This article first appeared in City & Country, The Edge Malaysia Weekly on October 12, 2026 - October 18, 2026

Can common property be turned into an accessory parcel? Common property refers to shared areas in a stratified development collectively owned by all parcel owners, whereas an accessory parcel is a designated private space, such as a parking bay, assigned to a specific owner.

So, is such a conversion possible? In theory, no. Yet, that is precisely what happened at Centrestage Petaling Jaya, a mixed-use development in Section 13 comprising two SoHo blocks, a single tower of serviced apartments and a six-storey podium. The development received its Certificate of Completion in July 2014, with vacant possession delivered between June and July that year. Its joint management body (JMB) was established in May 2015.

At the heart of the legal battle, which began in 2017, are 342 parking bays, seven basement areas, landscaped areas, the rooftops of Levels 6 and 14, and a recreation area. All were deemed common property but had been sold as strata units or turned into accessory parcels by the developer, Cherish Springs Sdn Bhd, to Leadmont Properties Sdn Bhd, a related company.

Leadmont Properties then used some of the acquired parcels as security for loans from Hong Leong Bank and Maybank. According to court documents, the banks extended the loans without knowing that the properties had been wrongly acquired, and said they were unaware of the alleged fraud when the loans were granted.

When the JMB of Centrestage later discovered that areas it regarded as common property had been registered as private assets, it took the matter to court.

In February 2024, the High Court ruled that the disputed areas were common property and that the developer’s strata titles over them were defeasible. It ordered Cherish Springs’ liquidator, after it was wound up in 2019, to hand over the management documents, rectify the strata register and correct the company charges. Leadmont was also ordered to surrender the disputed areas and pay the JMB the rent and income derived from them.

Leadmont Properties, Hong Leong Bank and Maybank subsequently appealed. On Sept 21, a three-member Court of Appeal bench led by Datuk Azizah Nawawi unanimously dismissed the appeals. It agreed that the plan to carve out the areas as accessory parcels was “an afterthought”, conceived later to deprive owners of property that was always intended to remain common. The court affirmed that Cherish Springs and Leadmont were guilty of fraud and/or false misrepresentation, and that the registrations deprived buyers of their contractual and legal rights to use the common areas.

The Court of Appeal also held that the banks’ security over the disputed properties was invalid. While the banks were unaware of the wrongdoing, the court said they should have verified whether Leadmont had a valid right to the properties before granting the loans.

The Centrestage case shows how shared spaces can be reclassified on paper without anything changing on the ground. Chris Tan, founder and managing director of law firm  Chur Associates, says the case has to be read from the perspective of when the development was built. At the time, it was subject to the previous regime — the provision of the Building and Common Property (Maintenance and Management) Act 2007 (Act 663) (BCPA) — as the Strata Management Act 2013 (SMA 2013) had yet to be enforced. The BCPA was repealed after SMA 2013 took effect in 2015.

Tan explains that, under the old rules, strata titles were applied for only after a project is completed. “You apply for a strata title after completion, which means that only when you deliver everything do you apply for the strata title.”

That meant the line between private and common areas was not fixed until late in the process, leaving room for building plans to be amended and for “negotiation”, he says. This is why he describes the dispute as being about facts rather than law.

Under the current law, the process is much stricter. “The new law introduces the Schedule of Parcels, which sets out the number of strata titles, accessory parcels and share units in a predetermined format,” says Tan.

The Schedule of Parcels is a legal document that serves as a floor plan, showing the layout and measurements of the parcels in a development. It also sets out the proposed share units for each parcel, as well as the total share units for the development. In practice, this establishes what is private and what is common at a much earlier stage.

According to Tan, the harder questions following this judgment is what happens next to the disputed area. Since the strata titles have already been issued, handing it back to the JMB or management corporation (MC) is not a straightforward process. It would require terminating the strata subdivision scheme and reissuing it.

In this context, termination means dissolving the strata subdivision and reverting the property to a single master title.

He adds that if the strata titles do end up with the JMB or MC, they would have to pay the service charge and sinking fund. This would be unusual because a JMB or MC manages the development on behalf of the residents but does not ordinarily own the individual strata units. The strata titles would normally belong to the respective unit owners, rather than the JMB or MC.

Tan clarifies that he does not dispute the court’s rationale, but emphasises that “there are consequential issues that need to be addressed”.

“It will be interesting to see what happens after this judgment, because consequential issues are harder to deal with,” he says.

For buyers and management bodies that suspect that a similar issue may exist in their own development, his advice is to “gather more facts before jumping to a conclusion, because the allegation is very serious”.

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