Summary of Why Over 100 S’poreans Are Upset About 99-Year Lease Johor Condos

By
Chew Ming Hui
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More than 100 Singaporeans are currently in a legal dispute with a Malaysian developer over 99-year lease condominiums in Johor.

Here’s a summary of everything you need to know about it.

Over 100 Singaporeans in Legal Dispute With Malaysian Developer Over Johor Condominiums

If you’re a Singaporean looking to buy a property in Malaysia, be it as a retirement home or as an investment, here’s something you should look out for — properties sold under the Private Lease Scheme (PLS).

Huh? Simi is a PLS? PLS here, PLS there, please lah…

When you buy a property under the PLS, you don’t get ownership of the property. Instead, all you’ll get is a lease, and you’ll have limited rights to rent and sell the property.

In other words, when you buy a property under the PLS, you’re sort of just renting the property lah.

And that’s exactly what a large group of Singaporeans have recently found trouble with.

According to CNA, more than 100 Singaporeans are currently engaged in a legal dispute with a Malaysian developer. These Singaporeans had bought properties under the PLS (in other words, they’ve only bought a lease), but believed that they had legal ownership over their properties.

There’s even a WhatsApp group chat, where there are about 170 people in similar predicaments discussing what to do about their properties.

One particular Singaporean, named Sebastian Tan, had bought a three-bedder condominium unit in Johor for about S$275,000. Ordinarily, this would be quite a bargain.

Unfortunately, this wasn’t any other property transaction. Tan had purchased the property under the PLS, meaning that he just paid $275,000 for a 99-year lease.

Paying $275,000 to be a tenant for 99 years, where you can’t even freely rent or sell your property? In Singapore wet market terms, we say that’s quite bo hua.

But here’s the kicker — Tan and all these other Singaporeans engaged in the legal dispute claim that they were not made aware that the property was being sold under the PLS. That’s why they believed that they had ownership over the property.

In response, the developers have argued that the PLS is valid and legitimate, and that the buyers should have been aware of what they were purchasing.

The developers also argued that in any event, the legal period within which the buyers are allowed to commence any legal claims against the developer has already lapsed.

For now, we won’t know what the outcome of the suit is, but one thing’s for certain — the winners are, so far, the lawyers lah. Heng, ong, huat!

The Quirks of a Private Lease Scheme

So, here’s what we know so far about the PLS — when you purchase a property under the PLS, you’re essentially buying a lease instead of ownership over the property. As a lessee, you’ll have limited rights in renting and selling the property.

But how did this concept of a PLS even come about?

The PLS was first introduced in 2012 to prevent foreigners from owning too much land in Johor. In a PLS, there can be up to three parties involved in the property — a landowner, a developer, and the purchaser.

The landowner can usually lease the land to a developer for a certain lease period. During this lease period, the developer has the right to develop and construct, for instance, a condominium on the land.

So, at this point, the landowner still retains ownership of the land, while the developer also only has a lease.

And that’s where the contentious issue lies. Since the developer itself only has a lease, it cannot purport to “sell” ownership. After all, the developer does not have ownership.

Say, Goody Feed’s Blue Cat now wants to purchase a unit in that condominium. In very simple terms, since the developer cannot “sell” legal ownership over the property, Blue Cat cannot buy it either.

So, that’s why under the PLS, Blue Cat will end up with only a lease over the condominium unit.

There’s a lot more confusion surrounding such properties especially because buyers like Blue Cat may sign standard sales and purchase agreements (SPA) instead of lease agreements.

In the case of the Singaporeans who have lodged a suit against the Malaysian developer, there aren’t many details revealed as to whether this landowner-developer-purchaser arrangement was indeed the arrangement that was in place.

But in any event, it seems that the key thing these Singaporeans are contesting is not so much the legality of the PLS, but rather, that they were not made aware that the property was sold under a PLS.

At Least 70 Have Also Filed CEA Complaints Against Real Estate Agency

As savvy Singaporeans, we were raised to do better than merely commencing legal suits. We were also raised to make complaints.

And make complaints, we did.

According to CNA, at least 70 condominium buyers have also filed complaints with Singapore’s Council for Estate Agencies (CEA). These complaints were filed against the real estate agency that marketed the Malaysian property to them.

According to CEA’s website, if there is sufficient evidence substantiating the complainants’ allegations, CEA will take the appropriate action against the relevant estate agents. Such actions could include disciplinary or prosecution action.

It doesn’t go as far as to help Singaporeans figure out what to do with their Johor condominium lease next lah, but hey — it’s better than nothing.

CEA also adds that it generally takes four months to a year to conclude its investigation and evaluation of a case. In other words, we’ll also have to wait and see how CEA decides to deal with the slew of complaints.

So, don’t say Goody Feed buey brother. If you’re looking to buy a property in JB, you now know how to avoid unintentionally buying a property under the PLS.

If you’ve already bought a property in JB, you should probably “double confirm” that you did indeed get the deal you were bargaining for. If not, you know what to do lah — lawsuit or CEA lor.

If you watch at least 10 minutes of brain rot content daily, you must know this:

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Chew Ming Hui
Email: [email protected]