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