Q.
Notwithstanding any provision in the Federal Territory (Planning) Act 1982 (Act 267), the Commissioner may refuse to grant planning permission or revoke any development order granting planning permission for any development at any time if the development charge in respect of such development or any part thereof remains unpaid. Discuss as to why a developer has to pay the development charge under this Act.
(25 marks, 2012 Q2)
A.
Similar question was asked in: Past Year 2013 Q3.
The question: "Discuss as to WHY a developer has to pay the DEVELOPMENT CHARGE under the Act. What ACT?"
A direct answer to WHY is that the Law says so! Provision of the Federal Territory (Planning) Act 1982 in its Section 40, stipulated the power to levy development charge. And, similar Act of Parliament - the Town and Country Planning Act, 1976, also provides for this power in its Section 32. See below for the comparisons.
This area of law is under the Town and Country Planning Act 1976, which provides the legal framework for the Subsidiary Act - the Federal Territory (Planning) Act 1982.
Furthermore, more detail Rules are drawn out to govern the measurement and evaluation of the developments and thus, levy the development charges. The Town and Country Planning Act 1976, in its section 35 stipulates that State Authority and Local Government (in this case the Federal Territory) can draw out the Rules as to how a development charge be imposed on use of land and modifications to a plan which affects a change of use, density, or floor area in respect of any land so as to enhance the value of the land in the local setting.
See earlier posts on Development Charge and TCPA 1976 in Past Year 2011 Q1 and 2014 Q7.
Federal Territory (Planning) Act 1982 is similar to TCPA in majority cases of the laws, however limited to Federal Territory Kuala Lumpur, Putra Jaya, Labuan and Langkawi. The purpose of the Act is as follows:
"An Act to make provisions for the control and regulating of proper planning in the Federal Territory, for the levying of development charges, and for purposes connected therewith or ancillary thereto."
For the most part, the power is vested in the hands of the Federal Territory Minister.
Section 40 of the Federal Territory (Planning) Act 1982;
40. (1) Where a local plan or an alteration of a local plan effects a change of use, density, plot ratio or floor area in respect of any land so as to enhance the value of the land, a development charge at the prescribed rates shall be levied in respect of any development of the land commenced, undertaken, or carried out in accordance with the change.
Compared it to
Section 32 of the Town and Country Planning Act, 1976,
32(1) Where a local plan or an alteration of a local plan affects a change of use, density, or floor area in respect of any land so as to enhance the value of the land, a development charge shall be levied in respect of any development of the land commenced, undertaken, or carried out in accordance with the charge.
they are similar.
In the above scenario, the development charge being unpaid, the Local Authority, in this case, the Federal Territory Minister or the Commissioner vested with the power by the Minister, has the power to refuse permission for development or revoke development order granted. This is provided under Section 41 (2) of the Federal Territory (Planning) Act, 1982.
However, the remedy for dispute over the development charge imposed can be carried out by way of an appeal. Section 42 - Appeal against assessment of development charge - provides that
42. (1) If any person liable for a development charge is dissatisfied with the order made under subsection 41(1) or (3) he may, within such time and in such manner as may be prescribed, appeal to the Appeal Board.
(2) The Appeal Board may, after hearing the Commissioner and the appellant make such order as it deems fit.
Finally, it is to differentiate Development Charge being tax imposed onto Developer for land development, rather than Annual Value or Improved Value which are taxes collected on property owner periodically (half yearly or yearly) on rentable values of the Property.
The former being a charge on the act of doing things to alter the land or its uses and thus its effects to the surroundings, the latter being a cost of running maintenance in view of managing the buildings as an ongoing matter.
Ref:
Federal Territory (Planning) Act 1982, available at
http://www.agc.gov.my/Akta/Vol.%206/Act%20267.pdf