Flat dwellers risk losing properties due to arrears

The Star

28-06-2025

GEORGE TOWN: More than 70,000 property owners here have defaulted on their parcel rent payments, with arrears totalling some RM12.5mil since 2019.
The Penang Land and Mines Office (PTG) recently revealed that these homeowners risk losing their strata parcels due to unpaid arrears as of June 1.
PTG director Dr Faizal Kamarudin said the highest number of defaulters is in the northeast district with 32,000 affected accounts.
Under the Strata Titles Act 1985, properties may be forfeited if arrears are not settled within three months of receiving a legal notice.
The parcel rent, billed annually, was introduced in 2019 to replace the uniform quit rent system for stratified titles such as condominiums, apartments and flats.
It is separate from assessment tax and maintenance fees paid to the Joint Management Body or Management Corporation.
Property agent Joyce Lee said many property owners, particularly first-time homebuyers, are unaware of parcel rent.
She explained that unlike utility bills and maintenance fees, parcel rent does not carry immediate consequences such as service disconnection, making it easier for homeowners to overlook.
'The amounts are relatively small, and because they aren't bundled with the monthly management fees, they often go unnoticed.
'The fragmented nature of the payment system, where each tax or utility requires logging in through different portals with no auto-debit function or centralised reminders, makes it even more inconvenient,' she added.
Besides a lack of awareness, Lee believes other contributing factors include rising living costs and inflation, which have led some owners to prioritise more urgent payments.
'There's a common belief that they can simply pay it later, especially when selling the property.
'Some sub-sale owners may not even realise that parcel rent is still under the previous owner's name, adding to the confusion and non-compliance,' she said.
Lee added that more public education is needed, especially targeting new homeowners, along with possible incentives, early payment discounts or stricter penalties to encourage better compliance.
Property valuer Mohd Fitri Hashim, 42, said parcel rent arrears could accumulate significantly if left unpaid.
'Parcel rent is calculated based on the size of the individual strata unit.
'For example, the parcel rent for a typical low-cost flat would be below RM30, while a standard condominium unit of about 1,000sq ft would need to pay around RM50,' he said.
Mohd Fitri added that for luxury condominium owners who pay about RM400 annually in assessment tax, their parcel rent would be less than RM100.
'For example, at Rifle Range Flats in Air Itam with over 3,000 units in the nine blocks, each unit of about 400sq ft size has to pay about RM25 in parcel rent yearly,' he said.
At the nearby All Seasons Place, the 850sq ft condominium's yearly parcel rent comes to about RM24.
In comparison, the quit rent for a 1,523sq ft landed property in Teluk Kumbar on the southern tip of the island is RM42 annually.