Basic Knowledge on the Land System in Malaysia

The Regulatory Statutes
All land matters in Malaysia are regulated by the following legislations, namely:
The National Land Code, 1965
The National Land Code (Penang and Malacca Titles) Act, 1963
The Sarawak Land Code, Cap 81, 1958
The Sabah Land Ordinance, Cap 68 1953
The Strata Titles Act, 1985

The National Land Code, 1965
The National Land Code, 1965 (NLC) was enacted under Article 76(4) of the Federal Constitution on 18th September 1965. It applies only to Peninsula Malaysia. As the principal regulatory statute, it is the main land law in West Malaysia; Sabah and Sarawak, due to reasons of history, retain their own Land Codes. Hence, we have three different laws for three separate parts of the country.

The essence of the NLC is grounded on two basic issues – the various prescribed forms (the instruments of dealings) and registration at the relevant land registries. Since registration is everything under our Torrens system (the system of dealing in land), the NLC, in line with its legislative philosophy, is very much paper-oriented (instrument-oriented). There is a separate law on compulsory acquisition of alienated land, that is, the Land Acquisition Act 1960 (Act 486). The laws on Malay Reservations are not contained in the NLC. These are in the Malay Reservation Enactment and in the Johor, Kedah, Kelantan, Perlis and Terengganu Malay Reservations Enactments.

The National Land Code (Penang and Malacca Titles) Act, 1963
Due to historical reasons, Penang and Malacca practice a system of land tenure and dealing modeled on the English law of property and conveyencing whereby privately executed deeds formed the basis of titles to lands. The National Land Code (Penang and Malacca Titles) Act, 1963 came into force on Jan 1, 1966, thus abolishing the English deeds system in the two states. Effective Jan 1, 1966, with the National Land Code, 1965, the National Land Code (Penang and Malacca Titles) Act, 1963 coming into effect, all the eleven states in Peninsular Malaysia adopt a uniform system of land tenure and dealings commonly referred to as the Torrens system.

The Sarawak Land Code and the Sabah Land Ordinance
Since Sarawak and Sabah adopt their own Land Codes, the system of land tenure and dealings in the two states are grounded on different laws, hence their distinctive characteristics.

The Strata Titles Act, 1985
The law relating to Strata Titles was once codified under the NLC. In 1985, it was excised from the NLC to be rewritten into one separate Act of modest length dealing with specific issues of the law in question, that is the part of the law dealing with Strata Titles.

Meaning of Alienation and Land
All land initially belonged to the State. Then the State allows the use or occupation of land under a title, TOL, or by way of reservation or the extraction of rock material under a permit or any other right under the NLC. Upon alienation, when the title is registered for a piece of land the right over it passes from the State to the person or body named in the title subject to certain conditions. The provisions relating to the alienation of State land are mainly provided in Section 5 of the NLC.

In section 5 of the NLC, “alienate” means to dispose of State land in perpetuity or for a term of years, in consideration of the payment of rent, and otherwise in accordance with the provisions of section 76 or, when used in relation to the period before the commencement of this Act, to dispose of State land in perpetuity or for a term of years under a previous land law.

Also in Section 5 of NLC, it defines that “land” includes

i. that surface of the earth and all substances forming that surface;
ii. the earth below and all substances forming that surface;
iii. all vegetation and other natural products, whether or not requiring the periodical application of labour to their production, and whether on or below the surface;
iv. all things attached to the earth or permanently fastened to anything attached to the earth, whether on or below the surface, and
v. land covered by water

The general rule is that all fixtures attached to the land form part of the land.

Land is also a state matter in Malaysia which only the state Legislature may make laws in respect thereto. In simple words, all land matters come under the purview of the respective state government though the Parliament reserves the right to pass legislation where such legislation is enacted to ensure uniformity of the law and where it concerns national policy.

Land Titles
The end product of alienation is a land title. It serves as an evidence of ownership. With a title, the proprietor can transfer, lease, charge the land or grant right of easement over it. Basically, a land title bears only two particulars – who the proprietor is and which land he owns. However, a number of other particulars are included for certain purposes. For instance, the amount of annual rent, land use conditions and restrictions, registration of land dealing like transfers, leases, charges, caveat, etc.

For easy identification, land titles can be divided into two basic categories, namely the final title and the qualified title.

Final Title (FT) is issued after the land in question has been surveyed by the Chief Surveyor and upon his confirmation that, among other things, the area, the boundaries, the conditions, the category of land use and all the relevant particulars therein are certified as correct.

Qualified Title (QT) confers the same right as a FT except that in the case of land held under a QT, it cannot be sub-divided, partitioned and amalgamated with any other land and no sub-division of the building can be done if it is situated on the land held under a QT unless that the land has been duly surveyed and a certified plan has been approved. QT is provided in the NLC to enable land to be alienated in advance of survey or to enable title to be issued in advance of survey to the individual portions upon subdivision or partition of land or to the combined area upon amalgamation.

FT comprises of Registry Title and Land Office Title, while QT comprises of Qualified Title corresponding to Registry Title and Qualified Title, corresponding to Land Office Titles.

A Registry Title is one that is registered by the Registrar of Titles at the Land Registry. There is a Land Registry in each state and the same is mostly located at the state capital. If the land is alienated in perpetuity (freehold), the Registry Title will take the form of a Grant or “Geran”. If the land is alienated for a term of years (leasehold), the Registry Title will take the form of a State Lease or “Pajakan Negeri”.

A Land Office Title is one whose registration comes under the authority of the Land Administrator at the Land Office of the district. Each district in the country has a Land Office and the Land Administrator is the local registering authority. If the land is alienated in perpetuity (freehold), the title takes the form of a Mukim Grant and in the case of an alienation for a term of years (leasehold), the title takes the form of a Mukim Lease.