Urban Renewal Bill To Ensure Fairness Benefits For Property Owners

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The Urban Renewal Bill, which is being drafted, is to ensure fair redevelopment that benefits property owners and contributes to economic growth.
Town and Country Planning Department director-general Alias Rameli said the Bill is needed to address the issue of dilapidated buildings, especially in major areas like Kuala Lumpur, Johor Bahru, and Penang.
“We cannot allow buildings that are more than 30 or 50 years old to remain dilapidated in the city centre. Therefore, the ministry through the Planning Department is drafting specific legislation for urban renewal,” he told Bernama.
The Town and Country Planning Department is under the Housing and Local Government Ministry.
Alias said previously, redevelopment guidelines had been introduced, but their implementation did not have legal force and depended on local authorities and relevant agencies.
Therefore, a clear source of authority is needed to coordinate urban redevelopment efforts more systematically.
Town and Country Planning Department director-general Alias RameliAccording to him, a special briefing on the Bill was held in Parliament on Feb 18 and was attended by more than 150 MPs.
Alias stressed that the Bill is not intended to arbitrarily take over properties.
“We do not intend to make this Act a ‘house seizure act’. On the contrary, the main goal is to ensure that urban redevelopment is carried out with the consent of the owners, as well as to add value to their properties,” he said.
Based on records, there are 534 old buildings identified nationwide (excluding Sabah and Sarawak), including 139 sites in Kuala Lumpur which have been listed in the 2040 Structure Plan.
“The estimated gross development value (GDV) for these 139 sites could reach RM355.3 billion, which will contribute to the national economy,” he said.
Consent of the owner
Alias said the Urban Renewal Bill is based on three main principles, namely the consent of the owner, the rights of the original owner, and a clear development period.
He said the consent of the owner is the main basis before a redevelopment project is implemented.
“If there is no consent, development cannot proceed. Currently, Section 57 of the Strata Titles Act 1985 (Act 318) stipulates that 100 percent consent is required for the termination of strata title, but this is difficult to achieve,” he said.
Therefore, the proposed Bill will set a new consent threshold based on the age of the building, where 75 percent consent is required for buildings over 30 years old, 80 percent consent for buildings less than 30 years old and 51 percent for buildings that are unsafe to occupy or are abandoned and derelict.
“The second principle is to ensure the original owner gets a fair return. For example, in Residensi Kerinchi, the original 400 sq ft unit worth around RM70,000 was replaced with a new 800 sq ft unit worth RM450,000.
“The third principle is to ensure a clear development period. The maximum construction period for strata houses is 36 months... therefore, owners involved in the redevelopment must be given comfortable and conducive temporary accommodation,” he said.
The bill also introduces a mechanism for owners who do not agree to the redevelopment.
“If the owners refuse to accept the offer, there are three options: the developer can buy their unit, the government can take the land under the Land Acquisition Act 1960 with appropriate compensation, or they can seek compensation in court,” he said.
Alias said the government would ensure a fair offer element to landowners, based on the concept of “one-to-one” or “not less favourable”, meaning the owner must accept a new unit that is better than the original unit. In addition, developers are not allowed to engage in preliminary negotiations.
Development for economic or public interest purposes is the right of the government to implement, but the right to compensation remains guaranteed under the Constitution and is provided for in the Land Acquisition Act, he said.
“Previously, owners were often approached by various developers offering various packages, which could cause confusion. Through this Bill, the government will play a facilitating role to ensure that owners are not affected,” he said.
Temporary relocation
Asked about the relocation guarantee, Alias said that for temporary relocation, there are developers of calibre and strength in the industry who may have unsold vacant buildings.
“In such cases, developers will relocate temporary owners to locations that are not too far from the original project.
“However, if the adjacent placement cannot be met because their development is not located near an existing project, the developer remains responsible for providing an alternative solution,” he said.
He added that there are developers who allow owners to rent temporary houses in certain locations, where the rental fee will be borne by the developer.
Alias stressed that if this situation does not occur, it is the responsibility of the executive committee at the federal and state levels to ensure that the project is implemented following the offer that was agreed upon by the government.
Therefore, despite the possibility that such issues may arise, there is a regulatory mechanism to ensure that the interests of all parties are protected. The government also has anticipatory measures to deal with such cases effectively, he added.
- Bernama

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