The effect of the Control of Rent (Repeal) Act 1997 on the rental level of commercial properties in Georgetown
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Date
2003
Authors
Noraini, Johari
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
Rent control has always been associated with hardships on the part of tenants and patronage by
the Government. Tenants were always portrayed as being a suffering lot who are subject to the
whims of the landlords. Landlords, on the other hand, were portrayed as being property owners
who has no regard for the welfare of others except his. In Malaysia. the Control of Rent (Repeal) Act 1997 has been in full force since 151 January 2000 after the transitional period expired on 31st December 1999 after being in operation for 27 months prior to the expiry. The repeal has been touted as the much-awaited policy that will return to the owners, rights deprived from him for decades. It is interesting to study what effects the repeal has brought to the tenants, the owners, the authorities, the general business in the inner city, the tenant mix in a particular business precinct, and various other social and economic impacts that the repeal has given rise to. Certain pertinent questions that beg to be answered in the wake of this social change are: Has the repeal achieved its objectives of returning the rental of the pre war shop houses to their market levels? Are the owners satisfied with the way things have turned out? Are the tenants the worst hit party in this melee? This study hopes to answer those questions. In doing so, a series of structured interviews via questionnaire with tenants and owners were devised. A few unstructured interviews with property professionals and officials were also done to support the findings of the questionnaire. Findings of the study revealed a complicated network of factors interacting with each other to produce market conditions as seen today. It was found that rental levels have generally increased by about 400% post repeal but this increase was largely obscured by the relatively low levels of the initial rental levels prior to the repeal. Findings also indicate that previously rent controlled
premises were unable to achieve market rent due to their dilapidated physical conditions. A way
out of this predicament for owners is to rehabilitate or refurbish their premises to compete with
modern buildings in tenant procurement. It was also found out that owners paralleled tenants in
perceiving that the repeal has no discernible effect on them or their business. All these contradictions in the research findings have prompted the writer to recommend further research to be done on certain aspects of the topic in order to further increase understanding of the anomalies present in the subject matter.
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Keywords
Rent