Mixed views on en bloc strata sales
> House Buyers Association say majority should not rule, whereas property agents think they should
PETALING JAYA: Property and housing experts are divided on the issue of en bloc strata sales, after the Department of Director General of Land and Mines said it was looking at changes in legislation to facilitate strata property renewals.
Earlier in May, it was reported that the department, under the Natural Resources and Environment Ministry, had set up a task force to study and come up with proposals that would ensure the efficient implementation of strata redevelopment.
The task force, which was set up last year, proposed to establish a tribunal to hear disputes or complaints from any stakeholder on any strata renewal plan and one of the initial suggestions was to have consent from a simple majority of 51% of owners before hearing out redevelopment plans submitted by the public or property developer.
The redevelopment plan would then be assessed by external valuers before proceeding to a second voting session, which may require 70% to 85% majority consent.
Presently, only en masse sale is practised as there is no legal provision for en bloc sales of strata properties.
Under en masse sale, 100% consent from all unit owners is required before the sale can go through.
Recall that the en masse sale of Desa Kudalari fell through when some of the owners refused to sell.
The condominium, which is over 30 years old, is strategically located close to KLCC. The low density project has 186 units and had attracted interest from 12 bidders.
CBRE-WTW managing director Foo Gee Jen said there is a need to change the law to allow the majority of unit owners to sell, similar to what is practised in Singapore where buildings aged 10 years and above only need 80% consent from owners.
“In the future, there may be old properties in slum areas that may need to be redeveloped.
“Let’s say there are old flats with 100 units, it could be very run down and 99% of owners want to sell but under the current law, if just one person doesn’t want to sell, it would deprive the other 99% of sellers,” he told SunBiz.
“There are concerns over manipulation by developers but if it is done according to procedure, I doubt it will be a hindrance to the buyers and sellers,” he said.
Foo, who is also president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia, said that a transparent process is key to the successful implementation of en bloc strata sales.
He suggested that a tiered system be established when getting consent for owners for example, 80% consent for buildings more than 30 years old and 75% consent for buildings more than 40 years old.
“In Singapore, 75% consent is required for the en bloc sale of a building that is more than 30 years old. We could use the same model and maybe increase the threshold to 80%,” he added.
However, National House Buyers Association secretary-general Chang Kim Loong said it is against the idea of introducing the en bloc strata sale mechanism, which is contrary to the safeguard provided in the Strata Titles Act.
“In Singapore, there is limited land so there is no choice but Malaysia is different. If we are talking about a 50-year-old building, then the scheme can be considered but the building should first be certified condemned by professionals or local councils.
“Otherwise we should never force people out of their houses. If you want to sell your roof, that’s your prerogative; but don’t sell my roof along with yours,” he said.
In addition, strata properties have a sinking fund under the Strata Management Act, which can be used for repairs and refurbishments thus the issue of deterioration should not arise, unless the fund has been depleted.
He said it is unfair to force people out of their homes with the en bloc strata sale, especially when there have been success stories under en masse sale for example, Perbadanan Negeri Selangor’s (PKNS) redevelopment of dilapidated low-cost flats and the Razak Mansion walk-up flats in Sungai Besi. Project: Sunway GEOLake Residences Type: Condominiums and townhouses Price: RM900 psf (average price) Developer: Sunway Property
This leasehold project is the final phase of the Sunway GEO series located within Sunway South Quay. The project offers 420 condominium units and 44 townhouses built on 6.49 acres. It is a low density project with 70 units per acre. Residents will be connected to transportation services such as BRT, LRT and KTM as well as direct connection to Sunway Medical Centre.