Land ownership

There are two types of land ownership recognised by law in Malaysia. The first type is “land held in perpetuity”, commonly referred to as “freehold land”. The second is “land held for a term of years,” commonly referred to as “leasehold land”. The maximum term for the latter is 99 years. Upon the expiry of the period of the lease, the land should be reverted back to the state authority. The owner will then have to either apply for renewal of the lease before its expiry or apply for a fresh alienation if the lease has expired. This will involve the payment of a sum which would be determined by the authorities.

Land ownership is protected by the National Land Code and guaranteed by the Federal Constitution. Under the National Land Code, if a person is a registered owner of a piece of land, his title (or interest) is “indefeasible”.

Indefeasibility of title means that one’s ownership to land cannot be challenged or questioned unless the case falls within one or more of the circumstances mentioned in Section 304(2) of the National Land Code – e.g. where there has been fraud, misrepresentation or so on, when the ownership was acquired.

Land ownership is guaranteed under Article 13 of the Federal Constitution. Simply put, this means that land cannot be compulsorily acquired or used by any one (even by the government) unless it has been acquired in accordance with the procedure laid down in Land Acquisition Act 1960 (Malaysia)  and “adequate compensation” has been paid.

Land ownership carries with it certain duties. Briefly, these are:

1. (a) Paying the annual quit rent to the state authority (in default of which the land can be forfeited by the state authority); and
2. (b) Complying with all the express and implied conditions affecting the land.

Express conditions are those specially endorsed or expressed on the land title while the implied conditions are those stated in Section 115 (agricultural land), 116 (for building land), and 117 (for industrial land) of the National Land Code.

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