Viewers new to property told Sean they didn't know where to start, and were confused by terms such as condo, serviced apartment, SOHO, Bumi lot and strata. He used a lockdown to start a lecture series on the basics.
What do the main property categories and labels mean, and why should a buyer care?
“the main difference is some are protected by law some are not”
Every unit carries labels from its land title: residential or commercial, covered by the Housing Development Act or not, freehold or leasehold, Bumi or open, individual or strata. They decide how protected your payments are, what the building must provide, and how easily you can sell.
Why
HDA protects your payments
For residential projects under the Housing Development Act, buyers' money goes into an account the government oversees, the SPA is standardised, and payments follow a fixed construction schedule. Outside the act, a developer can set its own schedule, even claiming 60% at the foundation stage.
Leasehold adds time to a sale
Leases run 99, 60 or 30 years. Selling needs state consent, which adds about two to three months to a sale that might take four to five months on freehold. Sean says renewing the lease on a landed home can cost a few hundred thousand ringgit.
Bumi lots are cheaper, but stay Bumi
Quotas and discounts vary by state, such as 15% in Selangor and 30% in Johor. The status stays when you sell, so a non-Bumi buyer usually can't buy it, unless unsold Bumi units are released after the developer shows it tried to sell them.
Commercial title has other rules
Commercial projects such as serviced apartments need fire sprinklers in each unit and fewer car parks per unit than residential ones. True condos need at least three acres at no more than 50 units an acre, which is why few are built now.
What to do
- Check whether the project falls under the Housing Development Act.
- If it doesn't, read the payment schedule in the SPA closely.
- Find out the tenure, and for leasehold, how many years remain.
- Check whether a unit is a Bumi lot and what that means for resale.
- Know whether a landed home is on individual or strata title.
Editorial Note: Summarised from Sean Tan's full episode. The quoted answer is in his own words; the rest is our paraphrase. Figures reflect the recording date, so check current rates and rules before acting on them.
WHAT ARE THE CATEGORIES OF PROPERTIES?! | LECTURE 001
Sources & Verification Data
Summarised from Sean's English captions for this June 2021 lecture, made in collaboration with The Makeover Guys, where Sean says he works. The quoted line is verbatim; everything else is paraphrased.
