1 LAND OWNERSHIP IN MALAYSIA: LEGAL DOCUMENT OF TITLE

        In Malaysia, ownership of land is registered in accordance to the Torrens System and all transactions thereafter are also endorsed. The documents to prove ownership are referred to as Titles (sometimes Land Grants as well).

              All lands alienated after the implementation of the National Land Code 1965 (NLC) are held under Registry Title or Land Office Title (Sections 77(1)a NLC). Generally Registry Titles are titles (and subsequent Titles in Continuation) for land exceeding 4 hectares (10 Acres). Whereas, Land Office Titles are titles for originally alienated lands not exceeding 4 Hectares (10 Acres).

  1 MATTERS ON LAND USE & CONVERSION

       All lands alienated after the implementation of the National Land Code 1965 (NLC) are held under the categories of Agriculture, Building or Industry (Section 52).

              Owners of any land can apply for the conversion into the category of Building or Industry. Generally, most states in Malaysia have Structural Plans and most districts have Local Plans which outline the zones which new land use are permissible.

              The provisions laid out in Sections 124A or 204D of the NLC are applied when owners wish to apply for conversion of any piece of land. The methodology differs somewhat depends on which Section is used but the end result of the land being converted and subdivided remains very similar.

     - CONVERSION PREMIUMS

       With relation to Land Conversion Premiums, all states differ in their premium calculations as land matters are wholly under the purview of state governments. According to a comparison done by the REHDA (Real Estate & Housing Developers Association of Malaysia), the Johor premium method of calculation is the most ‘business-friendly’ and arguably the lowest premium in Malaysia. An excerpt of the Government Gazette is attached here for your perusal. (Pages 432-434 of the Johor State Gazette J. P.U. 94)

              Most states base the premium calculations on valuations by the Department of Valuation & Property (Jabatan Penilaian & Perkhidmatan Harta in the Ministry of Finance). In Johor, the premium calculation is based on a per unit cost (ie. The premium for a double storey terrace house is RM250 in Item 2.2 on page 432) as shown in the excerpt attached which gives it predictability.

               We have endeavored to outline the sections in the NLC usually applied when converting land and in the second part the premium calculations after a piece of land has been approved for the categories applied for.

       - QUALIFIED TITLES / FINAL TITLES

       Qualified Titles (QT)are legal documents of ownership issued in advance of survey. Chapters 2 & 3 of the NLC deals with the various types of  QTs. Generally, in the original approval for land ownership, a QT is issued & registered as a legal document of ownership and has all the rights of dealing (including to effect transfers, leases, charges, etc). However, the areas shown on this type of QTs are only provisional and owners or buyers should be wary of this fact. There are often cases where the final approved lot area differs quite significantly from the provisional area stated on the QT. It is advised that owners or potential land buyers refer to Licensed surveyors like us or the Jabatan Ukur & Pemetaan.  The standard sheets (Syit Piawai) and Approved Plans (Pelan Akui) can be referred to in order to verify the area.

               Whereas, Final Titles (FTs) are QTs that have been confirmed by way of survey and the areas shown in the FTs are no longer provisional but confirmed as well as the final area for the land.

        The principles of Indefeasibility of Title are well explained in Part 20 of the NLC.

      - FREEHOLD / LEASEHOLD FORMS OF TITLE

       Technically, Freehold or Leasehold refers to the term on the title. Freehold means the title is in perpetuity as compared to leasehold which has an expiry date on the title.

        Contrary to common misinterpretation, Freehold land can also mean Malay Reserve (or Chinese Reserve) which is held in perpetuity.

               Leasehold titles have a limited term, usually 99, 66, 50 or even 33 year periods. In recent years, state authorities do not alienate freehold land any more. At the expiry of these terms, the owners may apply to extend the terms of the title. There is a premium to be paid when the applications are approved.

      - PARTITION (PECAH BAHAGIAN) OF LAND

       Under Part Nine, Chapter 2 of the NLC, co-proprietors (co-owners) may apply for the partitioning of the land. Partition is somewhat different from subdivision as every co-proprietor is assigned a sub-lot according to his/her proportion in title and upon approval, his/her portion will be registered under his/her name directly. Previously, each (if agriculture) lot has to be more than 1 acre (2/5 of a hectare). However, the Act has been amended (by Act A1333) to allow partitioning into sub-lots that are smaller than 1 acre. This amendment is hoped to resolve much of co-owned lands throughout the country.

     - SUBDIVISION (PECAH SEMPADAN) OF LAND

       Under Part Nine Chapter 1 of the NLC, the owner/owners may apply to subdivide the land into two or more portions or sub-lots as approved by the relevant authorities.