Land Title

All around the world a land ownership are separated into two methods of ownership which are the Deed System or Torrens Registration System. In Malaysia, land ownership in Malaysia is based on the Torrens System Land Title registration. A person would need to acquire the Land Title based on the National Land Code 1965 of Malaysia in order to own the land. 

The main characteristic of this system is that, land ownership is registered under a land title. Whenever a land is alienated by the State, it will have a land title. When a person holds the said land title, that ownership is deemed indefeasible. What this means is no one can challenge the ownership of the land based on the land title. Once land alienation process and a person is registered as the owner of the land in the land title is completed, only then that same person can transfer the land via a land title to other individuals at the Land Office.

To further understand about Land Title as part of our legal knowledge sharing efforts by ASCO, we will discuss on;

• The importance of land titles

• The difference of a freehold and leasehold land title

• The difference between qualified and Final Title status in an a land title

• What is an issued document title

• What is a Land Office Title

• What is a Registry Title

• Other terms used in relation to land title

The Importance of Land Titles

Ownership of land is usually signified in a land title where the person registered  in the land title is the proprietor of a piece of land. Title to land in Malaysia is proven by a document such as the issue or register document of title. Interest in land, on the other hand, denotes which is less than proprietorship or ownership. Therefore, as a purchaser of a land you would be said to have the title to the land upon the land being registered in your name in the register and issue document of title to the land.

Be that as it may, Land Title has many form and terms related to it. As we will see later, we will see the different terms used in explaining the status and types of Land Title in Malaysia.

The difference of a freehold and leasehold land title

Freehold Land title

Generally, the ownership of a land if it has freehold title is perpetual, or in other words, owners will have no time limit to his period of ownership to the land so long as the owner pays the quit rent.

Leasehold Land title

As for leasehold title, the land ownership of the owner will have a maximum time limit of up to 99 years of period of ownership. What this basically means that you are leasing or renting the land from the government. Therefore, when the leasehold period expires, the leasehold land will go back to the state government unless the owners apply for a renewal of the lease from the state government authorities.

The difference between qualified and Final Title status in an a land title

Qualified Title

Section 5 of NLC 1965 defines “qualified title” as a title issued in advance of survey. A qualified title will be issued before a Final Title. The area of the land is not final and merely provisional. Thus, it is incapable of being subdivided, partitioned or amalgamated. However, under the NLC, a proprietor of a qualified title has the power to lease, charge or transfer the land.

Qualified Title is also divided into two types, Hakmilik Sementara Pendaftar (H.S (D)) and Hakmilik Sementara Pejabat Tanah (H.S (M)). The H.S (D) title means a title which is registered in the State Land Office or Pejabat Tanah dan Galian (PTG). State Land Office is located in each and every state in Malaysia, mainly at a capital city of the state.

Whereas H.S (M) title is categorized under ‘Country Land’ or with less than 4 hectares in area/size. Usually, it is registered in District Land Office, specifically where the land is located.

Final Title

As for a Final Title, as mentioned above it will be issued after a survey on the land has been conducted by the State Authority. With regards to the name of the Final Title, the State Authority will determine under what the Final Title will be issued under.

There are four types of Final Title name that may be issued under which are:

1. Geran;

2. Geran Mukim;

3. Pajakan Negeri; and

4. Pajakan Mukim.

Geran and Geran Mukim titles are designated for freehold land, whereas Pajakan Negeri and Pajakan Mukim titles are for leasehold land. Another point to note is the location of these titles being registered. Final Title of Geran and Pajakan Negeri are both registered with State Land Office which is also in correspondence to H.S(D) title. Meanwhile, Geran Mukim and Pajakan Mukim titles are registered in District Land Office and in correspondence to H.S(M) title.

What is an issued document title

After determining the form of Final Title, the State Authority must prepare two forms of document of title namely, Register Document of Title and Issue Document of Title. A register document of title (RDT) means an actual document or original proof of ownership of the land that is kept at the Registry/Land Office. Meanwhile, Issue Document of Title (IDT) means an ownership title which has been issued to the owner. In other words, it is an individual title.

The duplicate copy of the Register Document of Title issued to the owner of the property contains details of the land namely:

1. Type of land (town/village land or country land);

2. The rent (assessment rate);

3. The current and subsequent owners;

4. Encumbrances and all the conditions and restrictions in dealing with that particular land.

Whenever the titles are issued, the survey plans of the alienated land are attached and it is certified by the Director of Survey and Mapping.

Significances of a Final Title:

1. Certifies the ownership of a property.

2. The issue document of title is indispensable for the purposes of carrying out any dealings in land such as the creation.

3. Has all the recorded transaction for the owner to refer to at any time

What is a Land Office Title

Land Office Title

Based on Section 5, Land Office Title means title evidenced by a Mukim grant or Mukim lease, or by any document of title registered in a Land Office under the provisions of any previous land law.

The Land Office Titles are kept at various land offices depending on the area that the land office covers such as the Kuala Langat land office in Banting, Selangor keeps all the titles related to Kuala Langat area. The Land Office Title is also known as Geran Mukim.

What is a Registry Title

Registry Title Land Title for Town land, Village land, Country Land or any land with more than 4 hectares size in capital city.

Section 77(3)(a) of the NLC states that the land title for town or village land, any country land exceeding four hectares, and any part of the foreshore or sea-bed is classified under Registry Title. A registry title land title shall also include any land situated in capital city of every state with 4 hectares in area/size.

Under the NLC, Section 77(3)(b) provides that Land Office Title for country land shall not exceeding four hectares in area/size.

Other terms used in relation to land title

(a) Master Title

This term is popularly used by the housing sector to refer to a land title that relates to a particular project development that the developer is involved and has yet to be divided into the specific individual land titles that can be transferred to end purchasers and owners. 

Usually the developer continues to holds this title until Strata Title or specific land title to the property parcel purchased is being transferred to the purchasers.

(b) Strata Title

This title will be issued to each parcels of the building or land. When the strata title is eventually issued, the developer will inform the lawyer acting for the current beneficial owner of the parcel as well as the current bank. 

Your lawyer is expected to prepare the transfer form called as Memorandum of Transfer (MOT) to transfer the strata title to the purchaser from the developer (and certain circumstances the original land owner that the developer join-ventured with) and the bank’s lawyer is expected to prepare a charge against the parcel in favor of the lender.

Strata title is not only applied to buildings type of property, it is also applied in a situation where it is a landed property, landed strata title will be issued to landed property built in a gated and guarded housing project with shared common facilities such as swimming pool and garden.

(c) Deed of Assignment

Certain scenarios would entail that a land owner not having a land title. In such circumstances, a Deed of Assignment document is used to vest the land interest to the owner of the Deed of Assignment. 

The Deed of Assignment would allow a land owner pending the issuance of a land title to transfer the interest of the land to another party.

Therefore, it will allow the said owner to convey the land from one party to another even without a land title. However, this must be coupled with a Power of Attorney (a document that grants one individual the authority to act on behalf of another person).