This is one of the HBA’s suggestions to address the plight of Petaling Jaya Old Town shop owners who are being asked to fork out almost RM1 million to extend their leases.
HBA secretary-general Chang Kim Loong said Penang began offering 50% to 80% discounts on the premium to extend the leases for commercial properties last year.
He urged the Selangor government to charge a nominal fee of RM5,000 for the renewal, or emulate Penang’s discount scheme based on the prevailing market value of the relevant property.
“Selangor is friendly with Penang, so they should emulate the good things their counterpart has introduced. Either set a flat RM5,000 fee or base it on the market value and give them 80% off,” he told FMT.
He said this would be reasonable since Selangor has already allowed PJ Old Town residents to renew their leases for only RM1,000.
Chang, representing shop owners in PJ Old Town, submitted a memorandum to Selangor menteri besar Amirudin Shari in May 2022, appealing for the state to charge a nominal fee to extend the 60-year leases of commercial properties.
After two years without any news, Amirudin told the state assembly last week that the Selangor government is looking at how to make lease extensions more affordable, especially for commercial properties.
The menteri besar also said the matter will be referred to the Selangor land office, with a decision on the new formula for the premiums to be decided by September.
Freehold titles the ultimate goal
Chang said his immediate priority is to ensure shop owners get their lease extended at an affordable price, given that some are expiring at the year-end.
Nonetheless, he said the ultimate goal is for leasehold land in PJ to be converted to freehold based on the area’s original land title.
The land that PJ stands on now used to be a rubber plantation that belonged to Effingham Estate, said Chang, and the mother title — or original title — was freehold.
“Along the way, some overzealous people in the land office converted some of that land to leasehold. Those are the ones I’ll be fighting for, as long as they still come under the mother title,” he said.
He added that he is ready to go to court, but expressed hope it would not be necessary given the precedents already set in cases involving Taman Bukit Maluri and Sri Petaling in Kuala Lumpur.
In 2022, the High Court ordered the KL lands and mines department to convert the titles to 24 houses in Taman Bukit Maluri to freehold after finding the 99-year leasehold condition imposed on the land invalid.
The following year, the High Court made a similar order, declaring that 7,000 lots of land had been improperly subdivided into leasehold land from seven freehold titles.
“If I have to go to court, I’m ready. But if I can convince the menteri besar to agree to (converting the titles) then we can all save a lot of time and money. Why go to court when precedents have been set?” said Chang.
He said the conversion exercise could be offered at a nominal fee of between RM5,000 to RM10,000.