Urban Renewal Bill: Bar flags weak consent rules, lack of state role

Summary

• The Malaysian Bar warns that the Urban Renewal Bill’s redevelopment consent levels are too low.

• It urges raising thresholds from 51-80 percent to 85–90 percent to protect communities from displacement.

• The bar also flags the removal of state authorities from the process of obtaining consent from owners or occupants, which has been left to developers.

The Malaysian Bar has raised concerns over the proposed urban renewal law, warning that the proposed consent thresholds for redevelopment projects are too low and risk undermining the rights of minority homeowners.

The Urban Renewal Bill, tabled in the Dewan Rakyat last week, sets consent levels at 80 percent for buildings under 30 years old, 75 percent for those older than 30 years, and just 51 percent for buildings deemed unsafe or abandoned.

The bar cautioned that these figures fall below international standards and could expose communities to forced displacement.

Bar president Ezri Abdul Wahab said while urban renewal is a legitimate and necessary national objective, this must not come at the expense of fundamental rights, security of tenure, and public confidence in the rule of law.

“Such thresholds risk undermining the rights of minority owners and exposing communities to potential displacement. In other jurisdictions, higher consent levels have been adopted as safeguards.

“We therefore urge that the thresholds for habitable buildings be raised to at least 85 percent for older buildings and 90 percent for newer ones, with independent verification of consent,” Ezri (above) said in a statement today.

The bar also expressed concern about the removal of state authorities from directly overseeing the consent process.

Under the current draft, Ezri said the responsibility is placed entirely on developers, raising fears of conflicts of interest.

“While PlanMalaysia indicated during a recent briefing session that this matter will eventually be addressed in the rules of the Act, there is no assurance that this would happen, as the power to make regulations is vested solely in the minister under Section 29 of the bill,” he said.

Equally troubling, he said, is Section 21(4) of the proposed law, allowing compulsory acquisition once the threshold is met, leaving dissenting landowners with no protection.

“This raises serious concerns regarding fairness and due process. The bill provides no protection to non-participating landowners. Safeguards and the right to receive an offer of benefit under urban renewal should extend to all landowners, whether participating or otherwise.

“The Malaysian Bar also notes that the bill allows for a declaration of urban renewal without prior engagement by the authorities with landowners. This marks a departure from earlier drafts, which had envisaged a more active role for state authorities in ensuring the consent threshold was met,” Ezri added.

More concerns on acquisition mechanism

Ezri said the bar is further concerned about the bill’s reliance on compulsory acquisition mechanisms under the Land Acquisition Act 1960.

It insisted that any use of compulsory acquisition in the context of urban renewal should be approached with caution, reserved only for genuine public purposes, and accompanied by enhanced compensation formulas that include relocation costs, disturbance allowances, and a right of return.

“Tenants and occupiers, though not title owners, must not be overlooked. Adequate statutory protections must be introduced to guarantee temporary rehousing, relocation support, and first right of return to equivalent units.

“Without these safeguards, urban renewal risks displacing vulnerable communities and widening social inequalities.

“Equally critical is the need for transparency and participation. Public hearings, social and traffic impact assessments, and full disclosure of development terms should be made mandatory before any renewal project is approved.

“The bar is particularly concerned about recent moves to narrow opportunities for public hearings in Kuala Lumpur, which run counter to the principles of transparency and accountability,” Ezri added.

He said the bar advocates for the establishment of an independent mediation body with clear powers to address disputes and procedural defects, as well as provisions for legal aid to affected owners and occupiers.

“Renewal must not become a tool for private profit at public expense. In any event, the absence of a tribunal is problematic. Part IV of the bill merely provides for mediation, which is insufficient to effectively address disputes.

“We therefore urge the government to defer the second reading of the bill and to subject it to further consultation with all stakeholders, including residents’ groups, consumer associations, and civil societies,” Ezri added.

Urban rejuvenation initiatives, which are being proposed under the Urban Renewal Bill, are currently governed by the Strata Titles Act 1985, which requires unanimous consent from all property owners under Section 57 before the management body can act as a trustee to carry out redevelopment projects.

Under the bill, the ministry has recommended a tiered consent threshold based on the condition and age of the building, of between 51 to 80 percent.

The menteris besar of the four Perikatan Nasional-led states - Kelantan, Terengganu, Kedah, and Perlis - had also objected to the bill through a joint statement yesterday.

In a rare moment of bipartisan support after the bill’s first reading, several government backbenchers and opposition MPs called for the second reading to be postponed to the next Dewan Rakyat sitting.

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