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Wednesday, 23 July 2014

PJ Old Town's converted commercial properties in grey area

Old houses converted into shops in Old Town PJ

Old houses converted into shops in Old Town PJ

PETALING Jaya Old Town was once known as the Effingham Estate, built by the British to deal with overpopulation in Kuala Lumpur.

That was in 1952, when the roads were not tarred, were dusty and layered with stones, and only wooden houses lined the street.

At that time, only about 800 residential houses were built and sold to residents by the British with a 60-year leasehold period.

There were only two main roads, Jalan 1 and Jalan 2, which are now Jalan Templer and Jalan Othman respectively.

Now, over 60 years later, Old Town has been developed into one of the busiest areas in Petaling Jaya, filled with not only residential but also commercial lots.

Section 1 and Section 2 are considered the oldest parts of Petaling Jaya Old Town. The additional buildings here were developed at different times over a span of 10 years after the first 800 units were built.

These various construction dates caused the leasehold expiry period to vary.

While some leases have been renewed, there are still a number of property owners who are finding it tough to do so, especially those who have converted their residential properties into commercial units.

Difficulties in renewing leases

“My lease expired in March and I applied for a renewal in 2012 but I’m still waiting for the approval,” said property owner Tony Chen.

Chen, whose house is in Jalan 23 in Section 2, said he had yet to receive an official letter from the Petaling District Land Office.

Chen, who is currently in his sixties, said his parents moved into the neighbouhood from Perak in the late 1950s and left the house to him and his late brothers.

The house is now occupied by his two sisters-in-law.

“They asked me to help them renew the lease for the house and I initially tried doing so with the state government’s RM1,000 lease renewal scheme,” he said.

Launched in 2011, the Private Residential Ownership Scheme allows owners to renew their 99-year lease for only RM1,000 instead of a hefty six-figure premium.

This scheme, however, is only limited to the owners of residential properties and the rule is that the balance of the premium will have to be paid if the property is sold.

“When I applied for it, the Land Office rejected my application verbally and did not send me a letter so I do not know what the status of my house is now,” said Chen.

He further explained that the Land Office rejected it because his sisters-in-law were selling food outside the house.

This then led the officers to label the property as a commercial property.

“We cannot afford to pay the premium of between RM300,000 and RM500,000 to renew the lease for the house. We are already in our sixties. How can we afford that huge sum of money?” he asked.

He added that his sisters-in-law depended on the income from selling the food as their livelihood, and argued that they only had a small table set up outside their house.

Apart from Chen, there are many other houses in Section 1 and Section 2 that have been turned into commercial lots and run by the elderly, who may not have the means to renew their leases.

Those owners cannot qualify for the RM1,000 renewal scheme although their property is gazetted as a residential property, because they are using it for commercial means.

One of the original old houses in Old Town PJ. - Photos by AZMAN GHANI
One of the original old houses. - Photos by AZMAN GHANI

Commercial lots are seen all around Petaling Jaya Old Town, especially along the main roads and even on one or two nearby streets.

Most of these houses-turned-shops have been operating for over 30 years and they never had a problem renewing their leases until now.

To calculate the lease renewal fee of a commercial property, the formula used is 3/4 multiplied by 1/100 multiplied by current land value (in sq metres) multiplied by tenure of lease and multiplied by area of land (in sq metres).

The minimum tenure of lease is 60 years and the maximum is 99 years. The amount will normally come up to an average of six figures.

If this fee is not paid, the Land Office has the right to evict the residents.

“Those who are running businesses will find it difficult to renew their leases but for residential properties, there will be no problem renewing it with the scheme,” said Old Town Residents Association (RA) president Yap Kian Kiong.

The 50-year-old has been living there since he was born, in the house bought by his grandparents when it was first built.

He explained that even back then, the neighbourhood had some commercial shops among the houses.

“In the past, there were kedai runcits (sundry shops) for people to buy daily necessities.

“It was more for convenience but now there are many rows of shops,” he said.

Yap, who lives at Jalan 27 in Section 2, added that according to the Local Plan, Old Town is still considered a residential area as it has not been gazetted to commercial.

Proposed solutions for the state

Property owners are hoping that the state can help them with the issue by either lowering the premium fee or giving commercial lots the commercial status.

Without the recognition as a commercial property, most of them are finding it hard to renew their leases.

“The Selangor Government should consider their plight and consider offering shorter renewals,” said Bukit Gasing assemblyman R. Rajiv.

He said the state could also look into flexi instalment plans or have a scheme for commercial units similar to the Private Residential Ownership Scheme.

“Most owners in Old Town are in their fifties or sixties — how can they afford to pay?

“Even the bank will not give them loans to pay their six-figure premium to renew their lease,” he added.

If the state does not come up with a solution, there will be more and more businesses in Petaling Jaya Old Town operating on expired leases.

Also, age-old businesses will have to close down as the owners cannot afford to renew the lease.

“I urge the government to look into this matter immediately as there are quite a number of people who are unclear about the whole situation.

“Leases in Petaling Jaya Old Town are also expiring at different times and most have already expired,” said Rajiv.

When contacted, Petaling Jaya City Council’s (MBPJ) one-stop centre (OSC) head Lee Lih Shyan said that some parts of Section 1 and Section 2 in Old Town had been allowed a limited commercial status.

According to the Petaling Jaya Local Plan 1, only certain business activities are allowed under the limited commercial status.

These include small-scale enterprises that do not have high traffic, like art galleries, old folk’s homes, as well as law and accounting firms.

Business activities which are not allowed include car workshops, vehicle showrooms, used-car dealers and eateries.

“Those along the main road of Section 1 and Section 2 such as Jalan Othman and Jalan Pasar have been zoned as limited commercial.

“Activities there are controlled,” he said.

Even so, not all residential turned commercial units have applied for the limited commercial status at MBPJ, he added.

Tags / Keywords: Central Region , Family Community , old , town , pj , lease , expiring


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