Titles, Tenures, And Licenses, Oh My! If These Terms Scare Or Confuse You, Read This Definitive Guide To Malaysia's National Land Code Of 1965 By Christopher Chan
The mainland law governing land ownership and tenure in Peninsular Malaysia is the National Land Code 1965 (NLC), which came into effect on 1st January 1965. Sabah and Sarawak have their own sets of laws: the Sabah Land Ordinance and Sarawak Land Code respectively.
The land registration in all states in Peninsular Malaysia is the Torrens system, which is administered by the State Land Offices and coordinated by the Department of Land and Mines.
Types of Titles
1. Master Title
Where a property has not been issued with an individual IDT (Issue Document of Title) or strata title, the property is said to be held under a Master title (otherwise known as a ‘Main title’ or ‘Parent Title’).
Under the NLC, there are two documents of title for a parcel of land:
a) The Register Document of Title, which is the main document evidencing title. This is permanently kept at the Land Office / Registry.
b) The Issue Document of Title is a copy of or an extract from the Register Document of Title and is given to the proprietor of the land.
The Master title generally refers to a comparatively bigger piece of land and is registered in the name of the developer initially. Typically the developer may then continue to submit an application for subdivision of the master title into individual titles and strata titles.
2. Individual Title
This is issued under the NLC for landed property such as land, houses, shop-houses, and factories that are commonly not multi-storey.
3. Strata Title
This is issued to individual units on high-rise or multi-storey buildings. Examples are apartments, condominiums, flats, serviced apartments, and townhouses.
This also includes landed strata titles issued to a housing development under the GCS (Gated Community Scheme) comprising landed properties such as terrace houses, semi-detached houses, and bungalows. This came about via the 2007 amendment to the Strata Titles Act 1985.
Our Strata Title Act 1985 is modelled on the Australian New South Wales Conveyancing (Strata Titles) Act 1961 and the Singapore Land Titles (Strata) Act 1967.
4. Bumiputera Reserve (BR) or Bumiputera Lots
These are land parcels or properties that can only be sold or rented out to Bumiputeras, Malaysia’s predominant racial group.
Bumiputera directly translates to "Son of the Land". Note: Bumiputera does not have to wear cultural clothes daily.
To be considered as a Bumiputera, a person must belong to any of the below criteria:
- In peninsular Malaysia, one is considered a Bumi if one’s parent is a Muslim Malay or Orang Asli.
- In Sabah, one is deemed a Bumiputera if one of the parents is an indigenous native of the state. Another requirement is that the child must be born in Sabah, or the father had lived in Sabah during the time of the child’s birth.
III. In Sarawak, one is regarded as a Bumi if both parents are indigenous natives of the state.
Typically, there are Bumi units or lots in every new development, and a certain percentage (Bumi quota) of the properties can only be sold or leased to Bumiputeras. Property buyers, particularly buyers of resale homes, should be mindful of this, as such units can only be transferred to Bumis. The only way Bumi lots can be sold to a different ethnic group is to obtain the approval of the state to release the units to the open market.
Tenure of a Property Title
The tenure of a Property title can either be:
a) Freehold: held in perpetuity; OR
b) Leasehold: The land belongs to the state and the NLC under section 76(a) provides for a maximum period of lease not exceeding 99 years. At the expiry of the term, (unless the lease is renewed), the land reverts to the State Government.
So... Freehold = Property belongs to the owner ... Leasehold = Property belongs to the government and is lent to the owner
Temporary Occupational Licence (TOL)
This is granted by the State Authorities for a certain period of time. The occupation of the land is temporary and is given a licence to do so. This is done to avoid socio-economic as well as legal problems that might result from squatting and trespassing on State land.