Kg Baru redevelopment has landowners on tenterhooks

COMMENT | Many landowners in Kampung Baru, Kuala Lumpur, have contacted this writer to ask a few questions with regard to the government's proposal to develop their land.

It appears that most of them are unsure of what is in store for them and uncertain about the advantages and disadvantages of the proposed development plan.

Among the questions lingering in their minds are where they would be relocated and what would happen to the businesses they are currently operating on their property.

Those property owners who are renting out their houses in Kampung Baru to others are also concerned. They are worried that the land they had bought at a certain price would be sold to investors at prices higher than the market rates.

And, if condominiums are developed on their land, can the Malays afford to purchase them? It can be said that many questions are haunting them and making them feel anxious and uneasy.

When Kampung Baru landowners recall what they had experienced in the past, they feel a sense of dread and fear. This is because they have been cheated several times by developers who persuaded them to enter into joint-venture deals to develop their land. They, however, ended up losing their land grants when the ventures failed to take off and the developers disappeared.

Meanwhile, there are also landowners in Kampung Baru who are smiling broadly. It looks like their prayers and hopes are becoming a reality. They are confident that the redevelopment of their land planned way back in 1991 will be finalised this time.

In 1991, there was news that their land would be acquired and that they would be compensated fairly. Later, the government cancelled the plan, citing the high development cost as the reason for doing so.

Now news has cropped up that the government plans to acquire their land at a fair price. Some say that their land would be valued at RM1,000 psf (0.093 sq m).

If this is the case, a landowner possessing a 7,000-sq ft (650.3-sq m) lot will be paid RM7 million. These landowners are now busy designing their future plans.

For the redevelopment of Kampung Baru, the land's selling price will be determined through direct negotiations between the government and the landowners. There are reports that a hefty RM10 billion has been allocated as payment for the land.

Direct price negotiations mean the landowners can submit their offer price to the government for consideration. During negotiations, the seller and buyer will come to an agreement on the market price, after which the transaction will take place.

However, this neoclassic negotiation approach - which emerged post the Second World War where demand and supply factors determined prices - is not suited to current times, more so when landowners do not have a clear understanding of the property market.

As such, Kampung Baru landowners should be given the opportunity to appoint their own professional agent to conduct price negotiations on their behalf.

In the event the direct negotiations between the landowners and government do not pan out, the latter can acquire their land as per provisions under the Land Acquisition Land 1960. This Act allows the government to acquire from private landowners land which is required for any public purpose or economic development.

When it comes to compulsory acquisition, landowners will be paid adequate compensation which will take into consideration the land value and related costs.

For the convenience of landowners, the government allows them to appoint a private valuer to prepare a valuation report for their property.

If the landowners disagree with the compensation amount, they can take the matter to the court, which will determine the final value of the compensation.

Landowners in Kampung Baru must equip themselves with the necessary knowledge, particularly with regard to the price and market value of their land.

The value of land in Kampung Baru is determined by open market value. The market value is influenced by many factors, including the type of landholding.

Kampung Baru land was classified as Malay Agricultural Settlement (MAS) land under the Malay Agricultural Settlement (Kuala Lumpur) Regulations 1950, which was amended in 1954.

The valuation of Kampung Baru MAS land is different from that of land outside the settlement in the Jalan Chow Kit area.

Besides finalising the market price during the direct negotiation process, the seller and buyer must also resolve land administrative issues if there are any.

Wakaf town concept

The bulk of MAS land has multiple owners or overlapping ownership. In the case of a number of land lots over there, issues related to inheritance are still pending.

It will take time and money to resolve these matters unless the government arranges for the land administrative issues to be settled in an organised and efficient manner.

In Kampung Baru, there are also about 100 lots without owners, so land acquisition is one of the alternatives for the government. Perhaps, a land administrative or real estate consultant can help to resolve these problems.

Most of the landowners in Kampung Baru want to maintain their landholdings as they don't want it to go into the hands of non-Malays. They are, however, not opposed to any development plan proposed by the government.

Therefore, one of the best alternatives for developing the land there is the wakaf town concept. Since wakaf land cannot be sold or bought, wakaf properties can serve as the stronghold, saviour and protector of the Muslim community.

No matter what transpires, Kampung Baru landowners have to boldly face any eventuality and it is in their best interest to brush up their knowledge on their property.

The government, on its part, has to be more rational when making opportunities available so that the redevelopment of Kampung Baru will leave everyone satisfied and in a win-win situation.

- Bernama

The writer is the president of Land Professionals Association of Malaysia and senior lecturer in real estate management at Universiti Tun Hussein Onn Malaysia.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.