THERE have been calls to enact an Act to facilitate en bloc sale in Malaysia in an effort to redevelop properties that are old and unmaintained in view of land shortage in urban areas.
While redevelopment may benefit developers and local authorities, it may not be at the best interest of some building or home owners.
As such the proposal has been rejected by some parties in the interest of home owners, thus raising the question of the need for an En Bloc Sale Act.
In a Jan 14, 2017 report, Focus Malaysia has said that an Act on en bloc sale was needed as the current law in Malaysia required all owners agree to sell their units for a re-development of a particular property to take place.
Such act, the report said, was practised in Singapore and Hong Kong, while in Malaysia, a single owner could stop a sale as consent to sell must be obtained from all owners.
Assuming that 90% owners have agreed to sale, the bidder cannot redevelop or rejuvenate the building as long as the remaining 10% of units did not give their consent, the report stated.
The legislature in Singapore, on the other hand, provides for en bloc sales where as long as 80% of owners agree to the sale, the deal is done as the bidder can compulsorily acquire the remaining 20%.
According to The Star’s report in June last year, then Federal Territories Minister Khalid Samad told the Dewan Rakyat that government was mulling a new piece of legislation to ensure an effective and implementable urban renewal process, which could bring about much needed finality and certainty in how the process of urban renewal was done in Malaysia.
Sharing his sentiment, the same report quoted Savill Malaysia executive chairman Christopher Boyd as saying, while 100% agreement was good, it may be difficult to obtain as some owners might not be in the country, deceased or may have lost the property titles.
Meanwhile, National House Buyers Association (HBA) honorary secretary-general Chang Kim Loong commented that the proposal to enact urban redevelopment law by the Federal Territories (FT) minister seemed to ignore the unconstitutional impact of such law on home owners, the Edge Property reported in May 2019.
“Little does the FT minister seem to realise the far reaching implications such a law will have on Article 13 of the Federal Constitution, and the principles of indefeasibility of title as enshrined in the National Land Code which the Federal Territories are bound by.
“We hope the FT minister is not swayed by the whisperings of commercial-minded developers, hence this ‘mulling of a proposed law to govern redevelopment or renewal’”, Chang was quoted as saying.
Chang explained that the ‘redevelopment or renewal’ law was likely another name for the forced ‘En Bloc Strata sale’ proposal, whereby a developer would approach owners and persuade them to part with their property in consideration for the market rate of said property.
Upon obtaining the land, the original buildings would be demolished to make way for a new development, priced high above the original rate of the demolished buildings.
He also said, often than not the original building was termed dilapidated or unsafe without any authoritative findings and conclusions, adding that HBA viewed this as forceful acquisition of certain commercially situated land area.
Chang termed it forceful as the en bloc sale/redevelopment/renewal law only upheld the might of the majority, without taking into account the constitutional rights of those who do not wish to dispose of their property even with considerable compensation because they have lived there their entire lives.
He further argued that homeowners should have the freedom to decide on redevelopment of their housing schemes without a law that allowed the majority and third parties to override the constitutional right of minority homeowners who may be old, infirm, have no living relatives or a voice.
He concluded saying HBA’s stand was that any redevelopment/rejuvenation/renewal must have the consent of all owners and that current laws were sufficient for renewing dilapidated buildings without sacrificing the interests of owners. – Sept 25, 2020
