Land ownership in general

Land ownership is protected by the National Land Code 1956 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 the law (the Land Acquisition Act 1960 (Malaysia) ) and adequate compensation has been paid.

It is important to point out at the outset that, under Section 40 of the National Land Code, every land in Malaysia belongs to the State government. Under Section 43 of the same Act, private individuals and corporate entities may, however, acquire land from the government by way of alienation. The power to alienate land is granted to the State Government under Section 42 of the National Land Code. Such alienation may take the form of leasehold or freehold.

Freehold is alienation or a grant without limitation of tenure: the owner enjoys title to the land forever. Under the Act, this form of grant is described as “grant in perpetualty”, more widely known as grant in perpetuity. Leasehold on the other hand, is a grant with a limited tenure. Under Section 221(3) of the Act, the maximum tenure of a lease is usually 99 years, if it relates to the whole of any alienated land, or 30 years, if it relates to only a part thereof. However, in East Malaysia, such as Sabah and Sarawak, the tenure of a lease could be as long as 999 years.

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

1. (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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