An aerial view of Petaling Jaya Old Town, which was first developed in the 1950s following the rapid growth of Kuala Lumpur. — Photos: YAP CHEE HONG and IZZRAFIQ ALIAS/The Star
ANDREW Sin’s father-in-law bought a commercial property in Petaling Jaya Old Town in the mid-1960s.
The 20ft x 80ft shophouse on Jalan Othman has a 60-year lease, like many other buildings located in the city’s oldest township.
Sin is now facing sleepless nights trying to extend the lease on his property.
“Two years ago, I applied for an extension from the Petaling District and Land Office.
“Imagine my shock when told the premium was almost RM1mil.
“Where am I going to find that kind of money to pay the premium?
“I am just an old man trying to make ends meet.
“My medication bills alone consume a significant portion of what I make from renting out the property,” he said.
Sin’s father-in-law bought the Jalan Othman shophouse in the 1960s.
The exact amount Sin has to fork out to renew his lease is RM952,253.
According to him, his property is only worth RM1.5mil at current market price.
He said the premium fee of almost a million ringgit made his property practically worthless.
“Who would buy it now? And at my age, which bank is going to give me a loan?” he asked.
About 150 shophouse owners in PJ Old Town are facing a similar dilemma.
Many leases in the area are due to expire in the next few years, as the owners were only given 30- to 60-year terms.
Like Sin, these seniors are not willing to renovate or redevelop their properties as they feel it is just not worth it.
The leases of about 150 shophouses on Jalan Othman are about to expire in the next few years.
StarMetro recently reported that Selangor Mentri Besar Datuk Seri Amirudin Shari was exploring ways to make leasehold land extensions more affordable.
Amirudin acknowledged the difficulties faced by commercial property owners in extending leases, due to the high premium which is based on current market value, especially in areas like the older part of Petaling Jaya.
“The state is aware of the issue and is working on a formula.
“Any policy implemented will set a precedent, so we must proceed carefully,” he said in response to Dusun Tua assemblyman Datuk Johan Abd Aziz during the recent Selangor State Assembly sitting.
Amirudin also advised property owners to start the leasehold extension process early, as it could be time-consuming.
“Do not wait until the end of the period,” he added.
Shorter leases
Some property owners have sought an alternative solution; instead of renewing the lease for another 99 years, they applied to seek a reduced lease period of 60 years.
This resulted in the premium being cut and in Sin’s case, it went down from RM952,235 to RM567,349. But Sin said it was still unaffordable.
Another property owner was charged RM463,734 for a 60-year renewal.
Property owners interviewed by StarMetro said they were only given six months to pay up before the 60-year renewal offer lapsed.
“I simply cannot afford to pay within six months or even if they give me an extension,” said a shophouse owner who did not want to be identified.
Owners can apply to renew their leases anytime before it expires.
The extended lease would start from the year it was renewed and not when it was due to expire.
Across the road, Liew Seong Loong runs the 70-year-old Sang Hup Hardware & Sons that his father started in 1954.
“My family has been operating in this shop for seven decades.
“There are only three years left on our lease, and yes we are worried.
“Business has not been good for some time,” Liew said, lamenting that the popularity of online shopping and franchise stores had been eating into their profits.
Liew runs a 70-year-old hardware shop that was started by his father in 1954.
Liew is concerned about the high premium required to renew the lease.
Going by current rates, he said he could not afford to pay the fee.
“If I am unable to renew the lease, the property’s value will decrease significantly, making it difficult to sell or use it as collateral for a bank loan,” he added.
The shorter the lease period, the more value it loses.
Many owners are holding off on applying for an extension until they receive further information from Selangor government.
Tee King Koon, 76, has been renting his property on Jalan Othman to a bank. His lease is due to expire in three years.
Tee is keeping his lease renewal on hold while waiting for the state government’s decision.
“I am currently gathering information before making a decision,” he said.
The owner of Starlight Foto Studio, a family business that has been operating for 66 years at No.68, Jalan Othman, decided to extend the lease even though she felt the cost was excessive.
Chin Mui Hua, 66, had three years left on the lease.
“We were worried and did not want to take any chances.’’
She decide to pay the nearly RM1mil premium so that she and her family could continue working.
Starlight Foto Studio’s Chin decided to pay the premium of almost RM1mil rather than lose their shop.
“We have been here for decades, and were afraid that we might lose our property and not be able to work anymore,” added Chin.
Two years ago, the shopowners approached National House Buyers Association (HBA) honorary secretary-general Datuk Chang Kim Loong for help.
Chang prepared a memorandum which was submitted to Bukit Gasing assemblyman Rajiv Rishyakaran and Petaling Jaya MP Lee Chean Chung.
When contacted, Lee said the state government had yet to make its final decision.
“I urge the state authority to update the property owners on the progress from time to time, so that the latter can plan their next course of action,” he added.
Meanwhile, the shopowners continue to hope that Selangor government will throw them a lifeline soon.
