klia2 : Why not?

I was invited to a briefing by Malaysia Airports (MAB) at the Courtyard Garden somewhere in Jalan Dungun, Kuala Lumpur. After braving the horrendous traffic and the heavy rain, I managed to arrive slightly before 8pm. The moment I stepped into the restaurant, I was surprised to see a familiar face which I have seen in various media before. It was the face of Tan Sri Bashir Ahmad, the CEO of MAB. Then as cards were exchanged, the names that I saw on the cards were surprising too as all the top managements of MAB were there. There were the Sr. GM of Operations, Dato' Azmi Murad and GM of Corporate Communications, Nik Anis, among others. It made me curious but excited for the session to start.

The moment the briefing starts, with Tan Sri Bashir taking the lead, I can say that it was a public relation effort by MAB with the social media. When I look around the room, I can see a few familiar faces like Christopher Tock, Patchay, Thomas Yap, Daniel Cerventus and Firdaus 'Feeq' to name a few who are part business, travel and lifestyle bloggers. As the briefing was going on, they were basically tweeting about what was unveiled in front of their eyes. The briefing was on the specifications of the new klia2 which will be completed in 2013. And it started with this Youtube video : 

After the video presentation, Tan Sri Bashir announced that there are no low cost terminal in the world for them to use as a reference, hence klia2 was built according to the need of the low cost operators such as AirAsia. Then Tan Sri Bashir gave us the facts and figures about the size of the terminal : 257,000; the contact stands : 68; the capacity to handle how many passengers : 45 Millions; the fully automated Baggage Handling System (BHS); a dedicated runaway (Runaway 3) an aerobridge (where plane can taxi below it to go from one side to another after landing and save time) and connectivity between KLIA and klia2. He also told us how MAB increased the capacity according to what is asked by AirAsia. The whole list of what klia2 has to offer can be found at MAB website : Latest News on klia2.

That was the kosher part of the briefing and as expected, questions came fast and quick with most of those who attended the event wanted to know what is the controversy that seems to be created by AirAsia. If you don't know anything about what is the stand-off between AirAsia and MAB is all about, read this blogpost by Tony Fernandes : Say no to airport tax increase and this report by Malaysian Insider about the issue (a two sided version and read the comment section to) : MAHB removes AirAsia anti-tax hike posters, stickers. So, this controversy is all about a hike of RM7-00 in contrast of us never knowing we had been paying airport tax through airlines we've flown in the pre-AirAsia era.

Here is my two sens worth. 

The new klia2? Nice and amazing. I was told they are trying to emulate Dubai and Changi. There's hotels, there's retail experience and good restaurants/food outlets. Good and well. Here's a question I asked and didn't really get an answer. Will you have a resting area like what Dubai and Changi have for those who doesn't want to pay any hotels or whatever additional cost. A settee or a reclining seat which you can sleep on for 2 to 3 hours and a bathroom with shower facilities and such. The answer was not fully given meaning, they may not have it. 

Then the issue with AirAsia. Sorry to say, I don't agree at all with AirAsia. This carrier thrive on every sen it collects from its consumer. Simple mathematics will show that they have been collecting additional charges without explaining why and which seems to go only into their pockets. And the eccentricities of its own, one Tony Fernandes which is trying so hard to be the next Richard Branson (whom he has a close relationship with) does not show any regards for others. Yes, he did bring low cost carrier in a big way into Asia but he is not the solve all, end all solutions. He still has a long way to go. And with an increase of airport tax, he is losing RM7-00 which he can play with to tax his next passenger. For all you know, anticipating an increase, he will increase his charges first. MAB is having a tough time as Tony is popular and a smart businessman.

I fly on leisure quite a lot and AirAsia is not my instant choice. I know people use AirAsia if they planned ahead and with their marketing strategy and their pay first, fly later promotion, they are quite popular. klia2 maybe relevant to be a better choice than the current LCCT but I may not be one of its frequent user when it comes into being. If the price increase of RM7-00 is to make sure klia2 will be a better terminal, for me, I would gladly accept it.

As for me, as I have tweeted after the briefing, what I find to be the best information I got from MAB is that a Victoria Secret's pop-up store has opened in the satellite building in KLIA. As for someone whose both kampungs are within the vicinity of both airports, I have long ago given up on having an airport which will benefit them as truthfully, it does not. Here is my long ago blogpost on the matter : How I lost my kampung...

Abandon housing project solution in Malaysia?

In Malaysia, there was once this institution called Danaharta. It was owned by the government. It goes around helping banks with high non-performing loans to manage and finally settled this problem. It was in existence from 1998 to 2005. It was a non-profit organisation with impossible Key Performance Index  and it managed to settled all the problems in the banking industry with an act enacted by Parliament. It saved a banking industry. It was ahead of its time. It was the brainchild of a genius in the government then and it was run by people who were really good at what they were picked for. Now, Danaharta has become Proharta and is a private entity. 

During the existence of Danaharta, it did got involved in abandon housing projects as Danaharta was given the power by Pengurusan Danaharta Nasional Berhad Act 1998 gives it the right to acquire, manage, finance and dispose of the assets and liabilities of a financial institution in trouble. And the bulk of the financial institutions that were in trouble were dealing with abandon housing projects. Although Danaharta was not established to save abandon projects, it became so. During the period of 1998 until nearly 2005 (even later), you can see Danaharta taking the advertisement spaces in major newspaper to sell off properties like factories, commercial properties and even residential. Danaharta was also known to revive abandon housing projects, clean up the management and sell it off too. It did made a tidy sum before closing down shop. 

Was before there was Danaharta, the Bank Negara Malaysia also had an entity called Tabung Projek Perumahan Terbengkalai or now better known as TPPT. It was established in 1990 and ceased in 1992 after reviving 19,000 units of properties. It used a fund under Tabung Pusingan Perumahan Kos Rendah which was provided by Bank Negara Malaysia. Nowadays, TPPT Sdn Bhd has moved away from its office in Bank Negara itself and is another housing developer in Malaysia which used its early days as reviver of abandon housing projects to sell new and completed houses. Here's a link to its website (a bit outdated though) - TPPT Sdn Bhd.

In the housing industry nowadays, since years ago, we seem to be facing the problem of housing development being abandon long before the housing project is completed. It is a bit of a mystery why a law which was enacted since 1970s didn't address the issue of abandon projects. What the law before 2007 had was clauses which ask housing developer to have RM200,000 in its Housing Development Account at any one time and this is the only money supposedly they need to maintain if they want to be in operation. There are penalties which the enforcing authority under Kementerian Perumahan dan Kerajaan Tempatan (KPKT) imposed but are usually paid by the culprits of abandon housing developments without any problem.

The amendments to the Housing Development (Control and Licensing) Act 1966 in 2007 was supposed to add additional penalties and address the issue of abandon housing development. It did stop the fly-by-night establishment of new property developer who circumvent the law by being a bit clever. Here was the scenario in early days of the 2000s. These law benders, some of them have legal background, circumvented the law by building houses without being penalised. The law stated that any person who build more than four (4) houses and sell it for profit is considered to be a housing developer and whatever they do is considered to fall under the housing development law. What these developer did was to sell bungalow plot without any property built on them under one agreement and another agreement is signed for a bungalow to be built on the property. So, they became outside the law before the amendment in 2007 which states that any housing development that KPKT found to be similar to housing development will fall under its purview.

Now, the first bill of the amendments to curb the housing development is on its way through Parliament. The news on 17th November in The Star Property mentioned among other that fines will be increased to RM50,000-00, housing developer need to refund cancelled Sale & Purchase Agreement within 30 days with fine starting from RM250,000-00 and RM5,000-00 for each day of non-compliance and the best of all, the Housing Development Account will now be 3% of the housing project development total cost and not just RM200,000-00. 

I find the new law to be refreshing as it will ensure only housing developer with deep pockets to enter into the business of housing development. There will be complains about certain housing developers to not being able to meet the requirement and we can already hear the Real Estate and Housing Developer Association (REHDA) breathing down the neck of the Minister trying to tweak the Act to suit them but I really hope KPKT and Attorney General office will stand firm on these amendments. National House Buyers Association (HBA) will agree to the amendments as they have been fighting for so long for a solution to the issue of abandon housing projects problem. Here are one of their view on abandon project : Cleaning up abandoned or stalled housing projects

In the meantime, I am also hoping that another effort will be made by the government on all the abandoned housing developments around the Malaysia. The last I heard it was spearheaded by Syarikat Perumahan Negara Berhad (SPNB) which is also tackling the issue of affordable housing. The problem with an institution such as this is when they have to deal with the state governments which sometimes are a bit slow in giving their approval to help the process along. My suggestion is either an institution like Danaharta or TPPT should be given all-encompassing power again or SPNB should be given more power and allocation which can take over and manage the abandon housing development.

Google+ Page of Khairul, Suhaila & Hazlina

I have always believe in utilising social media even before the term was popular. When I was told by a friend about Google+ Page, which is kind of but not exactly like Facebook Page, I straight away jumped at the opportunity to create my medium sized legal firm's Google+ Pages. Unlike the unsearchable Facebook Page, here's a searchable alternative.

Khairul, Suhaila & Hazlina's Google+ Page 

Or, if you are more into Facebook :

Khairul, Suhaila & Hazlina's Facebook Page

Here is the Google+ Page for my book :

Ask the Lawyer!'s Google+ Page

and the Facebook page :

Ask The Lawyer's Facebook Page

And for the past two weeks, I have been appearing in articles in online and offline publication. One is an interview by the Sun, a local newspaper about my book and they took excerpt from 5 questions which can be found in my book and another one where I was interviewed by Malaysian Insider, a local online news portal, about affordable housing in Malaysia (they got my name spelled wrong - 'Anuar' was spelled as 'Anwar' and I gave more leads which the reporter followed through than actually giving much about subject matter itself)

The Sun's interview picture :



and the link to the Malaysian Insider article :


Affordable housing the new way to win votes in Malaysia

Real Property Gain Tax in 2012

The 2012 Malaysia Budget was announced a few weeks ago and one of the thing that was announced was the change in the Real Property Gain Tax in 2012. In order to understand the tax that was levied before, let us go a bit further. Pre-2009, the time before the Real Property Gain Tax was tweaked to inject some excitement into the property players in Malaysia. 

The Real Property Gain Tax was not what it was today. It was a charge of a whooping 30% for any property disposed 2 years from the date it was bought (the date on the Sale & Purchase Agreement or whatever form of transfer which allow a person to own land in Malaysia). It goes down as the year goes up. 20% for the third year disposal; 15% for fourth year disposal and 5% for fifth year disposal. And after the 6th year, no tax is levied. Here's a little secret, this Rates of Tax was NEVER repealed. It was just suspended by a decree in Parliament and it was passed through debate. And it was done in 2009 for the Budget 2010.

The change in 2009 was as a measure to excite the market and the market was excited that it got confused when the rate was 5% for only some of the years and not across the board. Under pressure, an announcement was made at the end 2009 so that any sale done by anyone after January 2010 was taxed at 5% whatever the year it was disposed. That is much, much lower than the 30% right? However, the government does want you to pay the 5% regardless whether you will be taxed or not. As long as you sell your property and make a chargeable gains or simply said, a profit, you need to pay that 5%. Only after looking through all the documents filed by your lawyer or yourself, and if you profit is not taxable according to the rates of tax, only then will the money be refunded.

Then, a change is now at hand which will be in force in 2012. For any property sold after it was purchase for 2 years, a 10% tax is levied. That is not so bad right? Just hold the property you have invested in to make money for 2 years and then sell the property. If you don't have the time to wait, factor in your Real Property Gain Tax cost into your profit. And there are other factors you can add into the selling price of the property. All your cost to buy, maintain and even sell the property can be factor in. Such as your legal fees, your renovation cost and your advertisement cost (even your real estate agent cost). When you send your Real Property Gain Tax form, send the Inland Revenue Department the receipts for all the said item. And please remember, you can get once-in-lifetime exemption for the property you have lived in all your life which you consider as your private residence.

Although the change in the tax regime for property acquisition is good, it will not help speculators to stop speculating. Government seems to forget a few things when they formulate their strategy. They still have not make property ownership easier for those who are under the Malaysia My Second Home campaign. For now, the participants of the scheme need only to put in some money and show proof of the deposit. They should just tweak it so that they are allowed to buy properties in certain areas and put in a caveat about when and how it can be transferred. That can create ripple effect for that area and maybe a new set of tax rate can also be levied on them. Please remember that Malaysia still has one of the cheapest property prices in the region (in contrast with Singapore and Hong Kong)

Altium @ Damansara Perdana

Does Petaling Jaya need a skyscraper? Actually, there is no real skyscraper in Petaling Jaya and that Telekom Tower you see when you use the Federal Highway is not one. That is in Kuala Lumpur. A few weeks back, I was invited to the launch of a new skyscraper in Petaling Jaya, specifically at the busy and vibrant Damansara area. It was also to announce the ambassador for this new commercial building. 

The said commercial development is The Altium at Damansara Perdana. And the said ambassador is non other Jojo Struys, better known as a TV personality and columnist with The Star. The developer for the project is AQRS, The Building Company.

The Altium is a unique building which marries Green and Technology. The Altium consist of three main components. The Prime, a 22-level Grade-A MSC compliant green corporate office; The CEO Suites, 12-level SOVO Suites, a lifestyle and work solution business suites and The Pulse, a 3-tiered retail and F&B podium, a place for social and business networking.

To see more of the Altium, here is The Altium homepage.