Anuar Alias; Yasmin Mohd Adnan & Md Nasir Daud DEPARTMENT OF ESTATE MANAGEMENT

1. AVA CONFERENCE 2012Gated and Guarded Community Scheme (GACOS) for Residential Development in Malaysia Anuar Alias; Yasmin Mohd Adnan & Md Nasir Daud DEPARTMENT OF ESTATE MANAGEMENT FACULTY OF THE BUILT ENVIRONMENT UNIVERSITY OF MALAYA

2. Flow in This Presentation • Brief Background • Gated Community (GC) and Guarded Neighbourhood (GN) in Definition • The Motivations for GACOS • GACOS – the Malaysian context • GACOS – the Legal and Planning Aspects • GACOS – Emerging Facts about GACOS Implementation • Conclusion 2

3. Background • Gated and Guarded Communities Schemes (GACOS) are a worldwide phenomenon. • GACOS have been in existence centuries ago – in Fiji, China in the ‘Tu Lou’ Hakka Villages. • It is generally understood that GACOS arise as a response to the fear of crime in urban areas and perceived failure of the authorities to ensure adequate safety and security. • Ancient military camps and police complexes are older forms of a GACOS. • ‘Expatriate Compound’ in Saudi Arabia and other Middle Eastern countries is an example of modern day GACOS.

4. Background • In Malaysian, a gated community refers to a cluster of houses or buildings that are surrounded by a wall or fence on the perimeter with entry or access control via guard houses, boom gates or barriers. • Normally includes round-the-clock security implemented through security patrols, central monitoring system and closed circuit television (CCTV) cameras. • Some GACOS in Malaysia, particularly the high-end, feature more than security. • Kajang Country Heights, Sierramas, Tropicana and The Mines are examples of GACOS that offer common facilities such as golf courses, club houses and recreation areas. Such guarded communities combine security with the offers of privacy and affluent lifestyles for their residents.

5. Definition • ‘Gated Community’ (GC) A group of residents or a community that live in a guarded fenced area whether in high-rise property such as apartment, condominium and town-house, or in landed property such as bungalow, terrace or detached houses. However, ‘gated community’ in Malaysia relates more to groups of residents or community who live in landed property with strata title. The development of GC is consistent with the provisions of Section 6(1A) of Strata Titles Act 1985 (Act 318). • ‘Guarded Neighbourhood’ (GN) A residential area controlled, in whole or in part, in the scheme of the existing housing or new land holdings with individual land title. GN scheme comes with or without guarded security house. By Malaysian law, physical barriers on public streets and any entry and exit restrictions to the residents and the public are not allowed. Thus the creation of a GN is not backed by any law or regulation. It arises as an ad hoc measure taken by residents to make their neighbourhood a guarded area. Note: The term GACOS refers to both concepts.

6. The Main Motivations for GACOS..1/2 • The main attractions of gated and guarded community are security, lifestyle and the protection of property values. This often comes with clear development guidelines for designing individual style homes, which aim to ensure standard and avoid homogeneity in house designs. • One very important feature of a gated community is that the building requirements are more flexible and allow for more efficient land utilisation. For example, they remove the necessity for walled boundaries, fences, drain reserves and building setback requirements.

7. The Main Motivations for GACOS..2/2 • Better quality “public” services, such as trash removal and park maintenance can be expected as these jobs are privatised, leaving local authorities to concentrate on the provision of other aspects. • Gated community is perceived as an answer to a growing threat of neighbourhood crime. • As part of a lifestyle, gated community offers privacy and peace of mind with the added benefits (perhaps) of community feel within the neighbourhood.

8. Features of Gated Community in Malaysia…….1/2 Gated Community in terms of requirements: • Scheme must be no less than 1 hectare and no more than 10 hectares (200-500 house units). • The roads and shared amenities inside the GC are owned by community and managed by the Management Corporation formed by residents. • Walls between an individual unit and its neighbour are not allowed. • Social Impact Analysis needs to be done before a GC can be considered by the authorities. 8

9. Features of Gated Community in Malaysia…….2/2 Gated Community in terms of requirements: • Two entrances/exits needed (one for main use, another for emergency) • Perimeter fencing to be not more than 9 feet high and at least 50% visible from outside • Boom gate is not allowed • Guard house of 1.8m x 2.4m • The houses cannot be more than 4 levels (18.5 metres) from basement • Visitors parking must be provided 9

10. Legal Aspects of GACOS Section 6, Strata Titles Act 1985 – Building or land capable of being subdivided into parcels. (1) Any building having two or more storeys on alienated land held as one lot under final title (whether Registry or Land Office title) shall be capable of being subdivided into parcels; and any land on the same lot shall also be capable of being subdivided into parcels each of which is to be held under a strata title or an accessory parcel. (1A) Any alienated land having two or more buildings held as one lot under final title (whether Registry or Land Office title) shall be capable of being subdivided into land parcels each of which is to be held under a strata title or as an accessory parcel. 10

11. Planning Aspects of GACOS..1/3 • Planning laws and the State Authorities have set stringent requirements for approval of GACOS, as follow: • Application is made by the landowner / developer; • The maximum area allowed for each “parcel” for “gated community” is 20 acres; • Type of development, number of units, building set-back and densities are regulated; • Roads in the housing scheme are not connected with adjoining areas at the time the application is made or in the future; • Facilities and open spaces to be provided are generally more onerous than for normal development; 11

12. Planning Aspects of GACOS..2/3 • Planning laws and the State Authority have set stringent requirements for approval of GACOS, as follow: • Facilities outside GACOS are to be also provided by the developer; • Construction of guard house without barrier is permitted; the location should not obstruct the traffic (i.e. on road shoulder only); • The location and design of the guard house must be shown in the plan when applying for the planning approval; • Fencing height is regulated; • Road reserves, street lights, drains, rivers, pavements, playground and vacant area remain as public reserved area. Developer can maintain the facilities based on agreement entered into with the Local Authority; • Local Authority and other utility companies are free to conduct their maintenance work in the guarded area 12

13. Planning Aspects of GACOS..3/3 • Planning laws and the State Authority have set stringent requirements for approval of GACOS, as follow: • Developer to provide details with regard to the concept proposed of the ‘Gated Community’ development in - • Disclosure statement; and • Deed of Mutual Covenants (minimum requirements as set out by the Authority must be incorporated); • Where developer wants local authority to provide some of the services, an agreement containing prescribed terms is to be included in the maintenance agreement between the local authority and the developer. These prescribed terms include a security bond. 13

14. Guidelines by REHDA • They are as follow: • Application - Applicants must state clearly that the planning application is for “gated community developments” under Section 6 (1A) Strata Title Act 1985. • Size of Development - The current planning guidelines set a limit to the development sizes of GACOS which are described in Table below. 14

15. Guidelines by REHDA • They are as follow (contd.): • Public Amenities - Developers must indicate GACOS parcels and public amenities (to be surrendered to the government) in each layout plan and pre-computation plan. However, the Planning Department has the right to determine the size of development depending on circumstances. • For each GACOS parcel, the provision of playground / vacant area is 10% while the minimum area required for a community hall is 2,000 sq. ft. Development exceeding one GACOS parcel must provide integrated public amenities to be located outside the GACOS. Parcel 2 (3-20 acres) Parcel 1 (3-20 acres) Public Amenities: Mosque, School, Football field - outside the Gated Area Parcel 3 (3-20 acres) Parcel 4 (3-20 acres) 15

16. Emerging Facts about GACOS Implementation FACT NO. 1 : USE OF GUARD AND RESTRICTIONS AT THE ENTRANCE The use of guards to regulate the safety of individual home or certain residential areas in some housing schemes is not contrary to the law, provided that they comply with the requirements / conditions set by the Ministry of Home Affairs (KDN). A special circular was formulated in 2006 by the Ministry of Home Affairs, i.e. Private Agency Circular No. 1, 2006 and Private Agency Circular No. 2, 2006 However, there are the wanton practices of imposing entry restrictions even in housing schemes not developed under Strata Titles Act 1985. Existing laws under Road Transport Act 1987 (S.80) and Street, Drainage and Building Act 1974 (S.46(1)) explicitly prohibit the installation of barriers at the entrance to or in public access areas, including the lane edge and alley behind the residence. Only temporary forms of physical barriers such as 'manual boom gate', safety cones and signs are allowed, and this is provided that they are manned round the clock by security personnel. 17

17. Emerging Facts about GACOS Implementation FACT NO. 2 : CONTROL OF ESTABLISHMENT FOR GUARDED NEIGHBOURHOOD (GN) Currently, no GN schemes operate on public amenities and in business areas - The draft guidelines explicitly preclude the establishment and operation of GN in a neighbourhood where there are components of public amenities such as school, mosque and community hall, and where there are public bus transportation routes. People who disagree with the establishment of the GN scheme - The draft guidelines also provide that any proposal to establish GN has to obtain the approval of the resident majority (heads of households), subject to no coercion and pressure on people who disagree. In this case, people who disagree should not be forced to pay maintenance fees or charges. 18

18. Emerging Facts about GACOS Implementation FACT NO. 3 : WHERE TO POSITION THE GUARD HOUSE The draft guidelines do not allow the construction of guard houses in the middle of the main entrance of the GN scheme area. Guard houses are only allowed on road shoulder and should not obstruct traffic. If the proposed guard house building is a permanent structure, applicants (residents’ association) need to apply for approval of the Temporary Occupation License (TOL) from the District Land Office (PTD) concerned. This rule is consistent with the provisions of Section 65, the National Land Code 1965 (Act 56). Guard house size must not exceed 1.8 metres by 2.4 metres. The proposed guard house designs must be submitted to the Local Authority (Building Division) for a temporary permit or approval for the construction of a guard house. Guardhouse can be built only after obtaining a temporary construction permit or approval from local authorities. 19

19. Emerging Facts about GACOS Implementation FACT NO. 4 : PERIMETER FENCING The guidelines do not allow the construction of the fence (perimeter fencing) around the boundary of the GN scheme neighbourhood. This is because the installation of fences in the area of GN involves public road reserves, unlike the GC scheme which is built on private land (the main lot of 'landed strata'). 20

20. General Implementation Concerns of GACOS FACT NO. 5 : PROBLEM WITH MAINTENANCE FEES Matters relating to the transparency of Residents Association of 'Gated Community' and prevention of embezzlement of residents’ association funds are not outlined in the guidelines. However, some of these issues have been dealt with in the Building and Common Property (Maintenance and Management) Act 2007 (Act 663) which applies legislatively to the development and management of the 'gated community' that is developed under the Strata Titles Act 1985 (Act 318 ). In this case, members of residents’ association can lodge a complaint or report to the relevant authorities according to existing law, if there is evidence of fraud and abuse of power by the appointed residents' association. 21

21. Findings From Interviews INTERVIEWEE : PROFESSIONALS (Lawyers, Architects, Valuers etc.) To study and consider public liability issues i.e. public liability and insurance coverage within private roads / compounds. Existing Acts and guidelines pertaining to GACOS are in conflict and inadequate. A need to further review GACOS related Acts for consistency and comprehensiveness. Proposal to establish a separate Act solely for landed strata properties i.e. GACOS 22

22. Findings From Interviews INTERVIEWEE : LOCAL AUTHORITY OFFICIALS All purchasers of GACOS property should fully understand GACOS concepts and its obligations There needs to be a reconciliation between the GACOS maintenance fees and local council assessment rates There needs to be an improved understanding of the related Acts/regulations/by-laws/planning guidelines and better communication between the relevant technical departments of the local authority / OSC An application for GACOS needs to be submitted under STA in concurrence with TCPA and BCPA, while its building plans have to be in compliance to UBBL. The community and social impact assessment of GACOS is required GACOS living is not traditional to the local culture; its market is driven primarily by security concerns while its affordability is ranged beyond average income earners. 23

23. Findings From Interviews INTERVIEWEE : DEVELOPERS More equitable and pragmatic guidelines are needed for determining share units of landed strata properties comprising units of different land and built-up sizes for various types of houses. Review needed of assessment rates in consideration of the maintenance fees collected for the private management and maintenance of GACOS common properties and services. Regulations / guidelines requiring minimum GACOS facilities and amenities. INTERVIEWEE : ACADEMICS The authorities need to conduct extensive awareness programme to educate industry players and general public on the requirements of the Acts and guidelines pertaining to GACOS. 24

24. To Conclude GACOS looks set to stay and become a permanent feature of the housing industry in Malaysia. It is one housing concept that can contribute effectively to the creation of safe living environment conducive for the residents. The implementation of this concept should comply with appropriate guidelines and regulations with an ultimate view to protecting the rights of residents. The implementation success of this concept will receive a boost if local authorities and those involved in the building and planning of physical environment of the area adopts a cooperative stance with the community for whom the concept is intended to benefit, mainly. 25

25. To conclude Finally, it is likewise important for residents and purchasers of GACOS development to realise the need to co-operate with the authorities and other stakeholders to ensure success in building sustainable gated and guarded communities. 26

26. TERIMA KASIH -THANK YOU