Court Rules Developer Had No Right to Collect RM1.6m in Rent for Facilities

PUTRAJAYA — The Court of Appeal ruled that a property developer who collected RM1.6 million in rent over 14 years for the use of facilities such as a clubhouse and swimming pool had no legal right to own or profit from them.

Case Overview

The court found that the facilities, located within a housing development, rightfully belong to the residents and fall under the management of their joint management body (JMB). The developer had continued renting out the clubhouse, swimming pool, and two additional spaces despite having no legal ownership after the handover of common property.

According to reports, the developer continued leasing parts of the facilities for commercial and recreational use, collecting around RM1.6 million in total revenue over more than a decade.

Court Decision

The three-member Court of Appeal panel led by Justice Datuk Che Mohd Ruzima Ghazali concluded that the developer had acted beyond its authority. The court affirmed that once a project's common facilities are transferred to the JMB under the Strata Management Act, the developer no longer retains any ownership rights.

“The facilities are for the common enjoyment of all residents, and any profit derived from their use must benefit the community, not a private developer,” the court stated.

The panel dismissed the developer's appeal and ordered the return of all unlawfully collected rent to the JMB.

Legal Implications

This decision reinforces the principle that developers cannot continue to profit from communal amenities after management responsibilities are formally transferred to resident bodies. It also sets a precedent for other housing developments, emphasizing residents’ rights over common property.

Summary

The Court of Appeal confirmed that the developer unlawfully profited from community facilities, directing the return of RM1.6 million in rent to the residents’ management body.

Author’s Summary: The Court of Appeal ruled that a developer wrongfully earned RM1.6 million in rent from shared facilities, confirming residents' ownership rights under the Strata Management Act.

Malay Mail — 2025-11-28