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Review leasehold tenure
NST 01/06/2006
RECENT concerns voiced in Sarawak over the renewal of land titles highlight
the urgent need for a review of the present system of land tenure.
Leaseholds for 99 years, 60 years, or 30 years are a colonial legacy. Their
original purpose in Britain was to secure a long-term rental income for the
freeholder. In practice, inflation renders this worthless.
Town planners have embraced leaseholds as a tool for controlling land use,
but local planning provisions can better serve this purpose.
Planners have also seen value in having large areas of leaseholds all
expiring simultaneously thus ultimately enabling large-scale redevelopment
simply and cheaply. This is a fantasy.
While in theory, leasehold land reverts to the state upon expiry (with no
compensation to the leaseholder), in practice, this would be manifestly
unfair and politically unwise.
Indeed, the National Land Code already provides for the renewal of such
leases. The problem is that the provisions are not clear, they are
incomplete and their application has become somewhat arbitrary and
piecemeal. Moreover, they do not go far enough. The most an owner of
leasehold property can hope for is a fresh lease.
Britain has long since reformed leasehold tenure and given leaseholders very
explicit rights of "enfranchisement" whereby they can buy back their land at
a price set by a given formula.
This is long overdue in Malaysia. By passing such legislation, everybody
wins.
Leaseholders will substantially enhance the value of their properties. When
renovating or improving their properties they can take a long-term view.
They have a valuable inheritance to pass down the generations.
At the same time, the State Governments will receive substantial cash flow
from "leasehold to freehold" premiums.
It is high time state authorities realised that there is no point in holding
onto freehold reversions. An orderly and transparent system for selling them
to the respective leaseholders would be a wise and popular move.
CHRISTOPHER BOYD, Petaling Jaya |
