'Private land leasing for housing' idea first mooted by Iskandar Investment for Medini project

PETALING JAYA: The idea of a scheme that would allow private corporations to lease out freehold land that they own for housing development was first mooted in 2012 by Iskandar Investment Bhd (IIB), a strategic developer of Medini in Johor.
National House Buyers Association (HBA) secretary-general Chang Kim Loong said IIB approached HBA back in 2012 to talk about a land lease structure in Medini but HBA rejected the idea.
The issue did not crop up again until last year, when the Department of Lands and Mines under the Natural Resources and Environment Ministry hosted a session in November to brief industry stakeholders.
"In November last year, they presented the paper to us. They invited quite a lot of stakeholders; we were not the only ones there but we were the only ones to bring up issues," Chang told SunBiz.
The public session was chaired by Department of Lands and Mines director-general Datuk Seri Dr Sallehuddin Ishak. Besides HBA, stakeholders who were invited included the Urban Wellbeing, Housing and Local Government Ministry, Perbadanan PR1MA, Malaysia, Land Surveyors Board and Malaysian Institute of Architects.
According to a lawyer with knowledge of the issue, the proposals were already drafted by then. The proposals were to introduce a new chapter in the National Land Code 1965 and an amendment to the Strata Title Act 1985.
"All the amendments were already drafted. They already had plans to push them through before Parliament was dissolved," said the lawyer, who declined to be named.
"This all started with the notion that the properties to be sold are all special properties; in other words they are meant to be sold to foreigners for purposes of investment. At the end of the day, they said they don't want these properties to end up in the hands of foreigners," Chang said.
However, both the lawyer and Chang are concerned about the impact of such changes in the national law on the housing market and the future of house buyers.
"Already in the market, there are big-time developers now buying up freehold land. As soon as this is passed, freehold land is going to be like gold. They will sell it to our children and grandchildren on leases of 99 years whereas they (developers) become the perpetual owners," said Chang.
"After the lease expires, they can take it back. Whether to renew or not is the prerogative of the landowners … we are very worried as this will open up a new can of worms," he added.
According to the lawyer, some parties see this proposed scheme as a progressive step, as Hong Kong and Singapore also have this concept.
"However, they don't have land like what we have here in Malaysia. So do we want to take this step?" he asked.
At present, projects in Medini are being developed under a private lease scheme. Some of the stratified residential projects in Medini as listed on IIB's website are Iskandar Residences, The Meridin, 1Medini and Paradiso Nuova.
"If ever the private lease scheme is to be adopted, the government could consider passing a new law strictly for the Medini/Iskandar/Forest City, JB projects similar to the Kampung Baru Development Corporation Act. 2011 (Act 733) and its land ownership restrictions," said Chang.
He said the Council of Eminent Persons has been notified about the proposed scheme and the association hopes to meet with the new Urban Wellbeing, Housing and Local Government Minister to share its concerns about the proposal.