Private Lease Scheme in Malaysia: Buying Without an Individual Strata Title
Under a private lease scheme (PLS), the registered proprietor grants a long lease to a master developer, the developer grants you a sub-lease registered against the master title, and you sign a Lease Purchase Agreement rather than a statutory sale and purchase agreement. You do not get an individual strata title, and you are not a proprietor. This is a live dispute, so every claim below is attributed: on 29 April 2025 the Court of Appeal held a private lease scheme valid, but that case concerned a ministerially exempted Medini project and should not be read as a general blessing. Here is what the structure gives you, what it costs you, and what to ask before you sign.
Short answer
Buying under a private lease scheme gives you a registered sub-lease against the master title, not ownership, and no individual strata title is issued; you sign a Lease Purchase Agreement rather than a statutory sale and purchase agreement. Section 221 of the National Land Code caps a lease at 99 years for the whole of the land and 30 years for part of it, and section 228(1) leaves extension to the lessor’s discretion. On 29 April 2025 the Court of Appeal upheld one such scheme in Medini, but that project had a ministerial exemption and the ruling does not extend to private lease schemes generally.
Key numbers at a glance
| What you acquire | A registered sub-lease (Form 15A), not proprietorship |
|---|---|
| Strata title | None issued; buyer is not an MC member and has no vote |
| Term limits (NLC s.221) | 99 years for the whole of the land; 30 years for part |
| Extension (NLC s.228(1)) | At the lessor's discretion, usually on payment of a premium |
| Protection for a registered lessee (s.340(1)) | An indefeasible interest in the land |
| Court of Appeal | Upheld 29 April 2025, for a ministerially exempted Medini project |
| Medini master lease | 99 years, 15 April 2013 to 14 April 2112 |
| IIB conversion premium | About RM8 per sq ft GFA undeveloped; RM10,000 per completed unit (commercial offer) |
Key points in 30 seconds
- A PLS buyer gets a registered sub-lease against the master title, not ownership. The Edge describes such buyers as “not the owners”, with “significantly less security and rights” than a standard leasehold property.
- National Land Code section 221: a lease is a dealing exceeding 3 years; the maximum is 99 years for the whole of the land and 30 years for part of it. A lease is registered on Form 15A.
- Section 228(1): extension is at the lessor’s discretion. There is no state mechanism to apply to, as there is with a state leasehold, and the land reverts to the proprietor at expiry.
- Section 340(1) gives a registered lessee an indefeasible interest, which is the developers’ main defence. A 2022 academic paper argues a lease over a parcel in a multi-storey building is a lease of “part” of the land and so capped at 30 years — a point no court has decided.
- On 29 April 2025 the Court of Appeal reversed the High Court and upheld the private lease scheme at The Meridin @ Medini, holding the developer had reasonably relied on a Ministry of Housing exemption granted in September 2011.
- What the Court did not decide: it dealt with a ministerially exempted Medini project, not private lease schemes generally, and it did not resolve the 30-year versus 99-year argument.
- Separately, Iskandar Investment Berhad has offered a commercial conversion out of PLS at roughly RM8 per sq ft of gross floor area for undeveloped land and RM10,000 per completed unit. That is a commercial offer, not a regulatory abolition.
What is a private lease scheme, and how is it different from owning a title?
Start with the structure. In the Medini case, the registered proprietor of the land is Iskandar Investment Berhad. IIB grants a long lease to a master developer, and the developer registers a sub-lease of each unit against the master title and sells that to the buyer. What the buyer signs is a Lease Purchase Agreement, not the statutory Schedule G or H contract prescribed under the Housing Development (Control and Licensing) Act 1966.
| Freehold | State leasehold | Private lease scheme | |
|---|---|---|---|
| Your status on the register | Proprietor | Proprietor until the term expires | Lessee |
| Individual strata title issued | Yes | Yes | No |
| Who you apply to for an extension | Not applicable | The State Authority, on payment of a premium | A private lessor, at its discretion |
| Member of the management corporation | Yes | Yes | No |
| What you sign | Statutory SPA for a new unit | Statutory SPA for a new unit | Lease Purchase Agreement |
The Edge (28 January 2025) describes the PLS as “a private sector creation that is essentially a contract between a seller (lessor) and a buyer (lessee)” with “no guarantee of lease renewal or extension”; buyers “are not the owners”, and the arrangement “offers significantly less security and rights to the buyer compared with a standard leasehold property”.
What does a registered lease under the National Land Code actually give the buyer?
A registered lease is not nothing. It is a registrable interest recognised by the Code and entered on the title using Form 15A. The sections below are from the National Land Code; the reading of them draws on ASCO Law’s note and the 2022 academic paper.
| Section | What it does |
|---|---|
| Section 221 | A dealing exceeding 3 years is a registrable lease; three years or less is a tenancy and is not registrable. Maximum 99 years for a lease of the whole of the land; maximum 30 years for a lease of part of the land. |
| Section 225 | A lessor may not grant overlapping leases of the same land to different persons. |
| Section 228(1) | A lessee may apply for an extension, but granting it is at the lessor’s discretion. |
| Section 340(1) | A registered lessee acquires an indefeasible interest in the land. |
- Section 340(1) is the developers’ strongest point: a registered sub-lease is more than a private contract — it is an interest entered on the register and protected by the Code.
- But the term is contested. The 2022 paper in the Journal of ASIAN Behavioural Studies argues that where the lease is of a parcel in a multi-unit building, that is a lease of part of the land, so section 221 caps it at 30 years rather than the 99 years sold to buyers, and questions the validity of such sub-leases on that basis.
- That is an academic argument, not settled law. The 2025 Court of Appeal decision did not address the 30-year point (see the next section). Until a court rules on it, both positions are arguments.
- Remaining term affects valuation and loan tenure, exactly as it does with a leasehold title — see freehold versus leasehold: remaining tenure and bank financing.
The cost is not one number, it is lost optionality: no strata title, no vote in the management corporation, letting and resale possibly needing the developer’s consent, a smaller buyer pool, no published bank policy, and renewal at a private lessor’s discretion. Malay Mail reported around 170 Singaporean buyers caught in the dispute, some having paid up to S$275,000 and litigating since 2022. One written question before signing avoids all of it.
Ask Louis directly
Send me the project name and a photo of the first page of the contract you were given, and I will tell you whether it is a Lease Purchase Agreement or a statutory SPA, and whether an individual strata title is coming.
Send me the project name and I will check for free whether it is sold under a private lease scheme or with an individual strata title, and give you the eight questions to put to the developer on one page you can take to the sales gallery.
Why are some Johor and Medini projects sold this way?
The answer lies in Medini’s unusual regulatory package. As reported by The Edge and EdgeProp, Medini was given no bumiputera quota, no affordable-housing obligation, no minimum purchase price threshold for foreigners, and an RPGT exemption.
- The Edge reports that “the original intention of the PLS in Medini was to prevent foreigners from owning properties in perpetuity”.
- So the lease was the trade-off: foreign buyers could buy below the state’s usual thresholds — Johor’s general foreign minimum is RM1 million, and RM2 million for landed homes in designated zones — in exchange for a lease rather than ownership.
- For the developer, the structure also keeps control of the scheme. EdgeProp and The Edge report that buyers “are unable to rent or sell their properties without the developer’s permission”.
- And at expiry? EdgeProp’s account is that the land “will revert to IIB as the transaction was merely a lease transaction”. A private developer has no statutory obligation to renew, unlike a state leasehold.
Two qualifications matter. Not every Johor project is a private lease scheme, and not every Medini project is still sold this way — The Star reported in January 2025 that IIB was offering a route out. The only documents worth relying on are the ones for your project.
What did the April 2025 Court of Appeal decision settle, and what did it not?
This is the most important judgment on the subject, and its scope is narrower than the headlines suggest. The facts below come from The Edge (22 May 2025) and the case note by Halim Hong and Quek (11 June 2025).
| Item | Detail |
|---|---|
| Date of decision | 29 April 2025 (The Edge) |
| Case | AP Tropika Istimewa Development Sdn Bhd v Wong Hang Fah & 106 Others, Civil Appeal No. W-02(NCvC)(W)-1552-10/2020 (HHQ’s caption); The Edge reports it as Tropika Istimewa Development Sdn Bhd against 107 property buyers |
| Project | The Meridin @ Medini, Iskandar Puteri, Johor |
| Outcome | The High Court was reversed and the private lease scheme was held valid |
| The purchasers’ argument | That the arrangement breached the Housing Development (Control and Licensing) Act 1966 and its 1989 Regulations |
| The reasoning | The developer was a “second actor” relying on validly issued exemptions, applying Obata-Ambak Holdings v Prema Bonanza; the scheme had been approved by the Ministry of Housing and Local Government in September 2011; and a challenge to an administrative decision must be brought by judicial review, not as a collateral attack in civil proceedings |
| The underlying land | A 99-year lease to Medini Land Sdn Bhd from 15 April 2013, expiring 14 April 2112 |
What the decision did not settle
- It is not a general endorsement of private lease schemes. HHQ’s note states the decision validates private lease schemes specifically for ministerially exempted projects within special economic zones such as Medini, not universally. If the project you are looking at is elsewhere and has no equivalent exemption, this judgment does not automatically protect you.
- It did not decide the 30-year versus 99-year argument. The section 221 point about a lease of “part” of the land was not among the issues on appeal.
- It sits against earlier authority going the other way. The 2022 academic paper states that courts had “consistently found that PLS violates the mandatory Sale and Purchase Agreement requirements under the Housing Development Regulations 1989, rendering such arrangements void”. Both lines exist; check the date and the project before you rely on either.
- No current KPKT position was found. As at September 2026 I could not find any circular or ministerial statement from the Ministry of Housing and Local Government on private lease schemes after that 2011 approval. Treat any claim that the ministry has “banned” or “endorsed” PLS as unverified.
The parallel commercial track: IIB's conversion offer
- The Star (20 and 21 January 2025) and The Edge report that IIB has offered conversion out of the private lease scheme to freehold or strata title, at premiums of around RM8 per sq ft of gross floor area for undeveloped land and RM10,000 per completed unit, with discussions dating back to 2020.
- This is a commercial offer by IIB, not a regulator abolishing PLS. Whether it covers your block, who pays the premium and when it completes are all questions for the developer to answer in writing.
What does it mean for financing, resale and inheritance?
Financing
- A lender’s security is a charge or assignment over the leasehold interest, not a charge over an individual strata title. Nazmi Zaini Chambers’ overview identifies “financing obstacles” and “uncertainty over reversion” as the practical problems with the structure.
- I could not find any published bank policy on lending against a private lease scheme, so there is no margin-of-finance figure in this article. It is a credit decision at each bank. Before you pay a booking fee, take the project name to two or three banks and ask for the answer in writing.
- Remaining term drives loan tenure and valuation, the same way it does for leasehold — see freehold versus leasehold and bank valuation and transacted prices.
Resale
- What you transfer is the sub-lease, not a title. EdgeProp and The Edge report that PLS buyers “are unable to rent or sell their properties without the developer’s permission”, so read the assignment and letting clauses in the Lease Purchase Agreement word for word: whose consent, what fee, any transfer premium.
- The buyer pool is smaller. Anyone who will accept no strata title and can get a bank to lend is a narrower market, and that shows up in the price when you sell.
- The remaining term shrinks every year. A 99-year master lease running from 2013 has 66 years left in 2046, which is the point at which the next buyer’s loan tenure starts to be affected.
Inheritance
- A registered lease is an interest in land capable of being dealt with, so it forms part of an estate. But it is finite, and whether a transmission to a beneficiary needs the lessor’s consent depends on what the Lease Purchase Agreement says.
- Have your lawyer read the LPA before you make a will, and confirm the procedure and the cost. The general rules are in wills and property inheritance in Malaysia.
- I am not going to promise you that inheritance is straightforward here. It depends on your contract, and developers draft these differently.
Want to see what you can actually buy?
The rules are above; these are the actual homes. Each page lists the projects I am tracking, with published price ranges and the date each figure was checked. Tell me the area on WhatsApp and I will send the current list.
You pay the maintenance fee, but you are not a proprietor
The Strata Management Act 2013 confers its rights on proprietors. A private lease scheme buyer is not a proprietor; they are a lessee.
- The consequence: the buyer is not a member of the management corporation and has no vote at general meetings, while still paying maintenance charges and contributing to the sinking fund.
- That means no formal vote on increases to the charges, on drawing down the sinking fund, or on appointing the managing agent.
- For how strata management is supposed to work — JMB, MC, the Commissioner of Buildings, meetings and disputes — see the Strata Management Act 2013 explained, and for the money see maintenance fees and the sinking fund.
- Ask before you sign: how are the charges set, by whom, is there a cap, and how are the accounts made available to residents who are not proprietors?
What to ask the developer and your own lawyer before you sign
First, establish whether the project is a private lease scheme at all
- Ask the salesperson one direct question: “Will this unit be issued with an individual strata title?” Get the answer in writing, not verbally.
- Look at the name of the contract. Are you signing a Lease Purchase Agreement or a statutory sale and purchase agreement under Schedule G or H? Different name, different legal treatment.
- Check the advertising and sales permit and the master title particulars: who is the registered proprietor, and what are the start and end dates of the master lease? For how to check a developer, see checking a property developer: licence and APDL and the KPKT register.
- Put the documents in front of your own solicitor, not the one the developer nominates — see what each lawyer does on signing day.
Ask the developer
- Who is the registered proprietor of the master title, and on what dates does the master lease begin and end?
- How many years is the sub-lease being sold to me, is it registered on Form 15A against the master title, and when will it be registered?
- How is the extension clause drafted? Who decides, how is the premium calculated, and is there a cap?
- Do letting and resale need the lessor’s written consent? Is there a fee or a transfer premium?
- Does this project have a ministerial exemption under the Housing Development Regulations 1989? What is the date and reference of the approval?
- Is there a conversion path to strata or freehold title? Who pays the premium, and is there a written timetable?
- Who sets the maintenance charges and sinking fund contributions, and what say do residents have?
- Which banks have already approved loans on this project, and can you give me a contact there?
Ask your own lawyer
- Is this a statutory SPA or a Lease Purchase Agreement? Do the Housing Development Act protections — late delivery compensation, the defect liability period, the housing development account — apply to me at all?
- Will my interest be registered on the title? If not, what protects me?
- Does the section 221 argument about a 30-year cap on a lease of part of the land affect my 99-year sub-lease?
- If the developer or the landowner is wound up, or the master title is charged, where does my sub-lease rank?
- What happens at expiry? Is there any compensation or reversion clause in the contract?
- Do inheritance, a divorce settlement, or adding and removing a joint name require the lessor’s consent?
- Can I grant a charge over the leasehold interest that a bank will accept? What does the bank’s solicitor say?
- Would the Tribunal for Homebuyer Claims take a claim from me? See the Tribunal for Homebuyer Claims.
Related questions
How do I tell whether a project is a private lease scheme?
Three checks. First, the name of the contract: a Lease Purchase Agreement rather than a statutory Schedule G or H sale and purchase agreement. Second, ask the salesperson in writing whether an individual strata title will be issued for the unit. Third, have your own lawyer check the master title: who is the registered proprietor and what are the start and end dates of the master lease. If those three do not line up, do not pay a booking fee yet. See how to check a developer.
How is a private lease scheme different from a state leasehold title?
On a state leasehold you are still the registered proprietor, you receive a strata title, you are a member of the management corporation, and at expiry you apply to the State Authority for an extension on payment of a premium. Under a private lease scheme you are a lessee, there is no strata title, you are not an MC member, and extension is at a private lessor’s discretion under section 228(1) of the National Land Code. Sales galleries often present the two as equivalent; the difference is who you apply to and whose name is on the register.
Do I still pay maintenance charges, and do I get a vote?
You pay the maintenance charges and sinking fund contributions, but you do not get a vote. The Strata Management Act 2013 confers rights on proprietors, and a private lease scheme buyer is a lessee rather than a proprietor, so they are not a member of the management corporation and cannot vote on fee increases, sinking fund drawdowns or the appointment of the managing agent. Ask before signing how the charges are set and how the accounts are disclosed to non-proprietor residents. See maintenance fees and sinking fund.
After the Court of Appeal ruling, is buying a PLS unit safe?
That is the wrong conclusion to draw. The decision concerned The Meridin @ Medini, a project with a 2011 ministerial exemption, and Halim Hong and Quek’s note states it validates the arrangement for ministerially exempted projects within special economic zones rather than universally. The section 221 argument about a 30-year cap was not decided. If your project is elsewhere and has no equivalent exemption, the judgment does not automatically cover you — rely on your own contract and approvals.
Frequently asked questions
Does a private lease scheme property have a strata title?
No. You get a sub-lease registered against the master title, and you sign a Lease Purchase Agreement rather than a statutory sale and purchase agreement. No individual strata title is issued. The Edge describes such buyers as “not the owners”, with “significantly less security and rights” than a standard leasehold property. Because the Strata Management Act gives rights to proprietors, you are also not a member of the management corporation and have no vote, while still paying the maintenance charges.
How long can a private lease run: 99 years or 30 years?
Section 221 of the National Land Code sets a maximum of 99 years for a lease of the whole of the land and 30 years for a lease of part of it. In practice buyers are sold 99 years. A 2022 paper in the Journal of ASIAN Behavioural Studies argues that a lease of a parcel in a multi-storey building is a lease of part of the land and should therefore be capped at 30 years. That is an academic argument; the 2025 Court of Appeal decision did not address it, so it remains unresolved.
Did the 2025 Court of Appeal ruling make private lease schemes legal everywhere?
No. On 29 April 2025 the Court of Appeal reversed the High Court and upheld the scheme at The Meridin @ Medini in the Tropika Istimewa Development case, on the basis that the developer had reasonably relied on a Ministry of Housing and Local Government exemption granted in September 2011 and that challenges to administrative decisions belong in judicial review. Halim Hong and Quek’s note states the decision validates private lease schemes for ministerially exempted projects within special economic zones such as Medini, not universally.
Can you get a bank loan on a private lease scheme property?
The security a lender takes is a charge or assignment over the leasehold interest rather than a charge over a strata title. I could not find any published bank policy on lending against a private lease scheme, so this article gives no margin-of-finance figure — it is a credit decision at each bank. Take the project name to two or three banks before paying a booking fee and ask for the answer in writing. The remaining term will also affect loan tenure and valuation.
Can I resell a private lease scheme unit later?
You can assign the sub-lease, subject to two practical limits. First, EdgeProp and The Edge report that PLS buyers “are unable to rent or sell their properties without the developer’s permission”, so read the assignment and letting clauses of the Lease Purchase Agreement carefully. Second, the buyer pool is narrower, because a buyer has to accept the absence of a strata title and still obtain financing. The remaining term also shortens each year, which eventually affects the next buyer’s loan tenure.
Why do some Johor and Medini projects use a private lease scheme?
The Edge and EdgeProp report that Medini was given no bumiputera quota, no affordable-housing obligation, no minimum purchase price threshold for foreigners and an RPGT exemption. The Edge states that “the original intention of the PLS in Medini was to prevent foreigners from owning properties in perpetuity”. In other words, foreign buyers could buy below the state’s usual thresholds in exchange for taking a lease rather than ownership.
Can a Medini unit be converted to a strata title now?
The Star (January 2025) and The Edge report that Iskandar Investment Berhad has offered conversion out of the private lease scheme, at premiums of roughly RM8 per sq ft of gross floor area for undeveloped land and RM10,000 per completed unit, with discussions going back to 2020. That is a commercial offer by IIB, not a regulator abolishing the scheme. Whether it covers your block, who pays the premium and when it completes are questions for the developer, in writing.
Sources & verification
- The Edge Malaysia — The end of private lease scheme in Medini? (28 Jan 2025)
- The Edge Malaysia — SEZ private lease scheme valid, says appellate court (22 May 2025)
- Halim Hong and Quek — Court of Appeal affirms validity of private lease schemes in Medini Iskandar SEZ (11 Jun 2025)
- EdgeProp — End of private lease tenure: what happens then (6 Nov 2020)
- Malay Mail — Singaporeans in legal dispute over Johor condo purchases (25 Dec 2024)
- The Star — End of PLS in Medini positive for Sunway (20 Jan 2025)
- Journal of ASIAN Behavioural Studies (2022) — Legal Ramifications of a Private Lease Scheme Property Sale
- National Land Code (Act 828, Revised 2020)
- ASCO Law — Lease agreements in Malaysia (lease vs tenancy, registration)
- Nazmi Zaini Chambers — Overview of private lease schemes in Malaysia
Verified: 2026-09-20. This guide is general information, not legal, tax or financial advice. Rules and rates change — confirm in writing with your lawyer, bank or the relevant authority before you sign.
More in this stage
Louis Koh
11 years in Malaysian property · Johor Bahru & Kuala Lumpur · English & 中文
I help local buyers and cross-border buyers from Singapore with new and subsale property. Every figure in these guides is sourced; when a rule changes, I update the page and date it.
Stuck on this step? Ask me directly
Send me your situation — new or subsale, budget, state, and where you are in the process — and I will tell you what to do next and what to watch for.
Send me the project name and I will check for free whether it is sold under a private lease scheme or with an individual strata title, and give you the eight questions to put to the developer on one page you can take to the sales gallery.
Louis Koh · 11 years in Malaysian property · +60 10-906 6685 · replies 9am–10pm MYT