What is freehold property
As the developer owns the land, property built on it facilitates the transfer of land to the buyer provided it is a landed residential property such as a bungalow or a terraced house. This ownership will be in the form of Master Title.
As for a condominium or other high-rise residential properties, the buyer owns a stake in the condo by way of the unit but the developer still owns the land. In this case, the developer will distribute the ownership via Strata Title.
Unlike leasehold, only environmental and town planning controllers limit freehold developments. Under the Land Acquisition Act 1960, the state can take back freehold land if it is for public purposes, such as an MRT project, or economic development.
For example, the federal government acquired the land which the Ampang Park Shopping Centre was built on for the MRT project. If such an acquisition occurs, the owner will be paid the market value of the property.
Freehold land certainly does have its fair share of benefits. Owners face fewer and less stringent limitations should they want to transfer their land to someone else. They also have the right to subdivide and allocate the land, although it is still subject to town planning controls.
If there is no development taking place on a freehold land, the state cannot claim the land from the owner, meaning you are not required to stick to a specific timetable.
Generally, freehold properties go through stable growth provided all other aspects of the property are in good condition. There is also the possibility of redevelopment of old freehold properties where owners will be compensated.
But there’s one thing to note here: there are freehold properties that need the consent of the state when transferring ownership. An example of “restricted” freehold properties are the semi-detached houses in Kelana Jaya. The reason for this is these properties were converted from leasehold to freehold.
Potential buyers are advised to look at the title of the property to find out if there are any restrictions on the land before deciding to make a purchase.