Legal focus on gated schemes
New Straits Times 15/4/2006

A move to incorporate gated-and-guarded housing schemes into the Strata Title Act 1985 to give them legislative context is on the cards.

Minister for Natural Resources and Environment Datuk Seri Azmi Khalid, whose ministry is responsible for issues concerning land, is scheduled to meet senior council members of the Real Estate and Housing Developers’ Association (Rehda) to discuss the matter next week.

This meeting followed a closed-door discussion between Azmi and Rehda officials led by its president, Datuk Jeffrey Ng, after Azmi opened the Malaysia Property Expo 2006 (Mapex) in Kuala Lumpur last week.

According to an informed source, Azmi asked developers to show how gated communities operate in countries that also practise the Torrens system of land administration, such as Singapore and Hong Kong.

Currently, the Strata Title Act does not make any provision for gated housing schemes, which require the subdivision of a parcel of land into lots and common property - as is done with apartments and condominiums – so owners can be issued with individual titles.

Developers keen to emulate the successes of gated schemes in Selangor such as Wangsa Baiduri in Subang, as well as Sierramas in Sungai Buloh and Country Heights in Kajang, have faced great difficulty in getting approvals because the law currently does not permit the issuance of horizontal strata titles for terrace houses, semi-dees and bungalows.

Because of this, existing gated communities now operate on a contractual relationship between the developer and buyers, with the terms spelt out in the Sale and Purchase Agreements as well as in separate Deeds of Mutual Covenants entered into between the parties.

Should amendments be made to the Act, gated communities could be regulated and managed in a manner similar to how condos are run.

In his speech at the opening of Mapex at the Putra World Trade Centre, Ng said homeowners in gated housing schemes are “in a quandary over land titles as the Strata Title Act does not support horizontal strata developments”.

He called for the law to be amended to accommodate existing schemes, and for “completely new legislation to be enacted” to cater to future projects adopting the same development concept.

“New gated communities are sprouting up across the nation as testimony to the strong demand by house buyers for secured housing concepts,” Ng said, adding that international insurance companies have also issued directives disallowing insurance policies for expatriates who do not reside in a gated scheme.

“Developers embarked on this housing concept based on initial assurances from the relevant authorities that appropriate legislative amendments would follow,” he said.

“Approvals given by planning authorities and the Ministry of Housing and Local Government also gave rise to the belief and expectation that the issuance of individual strata titles for these developments would be a matter of course … unfortunately this has not materialised, despite urgent representation by Rehda and related professional bodies.”

The country’s legal framework, he added, was hampering the property development industry.

While innovative developers had consistently introduced new concepts and ideas to housing, he said it was unfortunate that the legal framework in support of such progress was lagging behind, creating great obstacles for developers, financial institutions and house buyers.