Rushing into urban redevelopment without establishing regulatory framework could leave homeowners homeless

• Redevelopment is not a task that the government should out-source to private developers to solve. Before the people’s agonies go out of control, the government needs to put all redevelopment processes on hold until a robust regulatory and monitoring framework is put in place.

The concept of redevelopment where homeowners exchange their present property titles for another future home unit or monetary compensation is not new in Malaysia. However, there has yet to be a proper and well-thought out framework governing its implementation. Consequently, many Kuala Lumpur residents have for years been reeling from haphazard redevelopment attempts by unscrupulous developers and middlemen.

The anticipation of the upcoming Urban Redevelopment Act (URA) has already drawn many hawking developers to the areas identified for redevelopment, most of which house the B40 and M40 communities. For example, Rajawali Flats in Taman Segar, Cheras; older apartments in Taman Sri Endah, Sri Petaling; and Cantik Apartments in Cheras have purportedly been hounded by agents or touts of developers or building contractors pushing to garner residents’ consent for redevelopment. The same will be happening in the 91 residential sites stipulated for redevelopment in the KL Structure Plan 2040 (KLSP2040).

Read also
En-bloc sale — grievances behind ‘successful’ Singapore stories

No proper guidelines lead to confusion, questionable and exploitative practices

Due to the general lack of awareness amongst the homeowners on their rights and what redevelopment entails and the legal processes involved, many homeowners are easily swayed by these agents who employ diverse tactics to garner consent.

In many cases, the process is lopsided from the beginning where residents are compelled through processing steps designed by the agents and touts themselves. It is not uncommon to see agents and touts distributing so-called “survey forms” containing legalistic terms such as “early agreement” with requests for signatures and MyKad details over lunch buffets.

In one location, excerpts of a letter from the authorities were shown to lend credence. Some neighbours are even employed to promote redevelopment through word of mouth. Oftentimes, where middlemen are involved, the identities of the developers are not even formally communicated. Sadly, residents who do not give their consent are sometimes harassed and taunted.

Homeowners hoodwinked into believing only gains, no pains

Amidst such fabricated circumstances, it is challenging for residents to objectively evaluate whether they are making the right and informed decisions. Homeowners who have been approached are often given inducements such as promises of larger condominium units, maintenance fee-free period, additional parking bays and other perks.

However, very few owners are informed of the more important aspects such as how much maintenance fees they need to pay once the “honeymoon” period is over and the selling restrictions or moratoriums imposed on the units they receive.

On top of these, there is a risk of the projects being abandoned, as with the many cases that abound among smaller developers which are not financially strong. Worse still, some of the developers are just merely acting as further agents or middlemen to the real project sponsors who are not known. Amidst such shadiness, there is a high risk of residents losing their shelter altogether in exchange for mere promises of future units and some modest allowances for rentals during the construction period. 

As such, without proper guidelines, transparent approval and regulatory oversight, redevelopment can be easily exploited for commercial profits at the expense of the already disadvantaged communities. Lower-income earners, single parents, elderly and retirees are most at risk. Whilst it is promoted as a means for providing better shelter for urbanites, redevelopment has in reality turned many neighbourhoods into battlegrounds between those who agree and those who disagree, creating a consistently tense living environment for those impacted.

Agents and touts pressuring owners

It was reported recently in The Star Metro that some homeowners in three residential areas in KL have encountered some unknown agents employing scare tactics to pressure them into consenting to potential redevelopment projects. These agents have resorted to misinformation and harassment.

Citing a resident from the report: “One agent told a resident that his apartment can be acquired under the Land Acquisition Act even without his consent.”

“In April 2022, we were also approached by one property developer, who immediately offered money to us for our properties without conducting any town hall meeting (of homeowners),” said another.

Furthermore, residents of Taman Segar also alleged privacy breaches, after their personal details were published on flyers distributed across the neighbourhood.

“Agents with no name cards were also harassing homeowners with red warning letters in hopes of getting their signatures on power of attorney documents,” a representative of a residents association was reported saying.

A resident in Cheras said these agents spoke about the benefits of redevelopment in the area without mentioning whether homeowners would have to incur any hidden or additional costs of maintenance when the new building is completed.

“None of these so-called agents explained the legal processes,” he said.

Many residents have expressed concern that senior citizens unfamiliar with legal processes or the contents of the proposed URA may be exploited.

The three housing developments were among 139 locations across the city identified for possible redevelopment under the KLSP2040.

The report also described the experience of an owner of the 36-year-old Taman Sri Endah flats, which has a football field, recreational park and ample parking bays. 

“One proposed plan by a private developer involves replacing the current seven blocks of five-storey walk-up flats, located on a 4.16ha of leasehold land, with a 54-storey condominium,” said Hj Dzulkarnain Ariffin, a retired government servant with four children.

“However, the land area allocated for existing residents would be drastically reduced to just 0.89ha, while the remaining 3.27ha would be used for 2,916 freehold high-end condominium units.

“They’re offering larger units with facilities like a swimming pool and a gym, but we know that to build these units, and more, they will need to take up our green space, including [the] football field [where my children play at],” he added.

There are also fears of gentrification, displacement of low-income residents and the potential of “land grabs” for commercial developments.

Read also
Can Urban Redevelopment Act really solve urban slum problem? 
Urban Redevelopment Act not just usurping rights of legitimate owners but selling public land

No shortcuts — holistic regulatory framework crucial to guide URA implementation

With or without the proposed URA, a rushed and premature implementation could be disastrous if it was not well supported by proper guidelines, awareness and education to the house owners, coordinating agency and regulatory oversight as practiced in many other countries.

Given the high public interest, redevelopment is not a task that the government should out-source to private developers to solve. Before the people’s agonies go out of control, the government needs to put all redevelopment processes on hold until a robust regulatory and monitoring framework is put in place. This is to ensure the basic rights of homeowners are protected as enshrined in our country’s constitution.

Otherwise, the growing social costs of redevelopment to the people would far outweigh the benefits. Is it really worth it then?

This article is written jointly by JS Han, a policy advisor who regularly works with Kuala Lumpur Residents Action for Sustainable Development Association (KLRA+SD) and Datuk Chang Kim Loong, honorary secretary-general of the National House Buyers Association (HBA).

HBA is a voluntary non-government and not-for-profit organisation manned wholly by volunteers.
HBA can be contacted at: 
Email: [email protected]
Website: www.hba.org.my 
Tel: +6012 334 5676
The views expressed are the writer’s and do not necessarily reflect EdgeProp’s.

EdgeProp.my is currently on the lookout for writers and contributors to join our team. Please feel free to send your CV to [email protected] 

Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!