INTRODUCTION
The decision of the High Court in Perbadanan Pengurusan 10 Boulevard v. Newlake Development Sdn Bhd & Anor [2026] MLJU 1378; [2026] MLRHU 987 provides an important clarification on the limits of a developer’s ability to retain ownership over facilities within a strata development.
At its core, the dispute concerned whether the developer could lawfully designate visitor carparks and landscape areas as “accessory parcels” appurtenant to its own parcel, thereby retaining ownership and control over them, or whether those areas constituted “common property” belonging to all parcel owners.
BACKGROUND FACTS
10 Boulevard is a commercial strata development comprising four office towers. Under the amended Development Order, the development was required to provide 1,302 carpark bays, including 118 visitor carpark bays.
When strata titles were issued, the Developer registered 122 ground-floor carpark bays together with several landscape, boom-gate and ticketing-machine areas as accessory parcels attached to its own parcel comprising the basement carparks. The Developer subsequently rented out the carparks and imposed parking charges on the users.
The Management Corporation of 10 Boulevard commenced proceedings against the Developer and the Director of the Selangor Land and Mines, contending that these areas constituted common property and could not lawfully be retained and monetised by the Developer.
MANAGEMENT CORPORATION’S CASE
The Management Corporation argued that the impugned areas were common property by operation of law. It relied on section 2 of the Building and Common Property (Maintenance and Management) Act 2007 (“BCPA“), which expressly includes carparks, entrances, exits and landscape areas within the definition of common property. Since sections 44 and 45 of the BCPA prohibit contracting out of its provisions, any Sales and Purchase Agreement clause purporting to reserve visitor carparks to the developer was void and unenforceable.
The Management Corporation also relied on the Court of Appeal case of Ideal Advantage Sdn Bhd v Perbadanan Pengurusan Palm Spring @ Damansara [2020] 4 MLJ 93 and High Court case of PJ Centrestage JMB v Cherish Springs Sdn Bhd & Ors [2024] MLJU 591, which emphasised that common property cannot be removed from the statutory scheme through private contractual arrangements.
DEVELOPER’S CASE
The Developer relied principally on the Sale and Purchase Agreements (“SPAs“), which expressly excluded the carparks from the definition of common property and provided that the carparks belonged to the developer. The Developer also argued that the Management Corporation was estopped from challenging its ownership as the arrangement had been accepted for years and maintenance charges had been paid accordingly.
The Developer further relied on the Court of Appeal case of Target Term Sdn Bhd v Waldorf and Windsor Management Corp and Another Appeal [2024] 6 MLJ 598, where the Court held that once carparks are identified as accessory parcels in a certified strata plan, they cannot be regarded as common property.
On this basis, the Developer contended that the impugned areas had been validly accessorised and therefore belonged to it.
FINDINGS OF THE COURT
The Court accepted that the impugned accessory parcels were being used in conjunction with the Developer’s main parcel. However, the Court held that this was not the decisive issue. The real question was whether the visitor carparks should have been carved out as accessory parcels in the first place.
In answering that question, the Court placed significant weight on the Development Order. Although the Development Order did not specify the exact location of the required visitor carparks, the Court found that it is logical that the 122 ground-floor bays were intended to fulfil that requirement, given their location and close correspondence with the number of visitor bays required under the Development Order.
The Court held that the statutory definition of common property under the BCPA prevailed over the SPA provisions. Any attempt to reserve the visitor carparks to the Developer through contractual arrangements was therefore invalid.
The Court also rejected the developer’s estoppel argument, reaffirming the principle that estoppel cannot be used to circumvent a statute or validate an arrangement prohibited by law. Since the relevant SPA clauses contravened the BCPA, they were null and void.
PRACTICAL IMPLICATIONS FOR DEVELOPERS AND OWNERS
This decision serves as an important reminder that developers cannot rely solely on SPA provisions or the designation of an area as an accessory parcel to retain ownership of facilities that are intended to serve the development as a whole.
While Target Term confirms that validly created accessory parcels are generally not common property, this case demonstrates that the Court may still examine whether those parcels ought to have been accessorised in the first place. Where the area in question is intended by statute or planning approval to function as common property, a developer cannot transform it into a private asset through drafting or registration alone.
REAFFIRMATION OF STATUTORY PROTECTION
This High Court decision reaffirms a simple but important principle: where there is a conflict between a private agreement and a mandatory statute, the statute prevails.
Developers cannot privatise visitor carparks, landscape areas and other facilities intended for common use merely by labelling them as accessory parcels. Ultimately, the decision reinforces the integrity of Malaysia’s strata management regime and safeguards common property from being converted into a private revenue-generating asset.
Disclaimer: This article is for general information only and does not constitute legal advice or legal opinion. It should not be relied upon as a substitute for specific legal advice. No person should act (or refrain from acting) based on this article without obtaining advice on the specific facts and circumstances. Halim Hong & Quek does not accept responsibility or liability for any loss or damage arising from reliance on this article. Halim Hong & Quek reserves the right to update, amend or withdraw this article at any time. All rights reserved.
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About the authors
Meyer Thor Xiao Xin
Senior Associate
Dispute Resolution
Halim Hong & Quek
meyer.thor@hhq.com.my
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Tan Chuin-Loong
Associate
Dispute Resolution
Halim Hong & Quek
cl.tan@hhq.com.my
