Lease Hold Property - Fact Sheet

---PJ residents cannot afford RM100,000 to renew their houses’ leasehold titles:
Most residents of Petaling Jaya Old Town whose property lease is expiring in three to 15 years had a shock when they applied for an extension. The premium now costs them between RM80,000 and RM100,000, compared with RM40,000 four years ago.
---Lease extensions to 99 years
KUALA LUMPUR: State governments can approve applications for renewal or extension of leasehold land for a period of not more than 99 years unless they require the land for public purposes.
Deputy Prime Minister Tan Sri Muhyiddin Yassin said all state governments had agreed to adhere to the new policy.
“The implementation of this policy would fulfill the needs of the rakyat who are worried about losing their land titles,” he told reporters after chairing the 66th National Land Council meeting here yesterday.
He said the policy, which was decided during the meeting, would be used as a guide with several conditions which include:

> leasehold land under the categories “building”, “industrial” or “agriculture” for which owners can apply at any time to extend their lease and are not bound by the remainder of the lease period;
> extension of the new lease is not more than 99 years if the land is not required by the government for public purposes;
> it is subject to imposition of relevant fees;
> the new period of the lease is effective from the date of the registration of the new title;
---Leasehold renewal demystified 19/10/2002 NST-PROP By Eileen Ng

Extension and renewal procedure:
1) Procedures for extending or renewing leases both by developers or individual owners are the same.

2) The extension of leases is governed by Section 197 of the National Land Code 1965, Applying for an extension, the lease must first be surrendered to the state government.

3) To fill in a form called Permohonan Serahbalik dan Mohon Semula Tanah Untuk Tujuan Melanjutkan Tempoh Pajakan (application to surrender and re-alienate land to extend lease duration). Those who want their lease extended can opt for either 60 or 99 years.

4) Together with the form, the owner also has to submit to the land office a certified copy of the land title, which can be obtained from the office’s registration department, a copy of the current year’s quit rent receipt, personal and land particulars, a copy of the latest assessment receipt, two copies of site plans and a copy of the applicant’s identity card.

5) Once received the forms, a settlement officer (SO) will be sent to the area to check on the land status to ensure that it is used only for the approved purpose.

6) The SO and the planner will then prepare a report to be incorporated in a draft paper forwarded to the state exco for approval.

7) whole process is estimated to take about three months.

8) Once approved by the exco, owner required to submit another form, Form 12A, which entails giving back the property to the land administrator for re-alienation.

9) If the application is approved, the land office will issue the “Notice that Land Revenue is Due “ (Form 5A) to the property owner, who will have to pay the premium within three months of the date of the notice.

10) Upon payment of the premium, the land office will get the land title ready and inform the property owner that it is ready for collection.

11) The entire surrendering and re-alienating process takes at least one year due. Hence, property owners to start reapplying for an extension at least two to three years before the lease expires.

12) If the lease has expired, property owners will have no choice but to apply for lease renewal using the Permohonan Pemberimilikan Tanah form (Application for Land Re-alienation). The subsequent procedures are the same as applying for an extension.

13) Once the lease has expired, the property automatically reverts back to the state government and this allows anyone to apply for the land.

“Thus, it is very dangerous to let the lease expire,”
High premiums
The renewal premium charged is based on a formula stipulated in the Selangor Land Rules 1966.

For residential areas, the formula is: 1/2 x 1/100 x land size x market value of property x tenure of lease. It means for 99 yrs tenure = About 50% of market land value.

For commercial and industrial properties, the formula is: 3/4 x 1/100 x market value of property x tenure of lease