Nusmetro Proposal Illegal

Kampung Buah Pala residents have rejected the double-storey house offered by developer Nusmetro Ventures (P) Sdn Bhd to vacate their homes. In response to Mr Thiru: Dear All, I refer to the report from Malaysia Kini regarding the statement by Mr. A Thiruvenggadam, the advisors to Kampung Buah Pala residents, that Nusmetros proposal is illegal because the land cannot be transferred, leased or charged or used as a business instrument without getting written approval from the State Authority. I certainly hope that these residents get proper legal advice especially from one who are familiar with conveyancing practices in the country. Many of us own properties whose titles are subject to what we called restriction in interest i.e. the land cannot be transferred, leased or charged without approval from the State Authority. If Mr. Thirus advice is correct then all owners of such properties would not be able to sell these properties because to do so would render the sale illegal. As owners of properties with such restrictions, in a normal sale and purchase transaction, we would sign the SPA first and after that we would be given certain time-frame to procure the consent from the state authority to transfer the property to the purchaser. If consent is not obtained within the agreed time frame then the owner would just have to refund the deposit as provided in the SPA. In the Kampung Buah Pala scenario, assuming the residents there were to accept Nusmetros offer of a double storey linked house and if it follows that the layout plans and the building plans have all been approved by the authorities and what remains is that the title is still in the name of Nusmetro (as the registered proprietor) and the relevant sale and purchase agreements would have to be signed with the residents. The relevant authorities would have to decide whether the form of the Agreement should be as per Schedule G of the Housing Development (Control & Licensing) Act 1966 & Regulations or as per the agreement to be drafted by the Developer as the said exercise MAY NOT amount to sale of these houses under the said Act but the residents can always insist on signing the said Schedule G agreement. Upon signing the agreement, the residents may be asked to sign in escrow Form 14A (National Land Code 1965). Upon the execution of the Sale and Purchase Agreement then it would be the duty of Nusmetro, as the registered owner, to apply the consent to transfer in favour of the resident (it is a requirement that a stamped copy of the sale and purchase agreement has to be enclosed in the application for the consent) . Of course the residents would have to ascertain who would bear the legal fees for the preparation, execution and stamping of the SPA, the ad valorem stamp duty on the transfer and requisite registration fees on these Transfers. As the above exercise has the blessings of the Penang State Government, I am sure the Government would ensure that the consent to the transfer and charge would be approved. I hope the above explanation is clear enough to all those involved and those who think that the whole exercise is not legal based on the restriction . Kampung Buah Pala residents association chairman M. Sugumaran said there were too many loopholes in the offer. Meanwhile, the villagers adviser A Thiruvenggadam (ex-MBPJ councillor) demanded the state government to explain its claim that villagers would be made owners of RM500,000 worth of properties through the Nusmetro offer. He also mentioned that Nusmetros proposal is illegal because the land cannot be transferred, mortgaged, pawned, sub-let or used as a business instrument without getting written approval from the State Authority. Video by : Jimmy Leow Beng Hock