Straightforward process to extend land lease


Leasehold properties in Section 10 Petaling Jaya have 49 years of lease and many are choosing for Option 1 that gives them a 30 discount on the land premium.

HOUSEOWNERS in the Petaling district who want to extend the lease on their property will find the application process easier and smoother, thanks to its district land office.

The land office has designed policies and services to offer concise advice with a step-by-step guide to houseowners giving complete understanding on the documentation needed for the extension of the lease on their property.

Petaling assistant district officer Syafril Idzwan Abdul Khalid said the land office had put in place staff who were well versed with leasehold properties and the documentation needed.

“Application to extend the lease is a straightforward exercise. You do not need to engage a solicitor. Our trained citizen-centric frontline service offers all the advice and notifies the homeowner on the documentation and fees that is required.

“Once the property owner is supplied with the right informa-tion and all queries answered, it allows him or her to take charge of every step. Our staff also give sound advice on Selangor govern-ment’s two options in regards to lease extension,” he added.

A lease is a contractual agreement entered into by the lessee (tenant) and lessor (landowner) for the use of an asset. A residential lease, therefore, is an arrangement where the asset is real estate and is used for the purpose of living in.

Syafril Idzwan said a residential lease required the lessee to pay ground rent to the lessor who, in this case, is the state government, for the occupation of the property for a stipulated term.

The term of the lease refers to the length of it and a lease of 99 years is the maximum. If you have 48 years remaining on your lease, you need only pay for an extension of 51 years.

Rate of the premium is on the land and does not include the house.

Section 10 Residents Association president Ronald Danker (right) and resident John Henry hope the Selangor government will extend the payment period for the leasehold premium after the 30 discount to ease the burden on the people who are mostly senior citizens.
Section 10 Residents Association president Ronald Danker (right) and resident John Henry hope the Selangor government will extend the payment period for the leasehold premium after the 30% discount to ease the burden on the people who are mostly senior citizens.

Syafril Idzwan urged people to use the staff expertise as alternative to paying legal fees of up to RM1,000.

Extension of lease for leasehold properties is governed under Section 197 of the National Land Code (Act 76 – to issue Grant/Demarcation) and Selangor Land Rules 2003.

Syafril Idzwan said the state offered two options.

Option 1 makes the houseowner settle the full rate of premium for the lease extension.

The state gives the homeowner a 30% discount on the rate of premium calculated at current market value and must be settled within six months from the time Form Notice 5A is issued, he said.

Homeowner Wan Zainuddin Wan Mohd Zin, 60, a retiree who lives in Port Garden, Port Klang, wants to extend the lease on his terrace house to benefit from the 30% discount.

“Majority of retirees are keen to take up the 30% discount option to to protect their most important asset, their house. But due to the current market value, the new premium is high and must be settled within six months, it is tough for a pensioner,” he said.

Wan Zainuddin said that his friend had to settle the new premium that added up to RM29,185 and was finding it difficult to come up with the amount.

“The state government should consider an 18-month settlement period to help those with financial constraints. For some, their children are helping with the premium sum but they still need more time,” he said.

Syafril showing the circular by the Selangor government on the 30 discount.
Syafril showing the circular by the Selangor government on the 30% discount.

Another pensioner Ramli Isa, 78, a former crane operator with Port Klang Authority whose house is in Kampung Raja Uda in Port Klang, wants to extend his lease but plans to appeal to the state government for a 30-month settlement period.

Meanwhile, social activist Mohamed Umar Peer said most of the houses in Section 10 of Petaling Jaya had about 48 years lease left and the cost of renewing the lease had been increasing because the market value of the property had gone up.

“Most people want the Selangor government to consider the people’s request for an 18-month extended payment after the 30% discount is given, so that it will not burden us. We can stretch the monthly payments with help from family members,” he added.

The discount was first announced via the State Government Circular PTGS 6/2011.

Syafril Idzwan said Option 2 allowed the owner to pay RM1,000 as extension of lease.

“Taking this option will not allow the owner to resell the property but rights are given to transfer the property to immediate family members be it wife or children.

Under this option, the state will lodge a Registrar Caveat on the property to prevent the owner from selling off the property,” he added.

Syafril Idzwan said when the state introduced the RM1,000 option in 2011, the land office saw about 200 applicants accepting the arrangement and it increased later to about 400 houseowners.

“Of late, we noticed that houseowners who chose to wait and see, have swung to the first option,” he said.

Syafril Idzwan advised homeowners who pick Option 2 to understand that, after the new land title is issued, the owner will not be able to receive the 30% discount, should he or she later plan to sell the house in the open market.

Further to that the houseowner will then have to settle the full premium rate calculated based on the market price at the time.

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