KPKT says no en bloc sale for any Urban Renewal Act (URA)

KPKT says no en bloc sale for any Urban Renewal Act (URA)

Urban Renewal Act (URA) will not adopt en bloc sale. Erm… What is en bloc sale?

Briefly, en bloc sale meant the collective sale of all the units within the development to one developer / new owner and all the owners will collectively get a portion of the sale of the whole block or blocks. For many developed property markets, en bloc sale also meant that as long as a certain majority number of owners willing to sell is reached, then sale becomes a certainty.

In Malaysia this is not the case; no such thing as en bloc sale

Even if 1 out of 1,000 units said NO, then the sale of the whole block is stopped. Or maybe a few owners of the units could not be found, then the sale of the whole development will stop. This is not good if the targeted development is a dilapidated one or in actual need of a better development. For example, an old 20-storey block could better serve the people if it’s now rebuilt to 50-storey instead with more units. This is one reason why the Urban Renewal Act (URA) has been proposed and has been in the news for quite some time. It may be tabled again in Parliament next month.

Owners do not need to relocate even with URA

Read on for the article in malaymail.com The government has decided not to adopt the en bloc sale model in any urban renewal project to avoid forced relocation and gentrification, said PLANMalaysia Deputy Director-General (Development) Saidin Lateh.

He said the en bloc approach practised in Singapore, Hong Kong and parts of Australia allows owners to collectively sell their properties and relocate. However, this contradicts the Urban Renewal Bill (RUU PSB), which guarantees owners the right to return to replacement units at no cost.

“We will not implement en bloc sales. In other countries, once 80 or 90 per cent of residents agree, a tender can be opened, owners receive compensation and move out.

“Malaysia takes a different approach. We will secure 80 per cent consent to begin consultations, and we guarantee that owners can return and continue living in the same area once construction is completed,” he told reporters after a ‘Jom Ngopi KPKT’ dialogue session with the media here today. Read on for the article in malaymail.com

I am pro-development FOR the benefit of the people

If you have read kopiandproperty.com for a while, you will know that I hope everyone will have a place to call their own. Or at least the government would provide housing which is affordable to the needy to ensure they do not have to spend most of their salary on rental or even become homeless. By the way, homelessness is already an issue for many and for those without access to property, then poverty follows.

This is why if I am an owner of an old flat which I have stayed for 30 years for example, I would definitely want an upgrade. Maybe a bigger sized unit, maybe a modern and contemporary unit. However, I do not necessary have the money to do so; buy a bigger and more contemporary unit. However, my old flat is within a block within a very established neighborhood. In other words, people are willing to pay a lot more if there are properties which suits them. A developer can come in and offer something which is win-win-win. Current flat owners get a compensation and also a new unit, future potential buyers get to own a unit in this neighborhood which they wanted and the property developer earns some profits from this venture. This would be one super brief idea for a redevelopment plan.

We cannot hope for charity or ask for the development to be profit-free…

If everything is just too hard to do, then no developer would want to take part. They are able to earn profits elsewhere with less trouble. The government BETTER do not take part because I do not wish for the government to use my tax money to do something they are not familiar and having to spend a lot of my tax money on them or in the end to bail out the project. Meanwhile the old flat owners are also unable to have any potential windfall. Is this what we really want?

Well, if this is, then all the best to everyone. I do not own any such units which could be targeted for re-development and thus, do not benefit even if URA is approved. Just remember to be realistic yeah. We cannot have the cake and eat it too.

Let’s see what happens next month then.

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