Hi,

gt few questions on those highrise building. freehold vs leasehold

1) How long can a new residential highrise apartment/flat/condo last before it is structural unsafe(complete evacuation)?
2) advantage of freehold over leasehold on these building?
3) whats the right of the both owner (freehold and leasehold) if the building become structural unsafe?

Thx

1) It has a lot to do with how the building is maintained. There are many highrise still standing for 60~70 years.
If the reinforced steel bar inside is not exposed, it won't corrode.
Steel doesn't corrode, then it will continue to provide the strength.

2) Make little different, except at latter stage of the property, and normally is irrelevant, as residential leasehold mostly is 99 years, which means beyond one life-span when bought time.
The concern on the property should be more on the location and building quality instead of it is leasehold or freehold.

Both freehold and leasehold property appreciated together when market boom time, in fact if the leasehold is in a more prime location, it can appreciate more than leasehold one.

3) Owners still joint own the land which can rebuild the building or sell off the land for other redevelopment.

Odd question, never ever thought of it before…

1) How long can a new residential highrise apartment/flat/condo last before it is structural unsafe(complete evacuation)?
100 years+ probably.

2) advantage of freehold over leasehold on these building?
The description of freehold or leasehold is normally with reference to the land on which the building sits on.

In gist:-
Freehold land:
- can hold the land in perpetuity
- the selling price may be marked up significantly by the developer.

Leasehold land:
- can hold the land max up to 99 years.
- typically the selling price is cheaper and “normally” the land is located in a strategic area.
- at the expiration of the 99 year term, you will be required to pay a premium in order to renew the leasehold tenure.
- as the tenure reduces over time so does the value of the land.

Can also refer to:-
http://www.hba.org.my/faq/lease_freehold.htm
http://www.malaysianbar.org.my/conveyancin...properties.html

3) whats the right of the both owner (freehold and leasehold) if the building become structural unsafe?
Your rights are the same as before except you can’t move into the condo unit anymore because it is now structurally unsafe. In other words, that unit you own will be a complete write-off.

Nevertheless, most condominiums nowadays purchase insurance to cover the building. You won’t get back full value of the consideration which you dispensed to purchase the condo but it will help in getting back up on your feet.

Thanks for all the info and rpy..

ya. Agent told me that there will be no differences for highrise freehold n leasehold.
Then I recall the sad highland tower incident. Since the land is "share" among all units, I think that It will b hard for sell and redevelopment. So,I was wondering what is the advantage of freehold and is that worth for paying extra price in freehold.

Thats y the question pop up in my mind.

thx agn for the info sharing..

You need to separate the building issue with your land issue

Sixceylon Condominium was formerly known as Bolton Court and was developed in the late 1970s. This building is already close to 50 years.
Building lifespan totally depend on the construction material/engineering.
What kill a building much faster is the maintenance and tenant mix. Structure itself will stand very long.


MainPlace USJ was abandon for a good 20years before it was finally revive and completed.


As for your land, the only difference between freehold and leasehold is that leasehold land need to be renew, which means someone will have to fork out extra money to renew the lease.
Very rare (in Malaysia history, YET to have happen) it will not be renew.

Your largest issue with leasehold land is that bank will not lend to leasehold with less than 60 years lease since a typical loan is 30 years, you finish paying the loan then the land would only have 30 years left. Bank is not going to fork out money to renew it ... who is going to do it ? Your potential buyer wont fork out the money either.

More disturbingly, everyone in the building need to fork out money, you cannot go to the land office and tell them to only renew your share of the lease.

Your biggest enemy is BANK and not the land office, if you do not plan to sell the Condo, it make no difference, you be long dead by the time 99 years arrive.
If you plan to sell, your buyer loan will be rejected like stupid for anything that don't show 70 years and above.