THE call by prominent lawyer Derek Fernandez (‘Derek’) for the repeal of Sections 3(1)(b) and 3(1)(c) of the Land Acquisition Act 1960 (LAA) deserves serious consideration. It goes to the heart of a fundamental question: how far should the State be permitted to exercise its compulsory acquisition powers when the ultimate beneficiary may be a private developer rather than the public at large?
Derek’s position, reported by Scoop on 18 October 2026, is that compulsory acquisition should be restricted to genuine public purposes, such as essential public utilities, rather than extended to private commercial interests under the broad banner of economic development.
His proposal has particular relevance to Malaysia’s proposed Urban Renewal Act (URA), which has generated considerable concern among homeowners over the prospect of losing their properties despite refusing to participate in redevelopment.
The critical question is whether a majority’s consent should provide the legal justification for taking away the property rights of the dissenting minority.
When economic development becomes a justification for taking private property
Section 3(1)(a) of the LAA permits the acquisition of land for a public purpose. Sections 3(1)(b) and 3(1)(c), however, extend the grounds for acquisition.
Section 3(1)(b) allows acquisition for a person or corporation for a purpose considered by the State Authority to be beneficial to Malaysia’s economic development or to the public generally, or a class of the public. Section 3(1)(c) covers land required for mining and residential, agricultural, commercial, industrial or recreational purposes, among others.
The concern is not whether economic development is desirable. Of course it is. The concern is whether the pursuit of economic development should, by itself, justify the compulsory acquisition of privately owned property for projects that may ultimately generate commercial returns for private developers.
If a private developer wishes to assemble land for a profitable redevelopment project, why should the State necessarily be enlisted to overcome the objections of owners who refuse to sell?
Private property ownership cannot mean much if an owner’s right to remain in his or her home can be displaced merely because another party has identified a more profitable use for the land.
This is precisely why Derek’s call for legislative reform warrants public debate.
The 75% threshold: majority support is not unanimous consent
The proposed URA has sought to lower the consent threshold for certain redevelopment projects. Under the 2025 Bill, the proposed thresholds varied according to the age and condition of the buildings, including a 75% threshold for buildings more than 30 years old.
The Bar Council, Malaysia raised concerns about these thresholds and, in particular, the proposed compulsory acquisition mechanism under Section 21(4) of the Bill. It questioned whether securing the required majority should be sufficient to expose the remaining owners to compulsory acquisition.
The distinction is fundamental.
A majority decision may be appropriate for ordinary collective management matters. But redevelopment can permanently extinguish an owner’s existing property rights, disrupt a family’s home and force a person to relocate against his or her wishes.
A homeowner who has paid for a property over decades should not automatically lose the right to decide its future simply because neighbouring owners have accepted a developer’s offer.
Nor does a 75% majority necessarily establish that the proposal is fair to everyone. Some owners may depend on their homes for retirement, some may be unable to afford replacement accommodation, and others may have legitimate concerns about the terms offered, relocation arrangements or the long-term security of their families.
The minority is not necessarily being unreasonable. It may simply have different circumstances and interests.
A majority vote is evidence of majority support. It is not, by itself, proof that compulsory acquisition is justified in the public interest. It should not give the State a blank cheque to use compulsory acquisition against the remaining 25%.
Why should the Land Acquisition Act be used to overcome dissent?
The more troubling question arises when the LAA is invoked against owners who refuse to participate in a private redevelopment scheme.
The proposed URA’s compulsory acquisition provisions drew criticism from the Malaysian Bar, which argued that acquisition should not follow automatically from a developer obtaining the prescribed consent threshold.
The concern is understandable. A developer negotiates with property owners to assemble a site for redevelopment. If some owners refuse to accept the offer, the developer should ordinarily have to continue negotiating, improve the terms or reconsider the commercial viability of the proposal.
If the State can instead be called upon to acquire the remaining properties, the balance of bargaining power changes dramatically.
The developer may no longer need to persuade every affected owner that the proposal is fair. The threat of compulsory acquisition could itself place pressure on dissenting owners to surrender their properties.
This raises an important question of principle: should a law intended to serve legitimate public purposes become a mechanism for resolving private commercial difficulties?
The LAA should not become an instrument for transferring land from unwilling owners to facilitate a project simply because the project has secured majority support.
Enforce existing safeguards and close the loopholes
Derek Fernandez has also drawn attention to Section 3(6) of the LAA, which restricts certain acquisitions under paragraphs (b) and (c) where the original landowner has already obtained planning approval and the acquisition is not for a public utility.
His criticism is that this safeguard has not received the attention it deserves.
This provision should be examined carefully by the relevant authorities, and its application enforced where the statutory conditions are met. Legislative safeguards are of little value if they are overlooked in practice.
At the same time, Parliament should consider whether the wider wording of Sections 3(1)(b) and 3(1)(c) continues to serve a legitimate purpose in its present form.
Repealing these provisions, as Derek proposes, would significantly narrow the grounds on which land can be compulsorily acquired. It would not eliminate every statutory route to acquisition, but it would remove broad grounds that can permit acquisition for private or commercial development.
The State would still retain powers to acquire land for genuine public purposes under Section 3(1)(a), subject to the applicable law and safeguards.
Essential public infrastructure and private redevelopment should not be treated as interchangeable merely because both may contribute to economic activity.
Urban renewal should be based on consent, not coercion
There is no dispute that Malaysia needs a workable approach to ageing buildings, unsafe housing and deteriorating urban neighbourhoods. Residents should not be left indefinitely in buildings that are dangerous or beyond reasonable repair.
But these challenges do not justify treating every ageing property as a redevelopment opportunity that must be pursued regardless of the wishes of its owners.
There are alternatives. Developers can negotiate voluntary collective sales, offer joint-venture arrangements, provide equity participation or structure redevelopment proposals that allow existing owners to share fairly in the benefits. Where genuine public safety concerns arise, the relevant authorities can exercise the powers available under existing laws, subject to the necessary legal requirements.
The objective should be to make redevelopment attractive enough for owners to participate willingly, rather than make refusal futile.
The Government should also ensure that consent is independently verified, offers and redevelopment terms are transparently disclosed, and affected owners have access to independent legal and valuation advice.
If the proposed URA is revived, its provisions should not permit compulsory acquisition to follow automatically from a 75% or 80% consent threshold. The State must establish an independent and legally defensible basis for any acquisition, rather than treating majority support as a substitute for that justification.
Parliament must decide what property ownership really means
The proposed URA was deferred from 2nd reading in Parliament for further improvements. Any future version should address these concerns directly rather than preserve them under a revised legislative framework.
Derek’s intervention provides Parliament with an opportunity to examine a larger problem: whether the existing scope of the LAA gives the State too broad a role in facilitating private development.
The debate should not be reduced to whether urban renewal is desirable. It should address who bears the cost when redevelopment proceeds, whose interests are protected and what safeguards apply to people who refuse to surrender their homes.
Property rights must carry practical meaning, especially when the State exercises powers that an ordinary private developer does not possess.
The Government should seriously consider repealing Sections 3(1)(b) and 3(1)(c), while retaining the lawful ability to acquire land for genuine public purposes. Any proposed urban renewal framework should be redesigned to ensure that private redevelopment is driven primarily by negotiated consent, fair arrangements and transparent safeguards.
Urban renewal should renew our cities, not diminish the security of homeownership. A majority may decide what it wants, but it should not automatically acquire the power to decide what a minority must surrender.
The law should protect both the public interest and the individual’s right to property. Neither economic development nor urban renewal should become a convenient justification for overriding that principle. – October 19, 2026
Datuk Chang Kim Loong is the honorary secretary general of the National House Buyers Association (HBA)