My-Point-of-View

Review of the National Land Code 1965

9/18/2009 Research & Development Section, Department of Director General of Land and Mines, Putrajaya.

I.M.SHUKRI

1.

INTRODUCTION There have been calls for amendment and review of the National Land Code 1965 (Act 56 of 1966) for many years ago. The Act 56 is, to a large extent, a re-enactment of earlier Land Code 1926, and much of the language remains as it was going back in the nineteenth century. There have been significant additions and amendments to the Code throughout the twentieth century but never a fundamental review of the whole Act. A number of provisions are obsolete or at least obsolescent in part. The National Land Code 1965 (NLC) needs modernisation, and clarification in many areas. There are uncertainties and ambiguities in the language as well as technical and operational problems. In addition, significant issues have emerged over the years that have taxed the minds of academics and the judiciary, not all of which have been resolved. Finally, the NLC was drafted at a time when the registry system was paper based and it now needs to be read with the Fourteenth Schedule (Computerized Land Registration System) and the Sixteenth Schedule (Electronic Land Administration System) respectively, which heralded the introduction of the computer based registry and conveyancing systems. In particular, the review will: (i) ensure the integrity of the land transfer system and make recommendations to improve it; (ii) ensure that the provisions of the Act take into account other developments in property law, both statutory and by judicial decisions; (iii) ensure that the law is certain and clearly expressed, and supply any omissions in it; (iv) examine the adequacy of the provisions concerning state guaranteed title; (v) examine electronic developments and how the law should deal with them. This review will be led by the Department of Director General of Land and Mines (Federal) and will involve active co-operation with the States Land Administration, related Ministries and agencies and
Page 2 of 41

private sectors. The appointed Consultant is required to produce appropriate findings, such as As-Is Report, To-Be Report and together with a draft Bill for a New NLC. The final report should be ready by mid-2013. This paper aims to focus on the overall issues that have been drawn to the attention of the Government and those technical details in the present Act that has identified as requiring review. The first part of the paper covers preambles for this review, the second part focuses on guiding principles for revision, the third part focuses on the possible scope for the review, the fourth part deals with expected solution to be achieved by this review, the fifth part deals with the review management structure, the sixth part intends to provide guiding questions for review framework, the seventh part extracts some of possible examples of changes to be introduced in this review and the eighth part intends to conclude the overall objectives to arrive by this review framework. All parts contain tentative points of options for reform but need to be materialised for observations. Responses to these options and questions will assist in making the policy decisions and drafting recommendations for a new NLC. 2. PRINCIPLES OF REVIEW 2.1 Principles to reengineer the NLC (i) Principles of a modern Torrens land dealing system In view of the new NLC, the principle of the Torrens system could be described as:
First: to provide a complete and reliable register of titles, which will disclose all the facts relevant to each registered proprietors title; to afford protection against the losses which, under common law systems of conveyancing, can result from defects in a vendors or a mortgagors title; and to give a State guarantee of each registered proprietors title.

Second:

Third:

One of the main issues with these principles or purposes is that there is a tension between certainty of ownership
Page 3 of 41

and facility of transfer (sometimes referred to as static security and dynamic security). While the latter promotes the interests of the immediate purchaser, once that purchaser has become a registered proprietor, their ownership of the land is subject to divestment by a fraudster or an instrument that would be void at common law. Another main issue is that, although legal interests can only be created by the State through registration, equitable interests are still recognised. A third is that there are interests that override the register by virtue of other legislation. These issues are addressed in Torrens registration Acts, but not always sufficiently. They need to be taken into account in a new NLC. (ii) Core elements of Torrens land registration Most land registration Acts that were modelled on the South Australian Act of 1861 and indeed many land registration Acts modelled on the so-called English approach have several strong similarities. The main core elements appear to be: the conclusive register and registration as the source of legal title; paramountcy of title for the registered proprietor, subject to exceptions or limits (for example, adverse possession, short-term leases); protection of the bona fide purchaser (for value) who is not affected by notice; protection of registered interests (mortgages, easements, leases); protection for unregistered interests (by caveats, cautions, recording, vesting); Registrars powers of correction of the register;

Page 4 of 41

state compensation for losses as a result of the system or fraud or forgery.

The above elements have developed from the original Torrens registration principles, and in the JKPTGS preliminary view should be retained in any reformed or reengineered NLC. The key principles of a modern Torrens land transfer system might be stated as follows: reliable registration of title to land; a register that is as conclusive and inclusive as possible with regard to each registered proprietors title; certainty and security of legal title to interests in land as far as is possible; protection of equitable title (where it is recorded in the system) as far as practicable; relative simplicity and efficiency of transfer of title; State compensation for loss of title due to the system.

(iii) Legislative drafting principles Legislation should be effective, clear and accessible. That depends on good design. Good design is important in ensuring that the policy objectives of legislation are achieved. To this end, the legislation should be structured in a logical way that makes it easy for readers to follow and understand. Our guidelines suggest that material should be arranged in the following ways: substantive matters procedural matters; should come before

the general should come before the particular;

Page 5 of 41

provisions that have universal or wide application should come before provisions that have limited application; administrative and procedural provisions should be located after substantive provisions so as to give prominence to what is important to readers. Readers should not have to read through provisions that set up bodies and define their functions and powers before they reach what really matters.

(iv) The policy objectives It is the intention of this review to improve the current system of land administration by developing land legislative reforms and institutional principles from existing procedural practices and institutional arrangement, with a focus on enhancement of land matters delivery system, in order to achieve Sustainability, Affordability, Operational Efficiency and Good Practice on sustainable development for the country. (see Figure 1)
Figure 1: Evolution Of Land Administration System By ICT Perspective
1970 1980 1990 2005 2010
i-Land
Spatially Enabled Government & Private Sector

Manual Systems Hardcopy Titles, Maps and Indexes

Computerization DCDB & Indexes

Online Land Administration

Web Enablement

eLand Administration Interoperability

Evolution of land administration worldwide 1966 1980

Computerization Land Revenue Collection, CLRS, DCDB & Indexes

2000

2005
eLand Administration Interoperability

2020
i-Land
Spatially Enabled Government & Private Sector

Manual Systems

Hardcopy Titles, Maps and Indexes

Online Land Administration

Web Enablement

Evolution of land administration in Malaysia

The following are the objectives designed to achieve this vision: To improve the roles of Director General of Land and Mines in respect of providing a professional consultancy services locally and globally on land administration matters;
Page 6 of 41

To improve land law policies especially pertaining to the procedural land management, land dealings and land tenures; To create greater coordination between all three levels of government: federal, state and local. To develop the integration of the Federal governments Cadastral Data Management System (CDMS) and the future state governments Electronic Land Administration System (ELAS) which embedded by Computerized Land Registration System (CLRS) and other subordinate land related systems. Focus on capacity building in order to generate a high public profile and interest. Create a system of e-Government allowing for functionality of business to citizen government, intra-government, and intergovernment.

2.2

A possible model for a New NLC A possible model for a new NLC is essentially the current NLC reorganised differently and incorporating the Strata Titles Act 1985. It would be possible to revise the NLC part by part and section by section, guided by the Torrens principles and the principles of legislative drafting outlined above, without considering any overseas models in detail. The aim would be to modernise the language, clarify meanings and settle doubts, remove obsolete provisions, re-position key provisions so they are all in the same part and re-arrange the parts so that less important or little-used ones come at the end of the Act or in schedules. The existing NLC and the Strata Titles Act 1985 should be incorporated. At the same time, changes of substance can be made where reform is considered necessary as a consequence of research and responses to this issues paper. A possible new structure of NLC is outlined in Appendix A.

Page 7 of 41

3.

SCOPE OF THE REVIEW Phase I Focus: Timeline: Tasks: (i) Streamline the statutory forms creation of single point of contact, simple and easy-touse; (ii) Land matters by manual practice of paper based. Land matters by use of computer electronic based. Immediate enhancement of land administration delivery system Januari December 2010

Development of electronic land transaction code; Conversion of titles into electronic environment Electronic application and access to land information Security features at all level of processing to prevent fraud, forgery or misrepresentation

(iii)

Resolving technical issues; Single Land Titles System One Day Titles Delivery Automatic Renewal of Leasehold Alienation by special circumstances

(iv)

Rebranding the JKPTG; Creation of Federal Land Authority with new image and functions towards philosophy Jalinan Korporat Pentadbiran Tanah Glokal
Page 8 of 41

 Deliverables:

Self-governance of corporatized federal lands Centre of excellence in ICT-based in land administration system

As-Is and To-Be Reports. Discussion and Consultation Papers Seminars and Workshops Field Visits Overseas Visits

Phase II Focus: Timeline: Tasks: (i) Integrated land tenure legislation There is a demand for land tenure legislation to be consolidated to make it more accessible to users and make tenure creation less costly and more efficient; i.e, (ii) National Land Code (Penang and Malacca Titles) Strata Titles Act Land (Group Settlement) Act Malay Reservation Enactments Mining Enactments Waqf Enactments Islamic Administration Enactments Town and Country Planning Act Indigenous Peoples Act Small Estates (Distribution) Act Dangerous Drug Act, Anti-Terrorism and Money Laundering Act, Insolvency Act Others Essential Creation of New National Land Code Januari 2011 December 2013

Simple, easy-to-use legislation Some key sections are long and difficult to read and understand. Industry players and
Page 9 of 41

community have legislation that; (iii)

demanded

tenure

is well structured; is written in plain English (and Bahasa Malaysia); is limited to tenure creation matters; has greater standardisation of processes and requirements; and is generally easier to use.

Flexible legislation Examples; Land Court Compensation for loss by insurance principle State Authority assurance fund Option for private title insurance Resolving statutory conflicts overriding statutes, competing provisions, etc

What interests are caveat-able? In personam claims and Torrens title: Options
Land transfer in consequence of fraud and forgery Protection of unregistered interests Recording system of customary land or indigenous land or Malay reservation land Do away with Qualified Titles Vesting by operation of law

Variation of priority and chargees consents Adverse possession for land under the NLC Recognition of strata titles in respect of subdivision of land into land parcels Bringing quit rent separately into strata titles by registration
Deliverables: As-Is and To-Be Reports. Discussion and Consultation Papers Seminars and Workshops Field Visits Overseas Visits
Page 10 of 41

4.

EXPECTED SOLUTION This review seeks for the following expected solution to be achieved as shown in the Figures below:
Social Context
Facilitating Economic, Social, Environmental, Governance Quality of Life

Sustainable Development

Land Tenure
Disposal of land Rights Indefeasibility of Titles Registration of dealings/nondealings

Land Development
Land Use Conversion Subdivision of land Partitioning of land Amalgamation of land Surrender of land Re-alienation of land Abandoned Title

NEW NATIONAL LAND CODE POLICY FRAMEWORK

(Overall Policies)

Land Use
Agricultural Building Industry

Land Value & Taxation Country Context (Federal-State Levels)

Quit Rent Premium Assessment

Institutional Arrangements Capacity Building Education & Research Services to business and citizens Coordinated land information & management systems

Figure 2: Conceptual Architecture for New National Land Code

Figure 3: Five Characteristics To Be Achieved By Future Land Administration System

Page 11 of 41

5.

REVIEW MANAGEMENT STRUCTURE

Law Review Commission

Secretariat: Attorney General

Secratariat: ELAS Steering Committee

Chairman: Chief Secretary (NRE)

Secratariat: ELAS Legislation Committee

Chairman: Director General of Land and Mines (Federal) JKPTG

Consultants NLC Review Team

Secretariat: Seksyen Kajian Penyelidikan dan Pembangunan JKPTG

6.

GUIDING QUESTIONS TO BE ANALYZED INDEFEASIBILITY Q1. Assuming indefeasibility of title is a cardinal principle of the NLC, should this concept be defined in the Act? If so, is either the Tasmanian Act or the Queensland Land Title Act or the New Zealand Land Title Act (listing exceptions) a useful model? Or is the term indefeasibility of title misleading? If so, what might be a better term? Or is it unnecessary to refer to the concept in the new NLC? Should the indefeasibility sections be reworded to reflect their current interpretation or an interpretation more consistent with the objectives of the NLC? If so, how could they be rewritten?
Page 12 of 41

Q2.

Q3.

Q4. Q5.

Should a volunteer be entitled to the same protection as a purchaser for value? Which of the above options do you consider would be most in line with modern Torrens principles and practice in Malaysia?

LAND TRANSFER BY FRAUD OR FORGERY

Q6.

Should a court be able to declare an act to defeat an unregistered interest, by a proprietor who had already registered with no apparent intent to defeat that interest, fraudulent for the purposes of the new NLC? Or should the holder of the unregistered interest rely on an in personam claim where possible? (a) What is the appropriate and desirable scope of fraud or forgery under a Torrens system? Should it be the equitable approach of Malaysian judges, or the stricter more pro-purchaser stance of the Malaysian courts, or somewhere in between?

Q7. Q8.

(b) Should there be a Land Court to be established? Q9. Q10. Should there be a statutory definition of land transfer fraud? If so, should the elements of land transfer fraud as developed by the case law be incorporated into the legislation? Or, should an interpretation based on the Nova Scotia definition be adopted? Or, should a definition be left to be developed further by the case law?

Q11.

Q12.

IN PERSONAM CLAIMS

Q13.

Is an in personam claim an exception to indefeasibility, or a parallel jurisdiction? If the latter is conceptually more accurate, is there nonetheless a risk to Torrens title that should be controlled?
Page 13 of 41

Q14.

If so, should the boundaries of the in personam jurisdiction be left to judicial development, or created though legislative reform? Would the three requirements for a valid in personam claim set out above have the effect of preventing significant inroads into Torrens principles? If so, should those three requirements be included in the new NLC?

Q15.

REGISTRARS POWERS OF CORRECTION

Q16.

Has the electronic system changed the circumstances in which there is need for the Registrar to exercise his or her powers?

Q17. Should the extent of the Registrars powers in relation to the word wrongfully be clarified, and if so, how? Q18. Are there situations where it would be appropriate for the Registrar to correct a title that has been obtained wrongfully? Should the Registrar be able to make substantive findings as to legal rights or should his or her power be limited to an administrative power?

Q19.

Q20. In what situations might it be appropriate for the Registrar to have a broader power to correct the register? Q21. Which of the options should be adopted? (a) (b) to retain the current position of NLC, but clarify that the Registrars powers are limited; or to adopt a provision that gives the Registrar a broader discretion to exercise powers of correction as, for example, the Registrar has in Queensland.

Page 14 of 41

UNREGISTERED INTERESTS

Q22. Q23. Q24. Q25.

To what extent are there any truly unregistrable interests under the NLC? If so, what are they? How should unregistrable interests be treated in the new NLC? Are there any unregistrable interests that should be able to be registered? Should the protection to non-registered purchasers be reaffirmed, or should the legislation be changed to reflect the orthodox application of the NLC? Should the register accurately reflect or mirror the interests that relate to a particular piece of land? That is, should unregistered interests that affect land be able to included on the computer register? Should there be greater protection for unregistered interests? How should priority of interests be determined? Should Malaysia adopt some form of interest recording system to protect unregistered interests? If so, what form should this system take and what interests should it cover? Are there any other issues to be considered surrounding unregistered interests?

Q26.

Q27. Q28. Q29. Q30. Q31.

CAVEATABILITY OF INTERESTS

Q32. Q33.

What interests should be caveatable? Should a registered proprietor be able to caveat his or her own title?

Page 15 of 41

TRUSTS ON OR OFF THE REGISTER

Q34. Is there a problem with the present provisions for trusts? Q35. If so, should the new NLC provide that trustees can be described as such on the register? Q36. If so, should they be obliged to deposit the trust deed with the Registrar (with a reference on the register) so that it may be searched? Q37. Or, should the new NLC provide for a system of noting restrictions on the register, similar to that in the English legislation? Q38. What would be the practical consequences of a system similar to that in Queensland: (a) for the registry and (b) for the purchaser? Q39. What would be the benefits of registering trusts for beneficiaries? For purchasers? For conveyancers? Q40. What might be the disadvantages of registration for purchasers? Q41. Would the benefits disadvantages? Q42. of registration outweigh the

What would be the practical consequences of a system similar to that in England: (a) for the registry and (b) for the purchaser?

Q43. What would be the disadvantages and benefits of a system of noting restrictions?
OVERRIDING STATUTES

Q44. What sort of interests created under other statutes should be effective against a registered proprietor under the NLC? Should registration affect their validity and be required in order to perfect these interests or should they be able to exist in an unregistered form with a lesser status?

Page 16 of 41

Q45. Are you aware of other examples of statutory provisions that are inconsistent with the NLC? Q46. Should the NLC be amended to more clearly signal to people that other statutory interests may override their registered interest? Q47. Should the matter of ascertaining legislative intention for the purpose of reconciling statutory conflicts be left to the court? Would a clearer guide in the statutory provisions of the particular overriding statute to legislative intention be helpful?
COMPENSATION PROVISIONS

Q48. Has the risk of mistakes and errors in the registration process increased or decreased with the automation of the register? Q49. Is it satisfactory that compensation claims are limited to claims for Registrars errors? Q50. Do provisions of the NLC provide adequate grounds for a claim of compensation? Q51. Do the grounds for compensation need to be more clearly stated? Q52. Do provisions of the NLC provide adequate protection for those suffering loss caused by the gap between lodgement and registration? Q53. With automation of the register, could provision of the NLC be repealed in the future? Q54. Is the procedure in the NLC efficient and fair for the parties involved? Q55. Does cost effectiveness justify giving the Registrar the power to decide the merits of small claims and pay them without reference to Court? Is this a necessary safeguard on the Registrars discretion? Q56. If small claims are to be treated differently to large claims, what should be the ceiling for small claims? Should this be stated in regulations?
Page 17 of 41

Q57. Is it appropriate to retain the NLC exceptions to the right to compensation, or can/should some of these exceptions be repealed? Q58. Is it appropriate to retain the above exceptions to the right to compensation, or should some of these exceptions be repealed? Q59. Should the NLC land legislation codify the exceptions to the right to compensation with an exclusive list? Q60. What is the most appropriate method of measuring damages for a compensation claim under the new NLC? Q61. Should the measure of damages applicable under the NLC be left to the common law, or should guidance be given in the statute? Q62. Does NLC provide an appropriate method of calculating damages for compensation claims? In particular, should damages be measured as at the date when the claimant was deprived of land? Q63. Should the limitation period of the Limitation Act be reconsidered in respect of compensation claims under NLC? Q64. Should the contributory negligence acts apply to compensation claims under the NLC? If so, should it be listed in the land transfer legislation as qualification on the right to compensation? Q65. If contributory negligence should apply to the compensation regime, should there be any limits to its application? Q66. Is the policy of immediate indefeasibility consistent with a policy of contributory negligence, particularly in cases of third party fraud? Q67. Does the existence of private title insurance indicate problems with the state compensation system? Q68. Should the scope of the compensation scheme be altered in any way?
Page 18 of 41

REVISING THE NATIONAL LAND CODE 1965

Q69. What do you think would be an appropriate model for the new NLC? Q70. Does a model discussed in this paper a useful basis for the new Act? Q71. What provisions of the current NLC might be more appropriately placed in regulations?
TECHNICAL ISSUES

Q72. Should the current provisions describing the register be redrafted, so as to be generic about the format the register is held in and would it be helpful if the register was comprehensively defined in one place? Q73. Is the retention of the term the register appropriate? Q74. Should all or part of the detailed prescription of the computer registers in Fourteenth Schedule and Sixteenth Schedule of the NLC be removed and specified in the Regulations? Q75. Are the current provisions for an electronic workspace facility sufficiently prescriptive? Q76. Tenth Schedule of the NLC is no longer relevant, but is it necessary to provide some other rule to determine priority between simultaneous paper lodgements affecting the same computer register? Q77. Should any parts of Tenth Schedule of the NLC, which are still applicable, be relegated to regulations? If this does happen, should provision for physical presentation be retained in the principal Act itself, so that it continues to have prominence? Q78. Should the Act continue to provide for the requisition option for dealing with defective instruments?
Page 19 of 41

Q79. What provisions in the NLC need to be retained in order to cater for land that ceases to be electronic transactions land? Q80. Are there any other issues that require attention in relation to the register and registration? Q81. The searching and evidentiary provisions should be reviewed and consolidated in the new Act. Are there any particular issues or problems that need addressing? Q82. The specification provisions for NLC forms will need to be reviewed and carried forward into the new Act. Do these need to be retained in the Act or can they be dealt with in regulations? Q83. Should there be different levels of certification, based on the class of permissible electronic instruments? Q84. Should a modern form of qualified title be adopted? Q85. What details should be included in an application for transmission? For example, is it necessary that equities be covered? Q86. How should the issue of statutory declarations be addressed in an electronic environment? Q87. Should the relationship with the Insolvency Act be clarified? Q88. Should provisions relating to vesting of the NLC be retained as stand-alone provisions or be merged with other provisions relating to transmissions? Q89. Is it appropriate to treat a statutory vesting, where the land is clearly specified, as different? Q90. Is there anything relating to charge of the NLC that could be improved? Q91. How could the definition of charge be improved? Q92. Should the new NLC retain a requirement for chargee consent where the instrument consented to extinguishes the charge upon registration?
Page 20 of 41

Q93. If not, should the relevant provisions simply prohibit the registration of such instruments whilst the interest affected is subject to a charge or sub-charge, thus forcing the charge or subcharge to be discharged? Q94. If a consent requirement is retained, should the relevant provisions be clearer as to the fate of the charge or sub-charge upon the registration of the instrument that has been consented to? Q95. Assuming that chargee consent is still required in order to bind that party and avoid problems later if power of sale is exercised, are the current provisions adequate? Should the consent continue to be mandatory in all cases? Q96. Is it sufficiently clear what the essential characteristics are of a lease in renewal or a lease in substitution? For instance, does the term of the lease in renewal have to commence on the day after the expiry of the prior lease or can there be a gap? Must the land be exactly the same, no more and no less? Q97. If a regulatory intervention is necessary, does it need to be at the level of the NLC or would a regulation be more appropriate? Q98. What estates, interests and other matters should be capable of being brought forward from a prior to a new lease? Should this include appurtenant rights? Should it extend to notices or things that are entered on the register but which do not amount to registered interests? Q99. Should the question of why an extension cannot be registered after the lease expiry be investigated further? Q100. Or, are the current provisions adequate and any problems best addressed by education of customers to ensure extensions of lease are presented for registration before expiry, and of land Registry personnel not to reject extensions, if that will cause them to miss that deadline?
Page 21 of 41

Q101. Is it desirable for the new NLC to contain a general provision authorising the updating of the register by the Registrar, independently of a formal application? Q102. If so, in what circumstances would the Registrar be empowered to act on his or her own initiative? Q103. If a specific provision is warranted, does the NLC provide a useful model? Does this require a formal application to the Registrar or is evidence of termination sufficient to satisfy the Registrar a better formula? Q104. Alternatively, is this a non-contentious matter that could be provided for in the NLC Regulations? Q105. Should the new NLC refer explicitly to the creation of various life estates? Q106. Should the NLC be amended to clarify the appropriate instrument for creating life interests in relation to leasehold lands? Q107. Should the new NLC or the new land regulations prescribe the registration requirements for termination of life leasehold lands? Q108. Should there be any other grounds for removal of easements or profit prendre, for example, abandonment? Q109. Should the circumstances that constitute separation of dominant and servient tenements be stated more explicitly? Q110. Is it acceptable to leave it to the Registrar to specify additional criteria for redundancy in relation to easements or should all criteria be set out in the new NLC? Q111. Should the NLC explicitly distinguish between expiry and determination of easements and profits prendre and redundancy of easements? Should redundant easements be provided for in a separate section?

Page 22 of 41

Q112. Should the NLC set out a procedure for applications for entry on the register to the effect that an easement or profit prendre has been determined or extinguished as well as for an easement that has become redundant? Q113. Should there be provision for removal of redundant easements in gross? Q114. Are any other amendments relating to easement of the NLC necessary or desirable?

Q115. Would these Schedules of the NLC be more appropriately positioned within regulations rather than in the new NLC? Q116. Caveats against dealings: (a) (b) (c) (d) Should there be any changes to the particulars required in the NLC? Should any of these requirements be set out in regulations? Should there be a requirement that the registered proprietor be named? Should the instrument can be registered if it does not prejudicially affect the estate or interest protected by the caveat be expressly incorporated? Should the insertion of charge date details in a caveat be mandatory? Should the processes contained in scattered provisions of the NLC be contained in a single provision? Should the prescribed periods be set out in the new NLC or in regulations? Is the second prescribed period sufficiently long? Should the court have the power to extend the second prescribed period?
Page 23 of 41

(e) (f)

(g) (h) (i)

(j)

Should there be a provision that allows an application under the NLC to be withdrawn? If so, how would this operate?

Q117. Role of Registrar in receiving caveats: (a) What should be the role of the Registrar in relation to second caveats, and is this role adequately expressed in the current provisions? (b) Should the responsibility of caveators not to lodge second caveats and the liability for noncompliance be increased? (c) Is it desirable to clarify the role of the Registrar in receiving caveats? Q118. Registrars caveats: (a) Are the criteria for the entry of a Registrars caveat still appropriate? (b) What changes should be made to the section? For instance, is the term improper dealing appropriate? Q119. Adverse possession: (a) Should a registered proprietor be able to stop an adverse possession claim simply by objecting (lodging a caveat) irrespective of the circumstances? (b) If not, should that registered proprietor be required to take active measures to assert ownership or demonstrate that an adverse possessors claim is defective in order to defeat an adverse possession application? (c) Should an adverse possessor be able to apply a second time based on the same adverse possession? If so, after how long and in what circumstances?

Page 24 of 41

(d) Should an equity exception and mistake as to boundaries exception be incorporated into the new NLC? (e) Are the special rules applying to land, which is in the registered proprietorship of persons with legal disabilities, appropriate? (f) Is the qualifying criterion of not less than 20 years continuous possession still an appropriate one? If not, what should that criterion be?

(g) For instance, should adverse possession based on the encroachment of structures over the common boundary (either because of a mistake as to boundary or a seeming abandonment of boundary land by a registered proprietor) be capable of supporting an adverse possession claim? (h) Where occupation by the applicant is inside the title boundaries, are there sound reasons why there should be a different outcome depending on whether the adjoining land is privately or publicly owned? (i) Can a case be made for requiring the survey plan or surveyors certificate as to occupation to be supplied before the application is advertised and notices sent rather than afterwards? Should the practical reasons for dealing with intervening land in the manner currently prescribed override the principle that encroachments by way of mistake as to common boundaries should not be the subject of adverse possession claims? Or should that principle be altered?

(j)

(k) Do the caveat provisions adequately cover all the possibilities? (l) Are there any consideration? other matters that require

Page 25 of 41

Q120. Strata Titles: (a) Should the provisions relating to issuance of strata titles under the Strata Titles Act 1985 be incorporated into the new NLC? And the provisions relating to maintenance and management of strata scheme should be incorporated in the Building and Common Property (Maintenance and Management) Act 2007? (b) What changes can be made to strata titles legislation to align it with electronic lodgement and other modern needs? (c) What other changes would improve strata titles legislation of the new NLC? Q121. Disposal of land: (a) Should the new NLC or the new land regulations prescribe the meaning of special circumstances to provide uniformity of practices by the State Authorities upon alienation of land in perpetuity? (b) What about automatic renewal of leasehold land? How it works? What are the effects to indefeasibility of title? Q122. Electronic Land Administration System: Should the new NLC incorporate the following new features of electronic system to provide uniformity of practices in land administration? For instance; e-Presentation e-Attestation e-Dealings e-Auction e-Transmission e-lodgement / e-submission single title system e-Strata Others
Page 26 of 41

7.

EXAMPLES OF POSSIBLE CHANGES TO BE INTRODUCED In view of this review, Appendix B shows some examples of possible changes to be introduced in the new NLC.

8.

CONCLUSION There is a need to have a good land administration system. The modern cadastre for instance is not primarily concerned with generalized data but rather with detailed information at the individual title to land. As such it should service the needs both of the individual and of the community at large. Benefits arise through its application to: asset management; conveyancing; credit security; demographic analysis; development control; emergency planning and management; environmental impact assessment; housing transactions and land market analysis; land and property ownership; land and property taxation; land reform; monitoring statistical data; physical planning; property portfolio management; public communication; site location; site management and protection. Although land records are expensive to compile and to keep up to date, a good land administration system should produce benefits, many of which cannot in practice be quantified in cash terms. A good land administration system will: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Guarantee of ownership and security of tenure Support for land and property taxation Provide security for credit Develop and monitor land markets Protect State lands Reduce land disputes Facilitate rural land reform Improve urban planning and infrastructure development Support environmental management Produce statistical data

It is pertinent to note that the people to land relationship are dynamic with the result that the land administration and cadastral response to managing this relationship is also dynamic and continually evolving. A central objective of the resulting land administration systems is to serve efficient and effective land markets. Because of sustainable development and technology drivers, modern land markets now trade in complex commodities, however our current land administration systems and the majority of the skills of land surveyors and land administrators are focused
Page 27 of 41

on the more traditional processes supporting simple land trading. I do believe the growth in complex commodities offers many opportunities for land administrators if they are prepared to think laterally and more strategically. There is a challenge to land administration officials to design and build modern land administration and cadastral systems that will better support the creation, administration and trading of complex commodities and particularly use land information to spatially enable not only government but society in general. Unfortunately without these systems modern economies will have difficulty meeting sustainable development objectives and achieving their economic potential.

Director, Research and Development, JKPTG. 20.9.2009

Page 28 of 41

APPENDIX-A DIAGRAM 1: NEW CREATION OF NATIONAL LAND CODE

AS-IS NLC
PART 1
Review and remove as desirable and expedient

TO-BE NLC

DIVISION 1: INTRODUCTORY
Part 1 Part 1(A) Part 1(B) Part 1(C) Part 2 Part 3 Preliminary CLRS DANAHARTA ELAS

PRELIMINARY PROVISIONS Commencement, purpose, interpretation, overview

PART 2

APPLICATION Land to which NLC applies list of interests capable of registration

PART 3 Administration

DISPOSAL OF LAND By alienation

Powers of SA PART 4

By other than alienation REGISTER Register Document of Title

Review and introduce automatic renewal of leasehold

DIVISION 2: DISPOSAL OF LAND

Part 4 Part 5 Part 5(A) Other than alienation By alienation Underground land

Strata Titles Register Form and Content Responsibility of maintaining register Access and searching PART 5 REGISTERATION AND ITS EFFECT Principles of Indefeasibility Exceptions PART 6 EVIDENCE OF TITLE Conclusiveness of register By manual registration By automated registration

DIVISION 3: INCIDENTS & REGISTRATION OF TITLES

Part 6 Part 7 Rent Conditions and restrictions in interest Forfeiture Subdivision, Partition and Amalgamation Powers of Attorney Registers of Final Titles Qualified Titles PART 7
Single Titles System Simplified and easy-touse statutory forms

Part 8 Part 9

Part 9(A) Part 10

By electronic registration COMPENSATION Principles of Compensation

Part 11 Part 12

Exceptions Surrender of Titles

Page 29 of 41

AS-IS NLC
PART 8

TO-BE NLC

DIVISION 4: DEALINGS
Part 13 Part 14 Part 15 Part 16 Part 17 Part 18 General Transfers Leases & Tenancies Charges & Liens Easements Registration of Dealings Restraints on Dealings
Review and introduce indemnity or assurance fund

POWERS OF REGISTRAR Prior registration Upon registration After registration DEALINGS WITH LAND AND INTERESTS IN LAND Transfers Transmission Leases Charges Trusts Tenancies Vesting Easements

PART 9

Part 19

DIVISION 5: SUPPLEMENTAL
Part 20 Indefeasibility of Titles or Interest Co-proprietorship & Trusts Transmission on death and bankruptcy Reversion in absence of proprietor Re-survey of land having natural boundaries Subdivided Buildings (Repealed)

Part 21

PART 10

CAVEATS Registrars Caveat Private Caveat Restraints on dealings

Part 22

Part 23

PART 11
Review and reinstate (strata titles tenure only) and excluding management & maintenance of strata scheme

BRINGING LAND UNDER THE ACT Alienation before commencement of the Act Rent Titles in continuation Replacement of title Conditions and restriction in interest Reversion to State Authority Transmission on death and bankruptcy

Part 24

Part 25

DIVISION 6: GENERAL & MISCELLANEOUS

Part 26 Part 27 Powers of Registrar Searches

Page 30 of 41

AS-IS NLC

TO-BE NLC
Waqf land

Part 28 Part 29 Part 30 Part 31

LA Right of way Survey Registration of statutory vesting Jurisdiction of the Court Power of investigation Power of arrest, seizure and penalties Service and publication of notices Miscellaneous Repeals, Transitional provisions, etc PART 13 PART 12
Establish Land Court

Malay Reservation land Mining land Sultanate land Terengganu Settlement land Customary or Indigenous land Kelantan Settlement land Padi Cultivators Tenure Group Settlement Areas REQUIREMENTS FOR INFORMATION Plans and Survey POWER AND JURISDICTION OF THE LAND COURT GENERAL Administration Federal States Enquiries Appeals Offences Attestation Procedure

Part 31(A)

Part 32

Part 33

Part 34 Part 35

SCHEDULES
First Second Forms Implied conditions applicable to country land alienated or approved for alienation before the commencement of this Act Implied conditions applicable to town or village land alienated or approved for alienation before the commencement of this Act Equivalent or variant expressions relating to padi or bendang

PART 14

Third

Vesting and prohibitory orders Power of Attorney Power of investigation, arrest, seizure and penalties Savings and Transitional Rules by the State Authority

Fourth

Page 31 of 41

AS-IS NLC
First Fifth Officers or other persons to attest execution of instruments effecting dealings under Act Agreements which may be incorporated in leases Repealed Repealed Repealed Repealed Repealed Supplementary provision as to forms and procedure Repeals Modifications for Kelantan Special provision for land subject to the conditions in the Second and Third Schedules Computerised Land Registration System Modification to facilitate the implementation of the Pengurusan Danaharta Nasional Berhad Act 1998 Electronic Land Administration System
Review and remove as desirable and expedient

TO-BE NLC
Special provisions to land under commencement of this Act Country, Town or Village land Land Administrators right of way Expression relating to padi or bendang Agreements incorporated in leases Modifications for Kelantan Modifications for Federal Territory Second Regulations by the Minister Statutory Forms and Procedure Attestation Procedure Computerised Land Registration System Electronic Land Administration System Strata Subdivision Disposal of Underground land Third Repeals and consequential amendments

Sixth

Seventh Seventh A Seventh B Eighth Ninth Tenth

Review and reinstate (strata titles tenure only) and excluding management & maintenance of strata scheme

Eleventh Twelfth Thirteenth

Fourteenth

Fifteenth

Review and extend to

Sixteenth

i-Land

Page 32 of 41

APPENDIX-B SOME EXAMPLES OF POSSIBLE CHANGES TO BE INTRODUCED IN THE NEW CREATION OF NATIONAL LAND CODE NO. 1
1.1

AS-IS NLC Disposal of land

Temporary Occupation License (TOL)

TO-BE NLC

RATIONALE

PROVISIONS OF NLC TO BE
AMENDED OR REVISED

TOL to be abolished and substituted by way of granting lease.

(i) There are cases where TOL had been issued for a period of exceeding one year and its terms is quite similar to lease. (ii) By lease approach, the period of land usage can be extended and subsequently, it enhances the land value. (iii) Under this arrangement All state land could be alienated or reserved. All alienated land could be leased under Part Fifteen Chapter 1. All reserved land could be leased under section 63.

Part Four Chapter 2 (Section 65 69) to be repealed.

NO. 2
2.1

AS-IS NLC Titles

There are two (2) types of titles namely; Registry Title Land Office Title

TO-BE NLC

RATIONALE

PROVISIONS OF NLC TO BE
AMENDED OR REVISED

There will be a single title system, inter alia, Registry Title only. Note: Previously, the proposed single title was passed by Parliament on 27th of June 1984 through Act A587 (s.77A). However, that provision was subsequently repealed on 25th of March 1985. This idea has been adopted by FT Putrajaya [vide section 166A, FT of Putrajaya (Modification of NLC) Order 2001].

(i) To facilitate the administration of Land Office (ii) Doing business with more convenient for public. (iii) Under this arrangement All Land Administrators will be gazetted as Deputy Registrar of Title and Director Land & Mines as Registrar of Titles by virtue of section 12. The existing land office title will be converted to Registry Title through CLRS. A new provision to be incorporated in NLC as to allow conversion from Land Office Title to Registry Title. Titles database will be centralised in PTG Office. All registration of dealings could be presented at any District Land Office in the same State.

(Section 5A) to be amended.

Page 34 of 41

NO.
2.2

AS-IS NLC
Qualified Title (QT) is to be registered first prior to the survey of land and issuance of Final Title (FT).

TO-BE NLC
To abolish the registration and issuance of QT.

RATIONALE
(i) Land database system could be easily updated, accurate and manageable (ii) Under this arrangement All alienated land should have surveyed plan or pre-comp plan. In the case of title in continuation where approval for land development is granted, pre-com plan which certified by the Director of Survey and Mapping shall be used as plan for Final Title. Eventually all alienated land should have a final title.

PROVISIONS OF NLC TO BE
AMENDED OR REVISED

Section 79 (2) NLC (Amendment 2001) to be retained. The whole Part Eleven of NLC (Section 176194) to be repealed and any reference to QT in NLC has to be amended and deleted.

2.3

There are CRDT and CIDT produced by virtue of CLRS operation.

In view of CLRS enhancement, there will be Only CIDT to be printed. Public or Land Office may access CRDT information via land database.

(i) To facilitate the records storage and

minimize the space usage.

Schedule 14 (Section 5A) to be amended.

(ii) In line with centralised titles storage

system. (iii) Under this arrangement a copy of title plan (B1) for the land may be made available at any land office Page 35 of 41

NO.

AS-IS NLC

TO-BE NLC
Only the issuance of first title to be attached with plan.

RATIONALE

PROVISIONS OF NLC TO BE
AMENDED OR REVISED

2.3

QT in continuation as a consequence of land development process, i.e. subdivision of land, etc.

QT in continuation to be abolished.

(i) In view of good land administration system, there is a need to have immediate registration of FT by using surveyed plan or certified precomputation plan. (ii) Under this arrangement The conversion of existing QT to FT would be undertaken by a special task force or through outsourcing

-do-

2.4

N/A

There will be automatic renewal of leasehold land without requiring for application in writing by applicant. Example:
No person claiming under a document of title shall, in the absence of contrary provision contained in that document of title, have any right, to any renewal, whether upon the same conditions or otherwise, of the estate or interest thereby secured:

(i) By operation of current NLC, there is no guarantee that applicant will get back his land lease upon surrendering it to State Authority for renewal or extension of leasehold. (ii) Enhance the land value and provide a continuous security of tenure.

To incorporate new provision in the NLC.

Page 36 of 41

NO.

AS-IS NLC

TO-BE NLC
Provided that the Director may, upon such terms and conditions as he may impose, re-alienate the land covered by the document of title to the person who is the registered proprietor thereof

RATIONALE

PROVISIONS OF NLC TO BE
AMENDED OR REVISED

2.5

In relation to indefeasibility of title or interest, there is no compensation or indemnity for loss in consequence of fraud or forgery.

There will be an assurance fund to compensate the innocent persons who deprived their rights or interest over land in consequence of fraud or forgery of misrepresentation.

Incorporating the third principle of Torrens system (that is insurance principle) into Malaysian land legislation.

To incorporate new provision in the NLC.

3
3.2

Dealings and Forms

All land dealings are restricted to a particular Land Office only. All land dealings are allowed to be presented at any Land Office within the same State. (i) To facilitate public expectation. (ii) In line with the development of ICTbased land administration system nationwide. (ii) Under this arrangement Registration could be done electronically at any Land Office in the same State. Section 292(2) to be amended.

3.3

Forms for land dealings can only be attested by qualified persons as prescribed in Schedule 5 NLC.

The qualified persons for attestation to be extended to government officer in Management and Professional level.

To facilitate delivery system and meet the public expectation. Reduce burden of land administrator.

List of attesting officer in the Fifth Schedule to be extended.

Page 37 of 41

NO.

AS-IS NLC

TO-BE NLC
Exception: However such an extension does not applicable to Malay Reserved Land.

RATIONALE
In Western Australia any person age 21 years old and above who free from any criminal record is allowed to attest a document. In Malaysia, section 2 of the Age of Majority Act 1971 provides that age of eighteen as the age of majority.

PROVISIONS OF NLC TO BE
AMENDED OR REVISED

3.4

Private and official title search only available at Registrar Office or a particular Land Office.

Title search can be made online at any Land Office in the same State. Remote title search can be made online for the registered customer.

(i) To facilitate the public needs and professional bodies or agency in which they are involved in real estates or land business. (ii) In DOLA Australia, title search can be done in 4 ways: a. Search counter b. Phone and fax c. Website d. E-mail

Section 384 to be amended.

Page 38 of 41

NO.

AS-IS NLC

TO-BE NLC

RATIONALE
(iii) Under this arrangement By given an access code, a customer may obtain title search through a PC (workstation) which will be made available at every Land Office upon payment of a prescribed fees. A customer may order for a search via e-mail, fax machine or by post where payment can be made by using credit card. A successful search can be sent to applicant through fax or by post (whichever appropriate). Registered customer may access for a search through their PC with the application software which provided by the Land Office upon subscription and registration. The certificate of title search can be issued in the form of computer printout through CLRS or ELAS.

PROVISIONS OF NLC TO BE
AMENDED OR REVISED

Page 39 of 41

NO. 4
4.1

AS-IS NLC Land Development

There are multiple types of application for land development, i.e; (i) Change of conditions s.124 (ii) Change of conditions and subdivision s.124A. (iii) Subdivision s.135. (iv) Partition s.140. (v) Amalgamation s.146. (vi) Surrender and re alienation s.204A-s.204H. (vii) Surrender and re alienation s.203 (country land).

TO-BE NLC

RATIONALE

PROVISIONS OF NLC TO BE
AMENDED OR REVISED

There will be only two types of application for land development; That is by section 124 and 204A204H only.

Flexible, simple, easy to-deal with land matters for land development. Avoiding confusion among users. Under this arrangement Any endorsement or memorial which is enforceable at the time of surrender shall be carried forward into the new title.

The whole Part Nine (Chapter 1, 2 and 3), Sections 203 and 204 to be repealed. Sections 204A-204H to be amended.

5
5.1

Land Revenue
There are different rates for late payment penalty in States Land Rules. There will be a uniformed, simplified and standardised rate and computation of penalty (i.e. 10% of rent rate) To simplified the computation of late payment penalty. Under this arrangement Any provisions relating to penalty in SLR has to be repealed. All States will have a standard and uniform computation rate of penalty. To incorporate a new provision in NLC.

Page 40 of 41

NO. 6
6.1

AS-IS NLC Survey

N/A

TO-BE NLC

RATIONALE

PROVISIONS OF NLC TO BE
AMENDED OR REVISED

There will be one day Certified Plan for one day Title delivery.

Flexible, easy to-deal with land matters at Land Office and Survey Department. Avoiding red-tapes, cost effective and userfriendly. Under this arrangement e-submission to be introduced (by upgrading the concept field to finish)

Section 396 to be amended.

Page 41 of 41