joint Management Body) operates instead, with less authority |
Key takeaway: No strata title = higher costs, fewer financing options, harder resale. For investors, this is a material risk factor that directly affects liquidity and exit strategy.
Joint Management Body (JMB) vs Management Corporation (MC)
The management of a strata development passes through two phases, governed by whether strata title has been issued.
Phase 1: Joint Management Body (JMB)
| Feature | Details |
|---|---|
| When | From delivery of vacant possession until strata titles are issued and MC is formed |
| Composition | Developer + purchasers |
| Authority | Manages and maintains the common property |
| Legal basis | SMA 2013, Part III |
| Formation | Must be formed within 12 months of VP — the developer must convene the first AGM within this period (Section 17(1), SMA 2013) |
The JMB is a transitional body. The developer is involved because strata titles have not been issued — the developer still holds the master title. Purchasers have representation, but the developer's presence can create conflicts of interest, particularly around maintenance contracts and handover of defect rectification.
Phase 2: Management Corporation (MC)
| Feature | Details |
|---|---|
| When | After strata titles are issued and the MC is established at the first AGM |
| Composition | Unit owners only (no developer) |
| Authority | Full management authority — budget, maintenance, rules, enforcement |
| Legal basis | SMA 2013, Part IV |
| Governance | Annual General Meeting (AGM), elected committee, audited accounts |
The MC is the permanent management body. It is entirely owner-run. Every strata unit owner is automatically a member. The MC has the power to:
- Set and collect maintenance charges and sinking fund
- Engage or terminate property management companies
- Enforce house rules
- Sue and be sued in its own name
- Approve or reject renovations affecting common property
- Take legal action against non-paying owners
The Committee
The MC elects a management committee (MC Committee) at each AGM. The committee handles day-to-day decisions between AGMs. Key positions include chairperson, secretary, and treasurer. The committee is accountable to the MC members — all unit owners.
This governance structure matters for investors. A well-run MC keeps maintenance standards high, manages the sinking fund prudently, and protects property values. A poorly run MC allows the building to deteriorate, the sinking fund to be depleted, and the development to spiral downward. When evaluating a subsale condo, evaluating the MC is as important as evaluating the unit.
Maintenance Charges and Sinking Fund
Under the SMA 2013 (Act 757), every strata unit owner must pay two mandatory contributions.
Maintenance Charges
Maintenance charges cover the operational costs of running the development:
- Cleaning and waste management
- Security personnel and systems
- Lift maintenance
- Swimming pool and gym upkeep
- Landscaping
- Utilities for common areas (lighting, water features, pumps)
- Property management company fees
- Insurance for common property
Charges are calculated based on your share units — your proportional ownership. A larger unit pays more than a smaller unit in the same development.
Sinking Fund
The sinking fund covers capital expenditure — major repairs, replacements, and upgrades:
- Lift replacement
- Repainting the building exterior
- Replastering and waterproofing
- Replacing water tanks or pumps
- Major structural repairs
Under Section 52(3) of the SMA 2013, the sinking fund must be a minimum of 10% of the maintenance charge amount. Many developments set it higher — 20% or even 30% — to build adequate reserves.
What Happens If You Do Not Pay
The SMA 2013 gives the MC strong enforcement powers:
- Interest on arrears — Up to 10% per annum on late payments (per Regulation 6(2) of the Strata Management (Maintenance and Management) Regulations 2015)
- Filing a claim — The MC can file a claim with the Strata Management Tribunal (SMT) for recovery (claims up to RM 250,000)
- Registering a charge — The MC can register a charge against the unit at the land office. This means the arrears become a lien on the property — it must be settled before the unit can be transferred
Key takeaway: Maintenance charges and sinking fund are not optional. Non-payment can result in a charge registered against your title, which blocks any future sale or transfer. Always check outstanding arrears before buying subsale.
Typical Ranges
| Development Type | Maintenance Charge (RM/sq ft/month) | Monthly (for 1,000 sq ft unit) |
|---|---|---|
| Basic apartment / flat | RM 0.15 – RM 0.25 | RM 150 – RM 250 |
| Mid-range condo | RM 0.25 – RM 0.40 | RM 250 – RM 400 |
| Premium condo (full facilities) | RM 0.40 – RM 0.65 | RM 400 – RM 650 |
| Luxury / branded residence | RM 0.60 – RM 1.00+ | RM 600 – RM 1,000+ |
These charges directly impact your cashflow as an investor. A RM 400/month maintenance fee on a unit generating RM 2,000/month rent consumes 20% of gross income. Factor this in before purchase, not after.
For a detailed analysis of how maintenance fees and sinking fund affect rental yield, see our Maintenance Fee and Sinking Fund Guide.
What Investors Must Check Before Buying Subsale
If you are buying a subsale (secondary market) strata property, strata title status is one of the first things to verify. Here is the checklist.
1. Has Strata Title Been Issued?
Ask the seller or agent directly. Verify with a lawyer. If strata title has been issued, ask for a copy. If not, find out why and what the timeline is. No strata title means:
- Transaction via Deed of Assignment (more expensive, more complex)
- Potential difficulty refinancing
- Smaller pool of buyers when you exit
This is a dealbreaker for some lenders and many investors.
2. Is There a Management Corporation or JMB?
If the MC is formed, request:
- Latest AGM minutes
- Latest audited accounts
- Current maintenance charge and sinking fund rates
- Outstanding arrears report (total development arrears, not just the unit)
- Sinking fund balance
A healthy MC has regular AGMs, audited accounts, a positive sinking fund balance, and arrears below 15-20% of total collectible. Anything worse signals management problems.
3. Are There Outstanding Charges on the Unit?
Before completing the purchase, your lawyer should conduct a land search and check for any charges registered against the strata title. Also request a clearance letter from the MC confirming the unit has no outstanding maintenance charges or sinking fund arrears. Under the SMA 2013, the MC can refuse to consent to a transfer if arrears are outstanding.
4. What Are the House Rules?
Strata developments have house rules that restrict what you can do with your unit. Common restrictions relevant to investors:
- Short-term rental (Airbnb) restrictions — some MCs have banned short-term rentals
- Renovation restrictions — timing, scope, and approval requirements
- Pet policies
- Subletting restrictions (rare, but they exist)
Violating house rules can result in fines imposed by the MC or SMT.
5. What Is the Condition of Common Property?
Walk the development. Check the lobby, lifts, corridors, parking, pool, gym, and landscaping. The condition of common property tells you how well the MC is managing the building. Peeling paint, broken tiles, dirty pools, and malfunctioning lifts signal a building in decline — and likely a depleted sinking fund.
Strata Title and Freehold vs Leasehold
Strata title can be either freehold or leasehold. This depends on the underlying land title.
| Land Title | Strata Title Type | Implication |
|---|---|---|
| Freehold master title | Freehold strata title | Perpetual ownership |
| Leasehold master title | Leasehold strata title | Ownership for the remaining lease term (typically 99 years from original grant) |
Leasehold strata properties come with the additional consideration that the lease expires. As the remaining lease term drops below 60 years, financing becomes harder — many banks cap LTV or refuse to lend on short leases. Below 30 years, the property becomes very difficult to finance and sell.
For a comprehensive comparison, see our Freehold vs Leasehold Guide.
Common Strata Title Disputes and How They Are Resolved
The Strata Management Tribunal (SMT) was established under Section 107 of the SMA 2013 to handle disputes related to strata management. It provides a faster, cheaper alternative to civil courts.
| Dispute Type | Example | Resolution Body |
|---|---|---|
| Maintenance arrears | Owner refuses to pay maintenance charges | SMT |
| Common property damage | Owner renovates and damages common property | SMT |
| MC governance disputes | Committee election irregularities | SMT or COB |
| Developer defects | Defects in common property not rectified | SMT (if within jurisdiction) or civil court |
| Short-term rental disputes | MC bans Airbnb, owner objects | SMT or civil court |
| House rule violations | Owner violates approved house rules | SMT |
The SMT can hear claims up to RM 250,000. Awards are binding and enforceable as court orders. For claims above RM 250,000 or issues outside SMT jurisdiction, the matter goes to civil court.
Summary
Strata title is the legal backbone of condo, apartment, and serviced residence ownership in Malaysia. It determines your rights as an owner, your obligations as a member of the MC, your ability to sell or refinance, and the ongoing costs of ownership through maintenance charges and sinking fund.
For investors, the three non-negotiable checks on any subsale strata property are: (1) strata title status — is it issued and registered; (2) MC health — are accounts audited, is the sinking fund adequate, are arrears manageable; and (3) outstanding charges — is the unit clear of liens and arrears.
Do not skip these checks. The price of ignorance is measured in rejected refinancing applications, blocked transfers, and depleted building reserves that you will be forced to replenish through special levies.
For related guides, see Subsale Property Process Malaysia, Condo vs Apartment vs Flat Malaysia, and Legal Fees for Property Malaysia.
Sources
- Strata Titles Act 1985 (Act 318) — JKPTG
- Strata Management Act 2013 (Act 757) — KPKT
- Commissioner of Buildings (COB) — Enforcement Powers — KPKT
- Strata Management Tribunal (SMT) — Claims up to RM 250,000
- Section 52(3) SMA 2013 — Sinking Fund Minimum 10%
- Strata Management (Maintenance and Management) Regulations 2015