Sittampalam says the lower threshold will help ease the process of redeveloping older buildings.
Petaling Jaya: THE proposal to reduce the resident-consent threshold for en bloc sales from the current 100%, is set to promote urban regeneration.
However, the threshold change should not come at the expense of the rights of the minority, property consultants cautioned.
PPC International Sdn Bhd managing director Datuk Siders Sittampalam says the lower threshold will help ease the process of redeveloping older buildings.
“The good thing is, it allows buildings that are ripe for development to be repurposed.
“However, it should not be at the expense of an individual’s rights,” he tells StarBizWeek.
“En bloc” refers to a procedure where residents collectively agree to sell all of their units in a building to a buyer, who could be an investor or a negotiator from a property developer. At the moment, a potential buyer needs to get the consent from all of the unit owners (100%) for an en bloc sale to proceed.
Siders notes it is sometimes difficult or even impossible to get 100% consent.
“Not everyone may be eager to sell. Some may have been living in that apartment for decades and may not want to give it up. With a lower consent threshold, a person may be forced to give up the property even without consent. In other words, you may be the owner of the land, but you are not guaranteed ownership.”
To facilitate the redevelopment of the strata schemes, the government proposed under Budget 2024 that the resident consent threshold for en-bloc sales will be reduced from 100% to a more consistent level, based on international practice such as in Singapore.
In his speech, Prime Minister Datuk Seri Anwar Ibrahim said this will encourage urban renewal and promote the redevelopment of dilapidated buildings in the city.
In Singapore, an en bloc sale for a development that is less than 10 years requires 90% of its residents to agree. For developments over 10 years old, the approval requirement is 80%.
Property consultants Savills Malaysia Sdn Bhd group managing director Datuk Paul Khong says the proposal under Budget 2024 will facilitate the redevelopment of old strata title schemes that have been long overdue.
“The fact that we were holding on to a 100% consensus makes it almost impossible to redevelop any strata buildings, especially within the city limits. That is why today, all these dilapidated projects are still standing tall.”
