I believe that when some readers saw this title, they were already muttering: “Who doesn’t know the importance of Title (“Nga Lan”). In this article, the author tries to simplify the concept of the importance of Title in the land law of Malaysia.
The word Title (“Nga Lan”) is derived from Malay, the word Geran. I believe that everyone who grows in Malaysia is familiar with what is “Nga Lan”. My parents and elders like to call the land Title as “Nga Lan”.
In the land law, there are two main systems for how to know a person’s ownership of a piece of land. One is the Registration Deed and the other is the Registration of Titles. Registration Deed is an ancient way of registration, and it is very time-consuming and labor-intensive. In the land transfer process, the lawyer must verify the ownership of the land from the first-hand landlord to the current landlord without any break of chain. As for the Registration of Titles, it eliminates these cumbersome procedures; that is, the lawyer does not need to read who the previous landlord or landowner is, but only based on the name registered on the land title to determine whether the seller has a good title to sell the land. To put it in a simpler explanation, Registration of Titles does not require a lawyer to look through the chain of title of a land to determine whether the buyer’s interests are protected.
In the Peninsular Malaysia, the land laws of West Malaysia are governed by the National Land Code 1965 while Sabah and Sarawak have their own land laws. The land code in our country is operated according to the Torrens land registration system. The Torrens land registration system was introduced from Australia and adopted from the Registration of Titles system.
The Federal Constitution states that the jurisdiction of the land lies with the State Government. Therefore, all land-related matters, such as changing of name, charge, lease for more than three years and etc, must be registered with the State Land Office. Each registration process must submit title deed to the state land office for update and if the relevant registration is successful, the relevant matters will be updated on the title deed. Hence by reading the title deed, everyone can clearly know who the landlord of this piece of land is, whether it has been charged to the bank, etc.
Registration of Titles can bring some benefits such as certainty and simplification. When a person buys a house and the title deed is renewed, the title deed is a conclusive evidence to prove that he is the landlord of the land without having to argue with others such as the seller’s family or other relatives.
According to Section 340 of the National Land Code, the Registration of Titles will give the proprietor the indefeasible right. In other words, when the buyer’s ownership or the bank’s charge interest is registered in the title deed by the state land office, their interest are higher than any person or group in the world (unless the government gives you a legal return to acquire your land). However, there are exceptions to everything. If the registration of the land is obtained through fraud, forgery, etc., the indefeasible rights do not apply to the person. For example, if A uses fraud and forgery to deceive B’s title deed, and forge B’s signature to transfer B’s land to A. After B knows it, he can request the land to be transferred back to B through court proceedings. Of course, the condition is that B must provide evidence and convince the judge that the transfer procedure contains fraudulent elements.
The problem that is often encountered in land law cases is that if the landlord’s land is transferred to the so called “fraudster” through dishonesty or fraud, and the fraudster sells or mortgages the land to the bank to obtain a loan, then when the original owner and the buyer or the bank are innocent, who shall own the land? In the case of Tan Ying Hong, the Federal Court ruled that if a person is of good faith and for valuable consideration to obtain the ownership of the land, then he will enjoy the indefeasible rights of the land. This also means that compared with a good faith buyer, the original owner may be permitted to file a lawsuit against the fraudster to obtain monetary compensation. But the reality is that in most cases, the fraudsters have already absconded after getting the buyer’s proceeds.
Of course, there are no perfect system. The significances of the Torrens land registration system are to give certainty; so the buyer only needs to ensure that he obtains the land registration through a legal and proper procedure, and he will enjoy the protection of the law. On the other hand, the landlord needs to ensure that his title deed is not lost to avoid and minimize fraud cases.
In addition, the author would like to explain that many customers will say that their land does not have a title deed. In fact, that is because when the developer is developing a large piece of land, there is only one Master Title for the whole piece of land. Only after the entire development is completed, they can measure the area of each parcel according to the individual units of each house and submit it to the State Land Office to reissue a new individual title to each homeowner. If it is the title deed of the high rise building, we would call it the Strata Title.
Before obtaining the title deed, if the owner needs to sell his house, the Purchaser’s lawyer will verify the owner’s ownership through deed registration and ask the owner to transfer the ownership of the land to a new purchaser. When the State Land Office issues the individual or strata title, it will register the land deed according to the latest list of house owners submitted by the developer.
BY WINSON TAN
Note: This article is for reference only and does not constitute legal advice. Therefore, if readers have any legal questions or needs, they should seek professional legal advice. If the reader suffers any loss by relying on this article, the author will not be held responsible.