The reality of leasehold and it will not impact to you but too your children unless have extra $$$ .. by the time going expired your kid will be old ..


HOMEOWNERS with a short lease on their properties are urged to take up the Selangor government’s 30% discount offer on the rate of premium for lease extension.

Local Government, Studies and Research Committee chairman Datuk Teng Chang Khim said the discount was for residential properties and must be settled within six months.

Senior citizens who own such leasehold properties in Old Town and Section 10 in Petaling Jaya are keen on the offer but want to appeal to be allowed to pay the amount in instalments, over 30 months, to ease their financial burden.

PJ Old Town resident Mahbob Mahmood, 64, said the 30% discount on renewal of leasehold premium was a good scheme but residents must be given at least 30 months to settle the amount instead of six months.

Pensioner Mahbob Mahmood, 64, said that while the discount offer was a helpful gesture, said people like him would be hard-pressed to pay the amount, which might be quite substantial, in under half a year.

“Many of my neighbours and I intend to use our savings to pay for the renewal of our leases and then settle the balance through monthly payments so that we do not need to take out a loan and it will safe us from the interest payment.

Aries Choo, 61, said a 30-month settlement period would help those with financial constraints.

He added that he had not renewed the lease for his family home.

R. Puganeswary, 38, agreed, saying the extra time would be helpful.

Section 10 Residents’ Association president Ronald Danker is for a longer period of payment for the leasehold premium after the 30 per cent discount.

Section 10 Residents’ Association president Ronald Danker said residents were keen to take up the 30% discount scheme as they could protect their most important asset, their property.

According to Danker, most of the single and double-storey terrace houses in Section 10 have about 53 years lease left.

“The cost of renewing leases has been increasing because the market value of the property has gone up.

“I hope the state government will consider our request for the extended payment as it will take a load off us,” he said.

The discount was first announced in mid-2011.

Councillors and assemblymen have been told to inform affected residents during their ongoing programmes with the public.

Bukit Gasing assemblyman R. Rajiv said he was in favour of the residents’ proposal to increase the time frame to pay the premium.

“At the state assembly, it was said that 765 houseowners in Bukit Gasing had renewed their leases.

“Those who want more time can write to the nearest Land Office and give me a copy of the appeal letter,” he added.

According to Teng, most housing estates in Selangor either fell into freehold or came under the 99-year leasehold category.

R. Puganeswary, 38, said to settle a lump sum payment within six months was too quick and was in support of a 30-months period to make good the lease hold premium payment.

A lease is a contractual agreement entered into by the lessee and lessor (owner) for the use of an asset.

A residential lease, therefore, is an arrangement where the asset is real estate and is used for the purpose of living in.

Teng said a residential lease requires the tenant (lessee) to pay (ground rent) to the landlord (lessor), in this case the state, for the occupation of the property for a term.

The term of the lease refers to the length of it and a lease of 99-years is usually considered a long lease.

Teng said in Selangor, the extension for leasehold properties is governed by the Selangor Land Rules 2003 and Selangor Quarry Rules 2003.

Teng added that the current market value of the house was taken into consideration when calculating the premium and for the 30% discount offered.

“The formula for the calculation of the rate of premium is under Section 7 of the Selangor Land Rules 2003 and Selangor Quarry Rules 2003.

The Selangor Land and Mines Department stated that the valuation of property would be carried out by the district Land Office.



How to calculate

1/4 x 1/100 x Market Value of land (in sq ft) x Number of years to renew x Land area (in sq ft).



Example: 3,000 sq ft house with 10 years remaining on the lease (valued at RM120 psf), the lease renewal fee is –

0.25 x 0.01 x 120 x 89 x 3,000 = RM80,100.

Amount to pay – RM80,100 – (30% discount) = RM56,070.