Hi all,

I've been meaning to find out, but no one seems to have an answer given that it probably hasn't happened in Malaysia yet.

But, what happens when a leasehold of a condominium or apartment ends? Unlike a landed property where you can renew your lease, what of if certain units in a condominium do and certain do not?

Then again, I suppose the same problem would occur for a lot of landed properties like terraced and link houses.

Pandemonium to ensue?

All comments are appreciated

When a 99 yrs lease run out...the building probably be condemned and need to tear down and rebuild....
The piping, the wiring all no good already.

When lease expires, government takes back. Government might give you option to extend but it is not your right. What pandemonium? There is no pandemonium.

the pandemonium happens when 1/2 the owners want to pay to renew and the rest don't want. cue lots of shouting, scratching of cars , and etc.

It is not tested in malaysia, but from what happened in singapore , u can either

1) if very well maintained, owners can top up the lease if state government no issue with that but that would require almost 100% owners agree to pay their portion and agree to the top up formula. To me sound like impossible in malaysia.

2) en bloc sales to developer, in hk & singapore u need only 70% and 80% owners respectively to trigger mandatory force sale. In malaysia , u need 100% owners agree to it. Although the government has plan to amend legislature to ease the process of en bloc, i wouldnt bet on it. If i m developer , i would question the effort to acquire leasehold condo enbloc i.e to get state government consent , bumi units owners, surrender lease, top up lease etc.

Conclusion is as owner of old leasehold condo , at this moment u should probably not have any expectation other than zero scrap value of the land.

Thanks for the explanation!

Just my concern, after the end of lease period, will an old condo still safe?

In my personal opinion and Malaysian style and culture, by the time the condo reaches 99 years. The building will be unfit to be occupied already. Developers will setup and a building management entity for the first few years and then normally pass to local resident committee to manage it and these people are not professionals. Even though they can engage a third party professionals to manage the building but when comes to decision making and money matters all hell broke loose. Then start the story of cutting cost here and there. Paying this and that which which may or may not exist, etc.

This post has been edited by VOOSH: Apr 16 2016, 06:51 AM

Curious, since it's leasehold land why wouldn't developer wait till government took it back then approach state gov to propose to buy it? Easier, simpler, faster since can be done with new lease altogether, and probably cheaper since they can bribe the MB

How many are willing to stay at their grandparents place? How many condo is still desirable after 30 or 50 years?


This post has been edited by icemanfx: Apr 16 2016, 09:14 AM

So how? State Gov "force take back" the condo?

99 years later, price increase... my cucu cici will sell out to developers ....hahaha

if the leasehold condominium will be unfit for future stay when it reached the leasehold period, how about those freehold?

Don't the same issue will apply? So what is the advantage of getting a freehold than a leasehold if both need to be re-build, except the free "land" in the air?

For what amount of lease yrs you looking at?

If 99 years, why u worry? U will be long dead.

If 60 years or less, unless u are 20yrs old and below. U probably be dead too.

I have no idea why freehold and leasehold a concern other then upon transfer freehold takes about 3 mths, leasehold about 6mths. Freehold typically 10-20% cheaper then leasehold.

Can sell the unit to developers after 99 yrs?
If developer dont want to buy + cannot be renewed / extension the leasing period, the property will be "worthless"?

Freehold cheaper?? Why?

oops....sorry, leasehold 10-20% cheaper then freehold.....hahahah

Maybe because freehold has better appreciation and higher resales value? Ppl need no worry the land or building to be taken by government when the lease end.

Yah I don't really care much as I would be long gone by the time the lease ends.

Just buy and enjoy the stay / making money (rents, etc).

Doesn't not matter what happens after 99 years, bcos:
1. The condo will not look like a condo any more.
2. Some developer/agent will offer to buy-out the condo long before the 99 years lease ends (eg: Desa Kudalari in KLCC) and owners will get a lot of moolah which they will never say no to.
3. The first few owners will be long dead already.

This post has been edited by kamilnu: Apr 25 2016, 10:44 AM

Its a condo. Land title does not matter much. Its strata.

Like others say, 99 years later, the value of your condo is zero as due to not suitable for staying. Gov also won't need to pay you anything as the land will no longer belongs to you as well as the units on top of the land.

So, at least for freehold, the land still there and still can sell. Lolz..

strata title means a portion of the land your condo sits on is yours...deswai if wanna renew lease need 100% of owners..each owner have a say as its their land oso.

plus landed props are easier to acquire as the demolition is really cheap..lolz..highrise much more complicated and costly to do lehh

leasehold strata title oso land still there and can be sold..lolz

for strata development, ownership is thru strata title which derived from a demarcation of plot in the land parcel of your strata property. layman term, the land are divided into tiny plots by the land office and assigned to u on the strata title. bigger unit share thus u own bigger portion of land.

well explained.. thanks man

Well... like others say, leasehold land is not for sale but for lease bro..

building will depreciate while land will appreciate, that's why the yield of high rise is usually higher than landed, to compensate for the depreciation

so u pay lease to bank is it when u buy prop on LH?

I think you forgot... after 99 years, leasehold land no longer belongs to you.. No actually the land is not yours anyway... You need to renew the lease, means pay for the land rental lar...

This post has been edited by JustNobody: Apr 25 2016, 03:13 PM

its time to search for freehold

will the developer that build the project sustain 100 years business in this market? you thought every business like COCA-COLA meh..?

Ok I got a different answer:

After 99 years:

Freehold = U still own part of the land (even if condo must be demolished, future developer buy from u)

Leasehold = U just pay RMxxxK to rent from gov for 99 years. After that the land belongs to gov. Gov may choose to renew your leasehold. But if not then, developer can just wait for it to expire and then buy from gov to develop the land. As for u, remember u just a 99 years tenant. After it expires u don't get peanuts.

(Just imagine u sign a 1 year tenancy agreement with landlord, where by u are the tenant, gov is the landlord, the 1 year is 99 years).

This post has been edited by VOOSH: Apr 27 2016, 02:23 PM

As for your 2nd point it only applies to freehold land title (Desa Kudalari is freehold), because each owner owns a tiny bit of the land. If the goverment changes the law that says only super majority is required to take over the land and redevelop (now 100%), then freehold condo owners has a lot to gain. However leasehold sorry, you don't own anything, coz you're just leasing the land your condo built on technically!

This post has been edited by value_investor: Apr 27 2016, 03:43 PM

All the props in China only 70yrs leasehold, why many of them still not able afford it?

Renew the title .
Pj old town the owner are renewing the title

On this same subject, what is the typical design life assumed by developers when they design a condo?

I doubt the building is built to last longer than 40 years right? Would be really great if someone from the property design field could answer this.

99 years doesn't seem like a realistic timeframe.

Concrete lasts FOREVER.

Found an article on this.

https://www.linkedin.com/pulse/how-long-doe...rprises-housing

Concrete lasts FOREVER. Shoddy bolehland workmanship don't.

What the name of the condo?

maybe because you want to pass on your ownership to the next generation and beyond??

wtf?? 40 years? lol...

more than that la.. technically, if maintained, it can last forever. Even form works can be fixed.. just depends on the cost only.

Stratified Leasehold Residential: (Kuala Lumpur)

Addressing a few comments from this thread.

1. Developer’s responsibility:

There is no responsibility for the developer to renew the lease back to 99 years before HOVP (Delivery). This is because the Sales & Purchase Agreement (SPA) signed by the purchasers will state the remaining years or expiry of the lease. Meaning the purchasers are aware and have agreed.

However, most developers will renew the lease prior to delivery of vacant possession for the simple reason of selling the property for a higher value or if the lease remaining is close to 50 years (banks will be reluctant to finance)

Less renewal will be done via Master title (land) prior to the strata titles being issued (upon completion), meaning that upon delivery, you should have very close to 99 years left.

2. How to renew lease of Strata Titles (individual owners)

The main factor for renewal of lease will be driven by financing. Meaning Banks will start to become reluctant to finance the purchase (subsale) of leasehold strata properties with 40-50 years left on the lease (depending on the bank).

Therefore when the lease remaining is less than 50 years, owners will want to extend their lease.

According to PTGWKL to process to renew lease is as follows:
The estimated premium is as follows and based on the method of calculations as outlined in by Amended Rules 2023 by PTGWPKL:

For residential building: 1/16 x value of land x 1/99 x (term of new lease – balance remaining)

The interesting thing here is that the Land value for a stratified building (or the master title) will largely remain unaffected, meaning over 50 years, the land value should only increase by 2-3%. This is a small fraction of the increase in value the individual units or strata titles will increase in value.

Once you do the calculations on a future scenario, the renewal from 45 years remaining back to 99 years, is a tiny fraction of the value of the unit, usually much less than 1% of the value, per unit.

The method for apportionment is via Share Units. Total renewal could be RM 8 million on master title, divided by the total share units in the development. Then each owner will need to pay for the number of share units he owns, could work out to be RM50k (or much less than 1% of the value of the unit)

The process to renew requires an AGM and resolution via vote to renew. If the Management Corporation (MC) is any good, they will have planned in advance for this, and probably started collection from owners years in advance (to ease the burden).

There is risk that some owners may be unwilling to pay when the time comes, but with good planning this can be mitigated.

Hope this answer helps.

you will lost the house, no compensation whereas the land will return to the goverment.

In quick note Freehold is an asset while leasehold you are renting the land from the government

Your children/grandchildren might not stay but the least it will become an asset for freehold title

The property price will be better on freehold than leasehold in long run and higher demand on freehold

This post has been edited by Azury36: Dec 14 2023, 10:35 AM