Urban Renewal Act: 30-year threshold on building age too low, says expert

• “The principles of land valuation, compensation calculations, and the legal framework governing land acquisition must be reviewed to reflect current market trends,” said Prof Dr Ismail Omar in the forum.

KUALA LUMPUR (March 27): With the proposed Urban Renewal Act (URA) set to be tabled in June, an expert has said the building age threshold should be higher than 30 years.

The proposed Urban Renewal Bill by the Housing and Local Government Ministry has stipulated the consent threshold for participation to be 80% for buildings of 30 years, 75% for buildings more than 30 years, and 51% for abandoned buildings.

Speaking at an event titled “Civic Lens: Urban Renewal Act Forum” on Tuesday, National House Buyers Association (HBA) secretary-general Datuk Chang Kim Loong asked: “Why is 30 years [the eligibility point]? JKR (Public Works Department) states that a building's lifespan is 70 to 80 years. If I had a bank loan of 35 years, I wouldn’t even have paid off my loan yet, and then you want to take my property —  that's the issue here”.

Chang also pointed out that there are several developments owned by Kuala Lumpur City Hall (DBKL) and government agencies. If the government could launch redevelopment projects for these buildings, which are owned by a single entity like DBKL, it would be much easier and more efficient.

Besides that, he noted that the proposed URA contravenes Article 13 of the Malaysian Federal Constitution, which states that no person shall be deprived of property save in accordance with law.

Furthermore, he pointed out that Section 57 of the Strata Titles Act 1985 (Act 318) requires unanimous resolutions. Therefore, enacting the URA without obtaining genuine consent from all owners could disrupt any strata development and potentially lead to social unrest.

Concerns on compensation not fully addressed

The forum organised by the Institute for Strategic Analysis & Policy Research (INSAP) also heard from the Land Professionals Association of Malaysia (PERTAMA) president Prof Dr Ismail Omar.

Ismail said while the Land Acquisition Act has been in place since 1960, the compensation for land acquisition has not been comprehensively implemented. Many landowners receive payouts significantly lower than the market value, leading to dissatisfaction and controversy.

He acknowledged that the URA plays a significant role in urban redevelopment, but its impact on homeowners must be carefully considered. The principles of land valuation, compensation calculations, and the legal framework governing land acquisition must be reviewed to reflect current market trends.

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