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Putting a stop to illegal land transfers in Malaysia |
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Sunday, 24 January 2010 |
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The Star
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.
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