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The Real Estate Law Review: Malaysia

A person owns real estate by registering his or her ownership or interest in the issue document of title. Generally, there are two types in real estate ownership, which can be categorised according to their respective land tenure, namely leasehold and freehold.

A freehold title vests ownership of real estate in perpetuity for an indefinite period within the bounds of Malaysian law. On the other hand, a leasehold title vests the right to real estate for a term not exceeding 99 years.

Commonly granted leasehold tenures are for a period of 30 years, 60 years or 99 years, depending on the state authority’s policies then in place. A leasehold title may require a lengthier process to acquire and dispose as compared to a freehold title as the state authority’s consent is usually required prior to the title registration.

Leasehold tenures are mostly renewable with payment of a premium to the state authority. As such, generally, the transaction price of freehold real estate is higher as compared to leasehold real estate due to the land tenure and the conditions on the title required prior to real estate acquisition and disposal.

In Malaysia, we have adopted the Torrens System for a record of ownership and dealings of real estate. Under the Torrens System, registration of title is everything and the indefeasibility of title is guaranteed to the proprietor whose name is registered on the document of title.

The Torrens System allows a proprietor to hold the document of title officially issued by the land authority, with the details accurately described via a proper land survey. The boundaries and exact size of the property will be marked on a plan attached together with the document of title.

The registration of all dealings is done via the statutory forms prescribed under the National Land Code. Consequently, any person who wishes to look for the details of a title, including the ownership, may conduct searches through the respective local land office.

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