‘Define mixed development'

The Star

17-05-2025

PETALING JAYA: Consumers and stakeholders have called for the proposed Real Property Development Act (RPDA) to clearly define what constitutes mixed development, which currently lacks protection under the law.
Voicing their support for the government's proposal to introduce the RPDA, they say it is a long-overdue effort to protect buyers of commercial and mixed-use properties.
They said mixed developments such as retail, commercial, small office/home office (Soho), small office/flexible office (Sofo) and small office/versatile office (Sovo) developments lack legal protection under the existing Housing Development Act (Act 118).
Federation of Malaysian Consumers Association's (Fomca) chief executive officer Saravanan Thambirajah, emphasised the critical need for the RPDA to clearly define what constitutes mixed development.
'The Act must clearly state what qualifies as mixed development and ensure that all such projects are fully regulated – just like residential ones.
'This clarity is essential to ensure comprehensive regulation and protection for buyers in this evolving sector of the property market,' he said in an interview yesterday.
Saravanan noted that robust safeguard measures are necessary to protect buyers from abandoned projects.
'We need mandatory developer licensing and financial checks, regulated accounts for buyer payments, strong and transparent Sale and Purchase Agreements, and a clear 'Option to Purchase' system to let buyers exit if a project is delayed.'
He also advocated for the establishment of a dedicated tribunal or complaints platform for buyers affected by such issues.
Reiterating the need for proper enforcement, he said: 'Laws are only as good as their enforcement.'
'We need a system that monitors projects, penalises rogue developers, and gives buyers timely updates and help when problems arise,' he said.
Despite the support for the RPDA, Saravanan cautioned against hasty implementation.
He stressed the importance of thorough consultation with all stakeholders – buyers, NGOs, legal experts and developers – to prevent unintended consequences or market instability.
PMC Facilities & Real Estate chief executive officer Paul Puah Chee Keong lauded the RPDA, and called for the standardisation of assessment rates for commercial and residential developments.
He highlighted a pressing issue where consumers are currently paying commercial rates for properties intended for residential or dwelling purposes.
'Even though it's a commercial title, many Soho, Sovo and service apartments are designed for dwelling purposes.
'It's only fair that these should fall under residential categories for taxes and utilities. The quit rent, assessment and utilities should be adjusted accordingly,' he said.
Puah noted the RPDA's potential benefits in extending purchaser protections to commercial properties.
'If the new Act can extend protections similar to those in the Housing Development Act (HDA), it would be a significant improvement,' he said, referencing the HDA's existing safeguards like accrual accounts and transparent billing processes as 'sufficient.'
He highlighted the importance of aligning the RPDA with the Strata Management Act to ensure seamless implementation by property management practitioners.
'The Act should clearly spell out management components for mixed developments. This includes service charges and other operational standards,' he said.
Puah also stressed the necessity of clearly defining mixed developments within the RPDA.
'We need clarity to avoid confusion, as the market is already complicated by various terms like Soho, Sofo and Sovo.
'They are essentially the same,' he said, cautioning against being swayed by commercial interests that might manipulate definitions for profit.
Strata Property Owners Association Selangor & KL advisor Law Hock Hua weighed in on the proposed Building Managers Act, which aims to tackle the widespread issue of inadequate property and building management.
'The chronic issue of poor property and building management is due to the quality and commitment of the building managers, not the quantity of licences,' he said.
To address this, Law proposed property management exams at different levels, like the LCCI for accounting, to help employers assess candidates' academic qualifications.
'This structured approach would enhance the evaluation of managerial capabilities.'
Secondly, he suggested that licensed property managers should place a bond when handling finances.
'Unlike unlicensed managers who must post a bond, licensed ones don't, which affects their commitment,' he said, pointing out the imbalance in the current system.
Meanwhile, The Housing and Local Government Ministry had earlier said it is considering introducing a law to address abandoned commercial properties and to improve consumer rights protection, says its minister Nga Kor Ming.
He said Sofo and Sovo properties are not covered under the current Housing Development (Control and Licensing) Act, which is limited to residential developments.
'Due to the absence of legal protection, buyers affected by abandoned projects under these categories often find themselves with no legal avenue for recourse.
'Following extensive engagements with industry professionals, NGOs and other stakeholders, the ministry has decided to study a new law known as the Real Property Development Act (RPDA) to resolve this issue,' said Nga in his speech at the StarProperty Real Estate Developers Awards 2025 on Thursday.
Nga said the RPDA will include certain commercial developments which will safeguard the rights of property purchasers.
Nga also said his ministry is mulling the Building Managers Act to address the chronic issue of poor property and building management.
At present, he said there are only 594 firms licensed to practise management, serving 26,334 strata schemes or 2.91 million strata units in Malaysia.
'This highlights a serious gap where there are insufficient licensed firms to effectively manage all existing strata schemes. As a result, many property owners and tenants face significant challenges due to declining property values caused by poor property management,' he said.
'With the Building Managers Act, along with the soon-to-be tabled Urban Renewal Act, we are committed to addressing the root problem of aged, dilapidated urban buildings,' he added.
As of March, the ministry, through the Taskforce on Sick and Abandoned Private Housing Projects, has successfully revived 1,044 private housing projects nationwide worth RM100.1bil in total, benefiting 124,539 homebuyers.