THE National House Buyers Association’s (HBA) honorary secretary-general Datuk Chang Kim Loong says there are several ways to help Petaling Jaya Old Town shopowners to resolve the high premium fee in extending their leasehold titles.

“Shopowners initially approached me in 2022, and we established a PJ Old Town Shop Owners pro-tem committee to address this issue,” he said.

“Some of the owners also wrote to the Selangor Mentri Besar in March, appealing for a reduction in the land premium imposed.

“Some of their deadlines to renew have expired, while for others it is fast approaching.

“Normally, the Petaling District and Land Office allows up to six months for property owners to pay; otherwise, the opportunity lapses.

“The owners are hoping that the deadline will be extended indefinitely, pending the Selangor government’s decision,” he said.

He added that he had prepared a memorandum which was submitted to Bukit Gasing assemblyman Rajiv Rishyakaran and Petaling Jaya MP Lee Chean Chung.

In the memorandum, Chang gave two suggestions for the state government to calculate the premium.

The first being a premium equivalent to 20% of the property’s market value, to emulate the initiative offered by Penang government.

For example, if it is valued at RM1mil, the premium will be RM200,000, making it more affordable for property owners.

The second option draws from a 2011 initiative by the late Selangor mentri besar Tan Sri Abdul Khalid Ibrahim, which allowed residents to renew land leases for RM1,000.

Given this precedent, Chang suggested a similar approach for commercial properties in PJ Old Town, proposing a nominal fee like RM5,000 for a 99-year lease renewal.

This approach, he said, would align with existing policies for residential properties and support the local economy by alleviating the financial burden on small business owners, many of whom are elderly.

He pointed out that PJ Old Town was the earliest development area in Petaling Jaya, primarily driven by spillover from Kuala Lumpur.

“Given that it is a mature neighbourhood, new development is rare.

“Most involve individual home renovations rather than major projects.

“The lack of development in PJ Old Town is related to the number of years remaining on the lease of property owners.

“Some plots have up to eight owners as they inherited the property,” he noted.

Chang has also proposed that applications for lease extensions, which are still pending at the land office or have received “Borang 5A” (Notice of Premium), be kept in abeyance or automatically extended pending a final decision by Selangor government.

According to the Hansard records of the Selangor State Assembly on July 4, 2024, the Mentri Besar stated that a formula for affordable premiums would be established by the end of the year or early next year.

Lawyer Derek Fernandez, who was involved in the formulation with Abdul Khalid in 2011 for the extension of residential leases, said the government should consider the plight of PJ Old Town property owners and adjust the formula being used to calculate the premium. (See chart).

“They can set the formula lower, or can use the same mechanism that had been used for residential leases, namely allowing owner-occupiers to extend the lease for a nominal amount.

“But this is on condition the owners don’t sell the property within a period of, say, 10 years.

“If they sell, then they have to pay the premium which will be assessed at the point of sale.

“But if they continue to own and use the property without selling it, no additional premium will be charged.

“This approach mirrors the residential lease extension model, providing flexibility based on their financial situation,” Fernandez added.