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Putting a stop to illegal land transfers in Malaysia

Saturday, 23 January 2010 11:50pm

©The Star (Used by permission)
THE REAL ESTATE
by ANGIE NG

THE landmark ruling by the Federal Court on Thursday, which held that land transferred by fraudulent means will no longer be legally accepted, is a huge triumph to the champions of “the rule of law” and will hopefully stop the problem of illegal land transfers in the country.

With Malaysia pushing for high economic growth and greater inflow of foreign direct investments, there is too much at stake to allow such blatant disregard for one’s property ownership rights.

It is certainly the right step towards ensuring greater transparency and good governance to create greater confidence among the people and potential investors.

The unanimous ruling by the five-man bench led by Chief Justice Zaki Azmi sitting on the case of Tan Yin Hong vs Tan Sian San and two others, has plugged a loophole in the law that will allow landowners who lost their land through fraudulent means to redeem their right to the property.

The judgement has paved the way for the apex court to depart from its controversial decision delivered on Dec 22, 2000, in the case of Adorna Properties Sdn Bhd vs Boonsom Boonyanit.

In the Adorna case, the three-man panel led by then Chief Justice Tun Eusoff Chin which ruled that a person who had obtained a title, whether fraudulently or not, had a legal claim to the property.

Thai national Boonyanit lost her land in Penang after an impostor, who claimed to be her, obtained a replacement title from the land office.

The land was subsequently sold to Adorna Properties which managed to seek a Federal Court decision to overturn an earlier decision by the Court of Appeal to return the land to Boonyanit.

That judgement meant the law could not protect landowners (even if they can prove the land title is theirs) as long as it can be proven that the purchaser bought the land on good faith.

This resulted in land fraud victims being unable to recover their property.

As one lawyer notes, since the 2000 judgement fraudulent land transfer has become a thriving business and those who are particularly susceptible to such frauds comprise mainly elderly people or illiterates whose land have been left idle for many years.

With Thursday’s ruling, it means that if it can be proven that a title has been obtained by forgery or misrepresentation, then the claim can be defeated.

This will help curb forgery incidents and land scams and protect land owners from being cheated of their property.

It should bring much relief to land owners as there is now a legal recourse for them to reclaim properties that have been fraudently transferred and to seek due compensation.

As the lawyer points out, there are actually two victims – the original purchaser and the subsequent bona fide purchaser who ends up with the land.

The onus is on the land authorities to be extra vigilant when they register transfers of land.

Purchasers must also be careful and do a thorough search of the land title before signing any deal.

*Deputy news editor Angie Ng believes Malaysia has much to benefit from putting its house in order, starting with righting the wrongs that are still around.