Parcel quit rent should be calculated based on market conditions, say stakeholders

PETALING JAYA (Nov 4): Key industry stakeholders have raised concerns over the high rates resulting from the introduction of parcel quit rent for stratified properties.

They said the government should consider calculating the quit rent based on current market conditions to avoid burdening property owners.

In a joint statement last Saturday, the National Chamber of Commerce and Industry Malaysia (NCCIM), the Building Management Association of Malaysia (BMAM) and the Malaysia Shopping Malls Association (PPK) lauded Putrajaya’s move to replace the previous levy on the master title for stratified properties with the introduction of the parcel quit rent.

The previous quit rent levy on the master title was cumbersome as the Joint Management Corporations (JMBs) or Management Corporations (MCs) would have to calculate the respective share of the Quit Rent to be paid by each and every parcel owner in a development.

“Not only is the quit rent collection from each parcel an arduous task, the JMB or MC would also have to ensure that every parcel has paid-up before they have sufficient funds to pay the quit rent on the master title.

As such, these delays could potentially expose the JMB or MC to penalties and even forfeiture, they said.

To recap, the adoption of parcel quit rent came into effect on June 2018 for all properties that have received strata titles.

“However, as the Malaysian property market has remained stagnant over the past few years, quit rent should reasonably be expected to mirror these tepid property valuations. Furthermore, increasing this levy could be untimely and adds to an already burdensome increase in cost of living,” they said.

The parcel quit rent is designed to prevent payment delays by JMBs or MCs, ensure greater responsibility from individual parcel owners, and ultimately result in the government enjoying earlier and more complete collection of quit rent.

“However, we hope that the authorities would reconsider increasing the quit rent – keeping the parcel quit rent equal to the previous master title quit rent can be deemed fair and equitable,” the organisations said.