Meagre discussion on the institutional property-rights structure essence has rudimentarily determined the POS governance and its quality. Thus, two objectives are highlighted; (i) to examine Sabah’s current practice (rights distribution) in urban-rural POS governance and (ii) explore the POS’ social dilemmas that tied in with such institution. Reviews of interdisciplinary analytic perspectives, content analysis on documents and semi-structured interviews were performed. The practice with diverse property-rights structure is indicatively perceived as “property-rights tragedies”, which ensue in sub-optimal POS and quality of life issues. Therefore, re-engineering of POS market via dynamic property-rights re-assignment is postulated as the panacea for improved wellbeing.