Land Tenure and Dealings
This domain examines how land is held from the State and how interests are created, transferred, charged and lost. The focus is tenure classification, restrictions, caveats, charges and compulsory acquisition.
Tenure types
Freehold is an estate in perpetuity. Leasehold is a term of years, commonly 99, 60 or 30 years, and reverts to the State on expiry; extension is possible but not automatic. Malay reserve land and Bumiputera-restricted lots carry dealing restrictions that require approval or are prohibited to non-qualifying persons. Qualified title can later be converted to final title; the register is the authoritative record.
Dealings and priority
The National Land Code provides for transfers, charges, leases, easements, caveats and statutory liens. A charge does not transfer title to the chargee; it is security, and the chargee's remedies include an order for sale. A caveat is a notice protecting a claimed interest; it may be a private caveat, registrar's caveat or lienholder's caveat. It does not by itself prove ownership and can be removed by the registrar or the court.
Consent and acquisition
State authority consent is required for many dealings in leasehold and restricted land, and a restriction in interest can bar dealings without consent. Compulsory acquisition under the Land Acquisition Act 1960 follows Form A and Form D notices, an inquiry, and compensation for market value, injurious affection, severance and costs.
Worked example
A 99-year leasehold lot has 35 years unexpired. A buyer offers a price based on freehold comparables. The valuer should reject those comparables or make a substantial tenure adjustment: the short unexpired term, consent risk, financing constraints and reversion to the State all reduce value. The reasoning is that tenure is a legal limitation on the income and resale potential of the asset.
Traps
- Comparing leasehold with freehold without a tenure adjustment.
- Treating a caveat as proof of title.
- Ignoring a restriction in interest or Malay reserve status.
- Forgetting severance and injurious affection in acquisition compensation.