By NST Property/ Kathy B. - October 16, 2023
bt@nst.com.my
KUALA LUMPUR: The National House Buyers Association (HBA) has criticised the government's proposal to remove the 100 per cent consent requirement from apartment and flat owners before redeveloping a strata property scheme, calling it "a shame".
"First and foremost, occupants have no say in any dissolution of stratified properties or en-bloc. The rights and entitlements rest with the owners, whether registered or having beneficial interests.
"No rightful homeowner should be disadvantaged in any scheme in the name of redevelopment, rejuvenation, en-bloc, or revitalisation, when there are plenty of reasons such a move is unnecessary," HBA secretary-general Datuk Chang Kim Loong said.
Chang told the Business Times that any plan to redevelop, revitalise, or renew strata schemes must be approved by all homeowners rather than through an "en bloc sale."
He also questioned the necessity of encouraging urban migration to already overcrowded cities.
"In Malaysia, there is plenty of development land within the Greater KL vicinity without having to saturate the capital city with more high-end condominiums and commercial buildings, which are already bogged down by overhang and low-occupancy issues.
"Of course we need to develop our cities, but Kuala Lumpur and its fringes are already congested enough. We have to avoid overbuilding within the city. Studies have shown the adverse effects of urban migration. What is required is to develop other parts of the country so Malaysians do not have to keep huddling into the Klang Valley for jobs.
"Why don't we develop the outskirts along the various railway stations? The policymakers should ask the Railway Assets Corporation for its cooperation towards nation-building," he said.
Chang said that the proposal would violate Article 13 of the Federal Constitution, which deals with property rights.
Prime Minister Anwar Ibrahim said that the "consent threshold" would be reduced from 100 per cent to "a level consistent with international practice, like Singapore," to allow for the redevelopment of strata schemes in his 2024 Budget speech, which was tabled on Friday.
Chang said that before proposing a new rate for the so-called "consent threshold," which currently requires 100 per cent agreement from strata-title owners before any renewable measures are permitted, the government must conduct a "Regulatory Impact Analysis" (RIA).
He said that proceeding with a "consent threshold" or "en-bloc sale" with any rate of majority vote will deprive certain homeowners of their properties.
As such, the purported redevelopment law will be in flagrant violation of Article 13 of the Federal Constitution, and its passage will not legitimise it, he said.
"We hope the present government will not emulate the footsteps of its predecessors, who tried to ignore the unconstitutional impact such a law would have on homeowners, whether within or without the Federal Territories. And if we are not careful, the potential redevelopment law could also be extended to cover landed non-strata schemes," said Chang.
Chang believes that this move may spark a battle between'sell' and'stay' owners.
He said that enacting this new law for en-bloc sales without the genuine consent of all owners will create disharmony in any development, strata or not, and could lead to social unrest.
"You'll be surprised at how a quiet and peaceful housing estate can be turned upside down when redevelopment is discussed. The minority homeowners may be forced to give in to pressure from the majority homeowners who decide to sell their properties for large profits.
"This is not a simple business transaction. Money, emotion, and uncertainty among neighbours are all involved. The main beneficiaries of all of this are property developers and their agents who canvass their wares," he explained.
Meanwhile, Tan Ka Leong, group managing director of CBRE | WTW, said that this is a commendable effort to maximise land use in urban areas through higher density development rather than opening up more land for development, in line with the ESG initiative.
However, he told the Business Times that Article 13 should be amended and a clear and transparent process established to allow any en bloc sale.
"There are some old and aged strata developments in city centres where the lands possess higher and better use as compared to the existing buildings erected thereon, and the buildings might be in a poor state of repair due to inadequate maintenance and sinking funds.
"The majority of owners may prefer to sell their units en bloc in order to monetise their old strata units and/or use the proceeds to purchase a new home. Let the people decide," he said.
Source: https://www.nst.com.my/property/2023/10/967528/hba-says-its-shame-reduce-consent-threshold-strata-property-redevelopment
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