Gerakan In The News

Review parcel quit rent policy, Penang govt urged

Aug 6, 2020

GEORGE TOWN: Gerakan vice-president Baljit Singh today urged the Penang government to reconsider the implementation of the parcel quit rent on stratified buildings, as it is borderline “profiteering” and causes hardship for the poor.

Saying the quit rent rates had increased “by many folds” under the new system. he called on the government to revert to the earlier, cheaper rates.

The Penang government had previously said the new parcel quit rent was “very minimal” and based on rates already in place since 1994.

In a statement, Baljit gave an example of a five-storey commercial building in Pulau Tikus, where owners used to pay RM3,295 in quit rent before the new system was introduced.

“The same building has now seen the state government billing each parcel owner RM2.58 per m² for their units and collecting more than RM12,000 for the same land, after deducting the common area. One owner who used to pay RM62 for his 89m² office is now paying RM230.

“This policy shows the state government is profiteering tremendously,” he said.

Baljit said low-cost apartment dwellers had also been impacted by this ruling.

Owners of Rifle Range Flats, the government flats for the poor, who previously did not have to pay quit rent were now subjected to parcel quit rent of RM25 per unit and this had affected 3,699 owners there, he said.

“This is in great contrast to the situation in Kuala Lumpur where the B40 group seems to be more fortunate as the quit rent for low-cost and people’s housing project flats are RM15 for leasehold titles and RM20 for freehold titles, irrespective of the size of the units.

“Penang is home to hundreds of high-rise buildings, many of which contain residential dwellings. We are still in the midst of the Covid-19 pandemic and many jobs have been lost, salaries reduced and most people are living in a state of uncertainty.

“It is timely for the Penang authorities to review the parcel rent policy and lessen the burden experienced by most of the people,” he said.

Since Jan 1, 2019, Penang had migrated from the old quit rent system to the parcel quit rent system for stratified properties.

The system follows the requirement of a federal law concerning stratified properties and will help to prevent mismanagement and overcharging of quit rent by joint management bodies (JMBs) and management corporations (MCs).

Under the old system, the quit rent was calculated based on the size of the mother title or main lot, and the burden of paying quit rent was shared among the occupants of the entire apartment block.

The quit rent was calculated by the respective JMBs and MCs and payable directly to them. It was included in the owners’ maintenance fees.

Under the parcel quit rent system, each owner pays directly to the respective district land office.

There have been concerns that the rates will be much higher as they will be calculated based on each unit’s floor space, compared with the burden-sharing system earlier on.

Chief minister Chow Kon Yeow had said that under the new system, authorities were expected to collect RM11.1 million in rent compared with about RM5 million previously.

There were 227,874 units with strata titles in 1,836 housing schemes in the state as of December 2019.