The Legal Implications of a Sale of Property by the Malaysian Developers under the Private Lease Scheme: In two minds?

Abstract

This paper aims to evaluate the legal implications of the private lease scheme (PLS) for a property sale by the developers. It mainly relies on statutes and court cases as its primary sources of information. PLS is selling a lease to purchasers by the developers. If purchasers were misled to believe a property is purchased and not the purchase of the lease, it is considered misrepresentation. An amendment to the law is timely to cater for a scheme that may address a different legal status of the purchaser. Australia introduced a certificate of lease to enhance the security of tenure. Keywords:: Private Lease Scheme; Developer; Cetificate of lease; Misrepresentation. eISSN: 2398-4287© 2021. The Authors. Published for AMER ABRA cE-Bs by e-International Publishing House, Ltd., UK. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer–review under responsibility of AMER (Association of Malaysian Environment-Behaviour Researchers), ABRA (Association of Behavioural Researchers on Asians/Africans/Arabians) and cE-Bs (Centre for Environment-Behaviour Studies), Faculty of Architecture, Planning & Surveying, Universiti Teknologi MARA, Malaysia. DOI: https://doi.org/10.21834/ebpj.v6i17.2867

Practicalities of Strata Lease Schemes in Malaysia

“…The private lease schemes were once proposed to cater to the need for development strata schemes in Medini, Johor. The studies by Abu Bakar et al (2021) and Mohsin et al (2020) tell the ideology of creating a private lease scheme in Medini, but this concept was only a vision of how Medini's development should be. In reality, no legislation exists regarding the private lease scheme, and there was no actual implementation of the private lease concept.…”

“…Currently, Medini's development uses the same concept of strata lease scheme similar to Penang. Abu Bakar et al (2021) study elaborated on the legal framework under the National Land Code 1965; however, it was never mentioned how the National Land Code 1965 framework of lease works and connects with other legislation that supports the concept of private lease scheme. Both Bakar et al (2021) & Mohsin et al (2020 study suggested creating new laws for private lease schemes.…”

“…Abu Bakar et al (2021) study elaborated on the legal framework under the National Land Code 1965; however, it was never mentioned how the National Land Code 1965 framework of lease works and connects with other legislation that supports the concept of private lease scheme. Both Bakar et al (2021) & Mohsin et al (2020 study suggested creating new laws for private lease schemes. This gap has given a reason why this study should cross-reference other Malaysia's legislation to set up a complete legal framework that may sustain the concept of the strata lease scheme or the introduction of the private lease scheme ideology.…”

A Case Study of Strata Lease Schemes in Malaysia: Features and Uniqueness

“…Among scholars, there are differences in naming a lease scheme. Zainal et al (2022) defined it as strata lease scheme, Zamri (2019) and Abu Bakar et al (2021) called it a private lease scheme, while Mohsin et al (2020) and Zainuddin et al (2022) describe it as a strata private lease scheme. Different names but has the same requirement for registration; to ensure the dealing between the lessee and the lessor is secured.…”

“…Zainuddin et al (2022) describe a strata private lease scheme as a strata building that uses a private leasing mechanism in land dealing by Malaysian real estate industry players. Abu Bakar et al (2021) explain that the private lease scheme was proposed in the state of Johor to lease freehold land to buyers for the price paid by buyers. While Mohsin et al (2020) tells the strata private lease scheme mechanism in the state of Johor is a registration mechanism implemented on the stratified building.…”