The Malaysian Bar notes that the Government tabled the Urban Renewal Bill 2025 for its first reading in the Dewan Rakyat (House of Representatives) on 21 August 2025. The Bill seeks to create a framework for the redevelopment, regeneration, and revitalisation of urban areas, with significant implications for homeowners, tenants, and the public at large.
We recognise the need for a coherent legal framework to address ageing buildings, abandoned developments, and unsafe structures in Malaysia’s cities. Urban renewal is a legitimate and necessary national objective. However, this objective must not come at the expense of fundamental rights, security of tenure, and public confidence in the rule of law.
The Bar is concerned that the consent thresholds proposed in the Bill are set too low. As drafted, the Bill allows renewal projects to proceed with 80 percent consent for buildings aged 30 years or less, 75 percent consent for buildings over 30 years, and 51 percent consent for unsafe or abandoned buildings. 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.
Additionally, with regard to States’ participation in securing the consent threshold, the Malaysian Bar is concerned that the revised text now places the responsibility entirely on the appointed qualified developer, without any direct participation of State authorities. 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.
Furthermore, in relation to compulsory acquisition under section 21(4), once the consent threshold is secured, the remaining landowners who disagree will be subjected to compulsory acquisition. 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.
In the light of these concerns, we emphasise these key points:
- The State must be involved in confirming the consent threshold;
- The appointed qualified developer cannot be permitted to independently secure the consent threshold;
- It is illogical to allow compulsory acquisition to proceed merely on the basis that the developer has secured the consent threshold;
- The right to receive an offer of benefit must be extended to all landowners, both participating and non-participating; and
- The consent threshold percentage is lower than the threshold in some urban renewal-centric countries.
We are further concerned about the Bill’s reliance on compulsory acquisition mechanisms under the Land Acquisition Act 1960. 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.
The Malaysian 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. Only by ensuring higher safeguards and stronger protections can urban renewal achieve its intended purpose of revitalising our cities while respecting the rights and dignity of all Malaysians.
Mohamad Ezri b Abdul Wahab
President
Malaysian Bar
27 August 2025