Kedah Real Estate Housing and Developers Association (Rehda) said it is aware of the serious problems confronting those affected by the Court of Appeal ruling on putting a lid on mortgages or loans involving Malay reserve land.

The association’s chairperson Rick Cheng appealed to the state government to resolve the issue as it involved 60 percent of the market share and RM1 billion in GDP.

“It is a serious issue affecting the industry, many are affected including developers, buyers and lawyers,” Cheng told Malaysiakini.

However, Cheng said the association had not gone to the press about the issue as it would prefer to settle the matter in “a low key manner”.

“We don't believe in shouting about the matter but it does not mean we do not do our work,” Cheng said.

“We know everything and are aware of the situation. We are an NGO and not politicians,” he added.

It was learnt that the state government was planning to intervene in the issue by tomorrow after it held a state executive council meeting in Sik, Kedah.

Cheng was responding to Gerakan national Youth chief Tan Keng Liang who said yesterday that almost all banks had stopped loans related to Malay reserved land in Kedah about two months ago after a ruling by the Court of Appeal.

This move included loans for purchasing homes on Malay reserve land, said the state Gerakan Youth chief.

“More than 80 percent of land in Kedah are under Malay reserve land. This includes land owned by Malays and non-Malays,” Tan told Malaysiakini.

He noted that on Sept 30 last year, the Court of Appeal had ruled that mortgages on Malay reserve land to banks and institutions not listed under the Second Schedule of the Kedah Reservation was “null and void”.

The case in question - Jamaluddin bin Jaafar vs Affin Bank Berhad - is currently at the appeal stage at the Federal Court.

On Nov 16, Kedah Land and Mines Department issued a directive to postpone the registration of mortgages for all Malay reserve land except those who obtained loans from banks and institutions listed under the Schedule.

The Department’s director Md Zuki Siru said the directive is effective until the Federal Court decides on the case.

So far, only two banks are listed under the Schedule. They are Bank Bumiputera Malaysia Bhd and Bank Pertanian Bhd.

After its merger with Commerce-Asset Holdings Berhad, Bank Bumiputera is now CIMB Bank Berhad.

“This means only Bank Pertanian can accept mortgages for Malay reserve land in Kedah,” Tan said.

In response to this, Cheng said part of the issue had been resolved, for example, government servants who wished to apply for loans to buy property on Malay reserve land could do so now.

As for private buyers, the state had said it would try to resolve the matter in a few months' time, Cheng noted.

“For those whose lands had already been charged but banks were not releasing the money, Rehda members would not be charged interest as it was not the developers' fault,” he said.

“At the same time, since the fund did not come in and projects may be delayed, we hope that the purchasers will not sue for late delivery,” he added.

“This is not the developers or purchasers fault but the law’s fault,” he stressed.

“We are open to discussions and negotiations and will solve the problem in a more gentle way, we will not be shouting like politicians,” Cheng said.