SINGAPORE, Dec 25 — Homebuyers from Singapore are claiming that a Malaysian developer did not properly inform them about the terms and conditions of their deals.
The buyers were shocked to discover that they had purchased the homes under a Private Lease Scheme (PLS).
PLS grants a leasehold for 99 years rather than actual ownership meaning buyers do not own the property outright; instead, are considered tenants of the developer, who retains ownership.
This means that the buyers are unable to rent or sell their properties without the developer’s permission and are not entitled to strata titles or voting rights in the management of the condominium.
Property lawyers in both countries advise potential buyers to carefully scrutinise the fine print of agreements and to work with local agents who have a better understanding of the regional market before committing to property purchases in Johor.
Approximately 170 buyers have banded together in a WhatsApp group to address their concerns, many of whom have purchased properties for weekend use or for investment purposes, spending as much as S$275,000 (RM907,280).
A legal expert interviewed by CNA explained that under the PLS, buyers are essentially signing long-term rental agreements, which may also leave them vulnerable in the event of legal disputes.
Creditors can also pursue claims against the land, which would be to the disadvantage of the lessees, and the value of their properties could also be affected.
Since 2022, at least 80 Singaporean buyers in two groups have initiated legal action against the condo developer and an investment firm in a Malaysian court.
At least 70 buyers filed a complaint in June with the Singapore Council of Estate Agencies against the real estate agency that marketed the property to them.
Developers however maintain that the PLS is a legally valid arrangement, and argue that the buyers are now beyond the legal period in which they could take legal action.
CNA reported that Singaporeans were among the top buyers of properties in Johor Bahru — driving up prices of condominium units by 30% in the first three months of this year.
