Cover Story: Ground tenants a uniquely Penang land custom

HENRY BUTCHER (PENANG) SDN BHD’s valuation reports on part of the land acquired by 1MDB in Air Itam states that there are over 500 squatters occupying these parcels. But these people are not squatters in the usual sense of the word. The local community recognises them as ground tenants and they form a significant part of Air Itam’s population. It is estimated that there are 1,200 to 1,400 ground tenants on the land that 1MDB bought in the area.

What are ground tenants?

“They are tenants of the land, they do not own the land, but they built and own the structures on these lands,” explains Datuk Goh Ban Lee, a senior research fellow with the Penang Institute and a municipal councillor with the Penang Island Municipal Council from 1989 to 1995.

 Ground tenants and the practice of ground leasing hark back to pre-war times. They are unique to Penang, says Goh, whose doctorate was a thesis on land use in Penang.

 The custom began when rich Chinese landowners of yore, like Choong Lye Hock and Chor Bah Say, struck informal agreements with farmers from the mainland to move to their sprawling estates in the then-rural parts of Penang.

 “They wanted the farmers to live on their land and breed animals because their animals’ droppings would fertilise the land and the fruit trees,” Goh says.

 Some were also the poorer clansmen of these tycoons who lived there on the largesse of their more successful brethren.

 To cultivate this symbiotic relationship, landowners would court farmers with attractive rental terms — they were charged next to nothing, or even nothing at all. Goh reckons that even in the last few decades, each household in Air Itam was charged only RM9 to RM12 per month. However, rent collection has very likely ceased, especially since these were informal agreements made orally.

 Today, Air Itam is no longer an agricultural heartland but a bustling small town that boasts its famous signature asam laksa and the Kek Lok Si temple that draws throngs of tourists on holidays.

 Yet, parts of the town seem frozen in time, bound by the ground-leasing agreements and other encumbrances that have compounded over the years.

 Some of the ground tenants’ homes have been upgraded and expanded to house younger generations. Many of the houses now have proper mailboxes, are connected to power lines and water, and have Astro satellite dishes.

 Goh notes that the National Land Code does not recognise ground tenants, so landowners and tenants will have to work out a compensation package outside the legal system.

 “It can be a tricky process as some tenants are choh lor [rough]. Without resorting to threats and violence, the eviction process can be a protracted one as the onus is on tenants to move out,” he says.

 “I once went [along] with a property developer who was negotiating compensation with one of the tenants. He suddenly said, ‘I don’t want to talk anymore, I am going to get my parang,’ so I told the developer, ‘Let’s get out of here!’” he recalls with amusement.

 Goh say there was no proper compensation standard until after the tragedy in Thean  Teik Estate in October 1982.

 Perumahan Farlim (Pg) Sdn Bhd had wanted to transform 370 acres of agricultural land owned by the Khoo Kongsi into a new township. Over 400 families — some of them had been living there for more than three decades — were affected.

 “The developer had offered a $65,000 flat to each affected household and  compensation for loss of crops and farmland [and temporary housing with amenities, or $200 in rental subsidy per month before the flats were completed]. Some of the residents have rejected the offer because they are farmers and flats will be of little use to them,” The Star reported on Oct 30, 1982.

 After the residents lost a court battle to the developer, 300 of them protested against the compensation amount.

 The police and Federal Reserve Unit were deployed to break up the protest. Tear gas was fired and eight people were arrested. It eventually culminated in a showdown between the estate residents and workers of Perumahan Farlim (Pg) Sdn Bhd that left a woman dead.

 It is interesting  that in its 2011 and 2013 valuation reports, Henry Butcher Penang’s estimated compensation amount was only RM70,000 per household, compared with the RM65,000 flat offered as compensation in 1982 .

 Goh thinks a more realistic sum should be at least RM150,000.  Some may argue that this is barely enough for them to relocate, given the high cost of Penang’s real estate today.

  But there must be a compromise between both parties, he says.

 “The land owner must pay more, but the ground tenant must also accept that they do not own the land,” he points out. “The process will definitely be a protracted and complicated one.”

Some of the ground tenants’ dwellings in Air Itam include semi-concrete houses and those on hillslopes

Some of the ground tenants’ dwellings in Air Itam include semi-concrete houses and those on hillslopes
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