Johor’s Rent-to-Own housing scheme needs an update to ensure applicants given more leeway in light of Covid-19 impact

JOHOR BARU: Johor government is urged to review its three-year-old Rent-to-Own (RTO) housing scheme, to take into account the impact of the Covid-19 pandemic on the economy and the people’s earning power.

KGV International Property Consultants (M) Sdn Bhd director Samuel Tan said that in view of Covid-19, more time must be given to tenants to convert their rental properties into homeownership.

He said the number of tenants who did not qualify to buy the RTO houses was likely to increase as many face unemployment, under-employment or threat of losing their livelihoods.

“In light of the current situation, they may not be in the position to buy or finance their purchase.’’

He said it was tough for banks to approve the applications of those who did not qualify.

He noted that while the purpose of the scheme was noble, namely to ensure more Johoreans were able to own houses, the terms and conditions specified earlier might need to be reviewed.

The RTO housing scheme was launched under the Jauhar Prihatin programme through the state-linked company Kumpulan Prasarana Rakyat Johor (KPRJ) back in 2017 but has now been placed under the state’s secretary housing division office.

Tan said the entire process to rent and own under the RTO scheme needed a radical review to reduce the hassle faced by applicants.

“Instead of applying to the state government, applicants should be allowed to apply through the respective developers and these applications can then be submitted to the Housing Division for approval, ’’ he suggested.

He added that by doing this, there would be a proper matching of supply and demand, and the division could then access the applications and decide if they were successful.

Tan said the list of applicants must be updated and before approving any application, a statutory declaration must be made stating that they had met all the criteria set by the state.

“Failing to comply means withdrawal of approval, ’’ he said.

Johor Consumers Movement Association chairman Md Salleh Sadijo said the agency tasked to evaluate the applicant’s suitability for the RTO scheme must ensure they met the guidelines for eligibility, such as having never been a homeowner.

“This can be authenticated through the bank’s database for home loans and also through the Land Office, ’’ he said.

He also urged for a Malaysian Anti-Corruption Commission (MACC) officer to be permanently posted at the agency that processed the applications, to ensure zero irregularity.

Md Salleh said the state government must sign a memorandum of understanding (MoU) with the financial institutions that those eligible for the scheme should be accorded and prioritised to be given the loan for homeownership.

“However, the tenant must have a credible record in meeting the commitments before being eligible for conversion into homeownership.’’

He said in the MoU with the financial institutions, the applicant must show they had been a good tenant for a minimum of five years with no defaults in paying the rent.

Md Salleh said, however, if the banks insisted on their traditional ways of processing loans where specific documents such as business records and income tax returns were required, then the aim of the programme would not be achieved.

In response, state housing and local government committee chairman Ayub Jamil assured that Johor would make it easier for tenants to own houses by improving the RTO scheme and upgrading the online application processes.

“The RTO is tailored to help those who still do not qualify to get housing loans, ’’ he said, adding that the state government was in talks with several banks about changes to the scheme’s implementation and ways to improve it.

Under the present scheme, the state government acquires properties in prime development areas and rents them out for between RM260 and RM600 to tenants.

The tenants can lease the property for five years before buying them from the state government, using the rental already paid as a deposit.

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Rent-to-Own , tenants , housing scheme , banks , deposit , Johor


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