Two pots of money. One gets mistaken for the other constantly — and mixing them up isn't just sloppy, it can be unlawful. If your committee can't say, in one sentence each, what the maintenance account and the sinking fund are for, this one's for you.
The one-sentence version
Maintenance account = the day-to-day running money. Sinking fund = the big-future-repairs money. You don't raid the second to cover the first.
The maintenance account
This covers the actual and expected regular costs of keeping common property running: cleaning, security, insurance premiums, minor repairs and painting, administration. It's the money that keeps the lights on and the guards paid this month.
The sinking fund
This is capital reserve — for the big, infrequent, expensive works: repainting the whole building, replacing lifts or pumps, major refurbishment. Under the SMA 2013 the sinking fund is normally set at a minimum of 10% of the maintenance charges, and it must be held in a separate account. A committee can vote to contribute more, but not less, than the baseline the law expects.
The mistakes that cause real damage
Dipping into the sinking fund to plug day-to-day shortfalls — often improper, and it leaves you exposed when a lift dies.
Under-contributing to the sinking fund, then facing a special levy panic when major works land.
Blurring the two accounts, so no one can tell where the money actually went — an audit nightmare.
Frequently asked questions
Can we use the sinking fund for routine repairs?
Generally no. The sinking fund is for capital works — repainting, replacing fixtures, major refurbishment — not day-to-day maintenance. Keep them separate.
How much should go into the sinking fund?
Normally at least 10% of the maintenance charges under the SMA 2013. Owners can vote to raise the rate at a general meeting.
Who decides how these funds are spent?
The JMB or MC, within the limits of the SMA 2013 and your by-laws, with proper accounting and reporting to owners.
This article is general information for Malaysian communities and is not legal advice. Verify specifics against your own by-laws and seek professional advice where needed.
Let JaGaCount keep both funds clean and correctly separated:
Sales: hello@jagaapp.com
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