JOHOR BARU: Singaporean homebuyers are embroiled in a legal dispute over Johor properties sold under a Private Lease Scheme (PLS), which offers 99-year leaseholds instead of full ownership.
The scheme has faced criticism for its restrictive terms and alleged lack of transparency, with buyers claiming they were not properly informed that they would be treated as long-term tenants rather than owners.
The New Straits Times found that at least 170 buyers have joined a WhatsApp group to address their grievances, with some spending up to S$275,000 (RM907,280) on units for weekend retreats or investments.
The Singaporean homebuyers claim the Malaysian developer failed to disclose the terms of their Johor condo purchases properly.
More than 80 buyers initiated legal proceedings in 2022 against the developer and a Malaysian investment firm, while another 70 lodged complaints in Singapore against the real estate agency that marketed the properties.
Among the restrictive conditions is that "owners" are prevented from renting or selling units without the developer's consent.
Buyers are also excluded from strata title ownership and management voting rights. These rules violate Malaysia's Strata Management Act 2013.
CNA Singapore reported that over 100 Singapore property buyers who purchased luxury condominiums in Johor complained that the developer did not inform them of the terms and conditions of the purchase.
Lawyers have also highlighted the potential vulnerability of buyers in legal disputes, where creditors could claim against the land, leaving lessees at a disadvantage.
Despite legal challenges, the condominium developer maintains that the PLS is a valid arrangement and argues that buyers were informed of its terms.
Nevertheless, a Universiti Utara Malaysia (UUM) research team led by Assoc. Prof Dr Ruzita Azmi has raised concerns about the PLS's compatibility with Malaysia's property laws.
Their findings suggest that the PLS undermines security of tenure for buyers.
The researchers recommend comprehensive legal reforms to protect buyers and align the PLS with international property frameworks.
Singaporeans have been major property investors in Johor, fuelling a 30 per cent surge in condominium prices in the first quarter of 2024.
Meanwhile, property lawyers and industry professionals have advised buyers to scrutinise agreements and consult local experts to avoid legal pitfalls.
This case serves as a cautionary tale, highlighting the need for clarity and legal safeguards in international real estate investments.
The New Straits Times has reached out to the property developers, their appointed realtors, property lawyers, and State Housing and Local Government Committee chairman Datuk Mohd Jafni Md Shukor for comments.
They have yet to respond at press time.