week 3 National Land Code 1965 (Amended)

INTRODUCTION TO PROPERTY LAW

2.0 NATIONAL LAND CODE 1965 1

MIMI AMIRA BINTI AMRAN

LECTURE CONTENTS 2

CONTENTS

DISPOSAL OF LAND
LAND TITLES & ITS CONDITIONS

DISPOSAL OF LAND 3

DEFINITION OF “DISPOSAL”

Section 5 of NLC define “disposal” as any disposal of land made by the
State Authority in the exercise of any of the powers conferred by Section

42 or any of the corresponding powers conferred by any previous law.
Whereas, “land” is defined under Section 5 of NLC 1965

DISPOSAL OF LAND 4

DEFINITION OF “LAND”
As per Section 5 NLC, “LAND” includes :

The surface of the The earth below All vegetation and All things Land covered by
earth and all the surface and other natural attached to the water;
substances all substances
forming that products, whether earth or
surface; therein; or not requiring permanently
the periodical fastened to
application of anything attached
labour to their to the earth,
production, and whether on or
whether on or
below the below the
surface; surface; and

STATE LAND 5

DEFINITION OF “STATE LAND”
It is define under Section 5 of NLC as “all land in the State (including so much
of the bed of any river, and of the foreshore and bed of the sea, as is within
the territories waters) other than : ”

Alienated Land Reserved Land Mining Land Any Land
which under the
provisions of any
law relating to
forests is for the

time being
reserved forest.

STATE GENERAL POWERS OF 6
DISPOSAL

As the absolute owner of State Land, the State Authority has wide
powers of disposal conferred upon it by section 42 of the Code. These

powers include the power to :

Alienate State Grant leases of To permit the To permit the
Land reserved land temporary extraction and To permit the
removal of rock use of air space
occupation of material from on or above
State Land any land other State land or
than reserved reserved land.

forest and

A closer study of the Code reveals two different types of disposal, the first is the
power to dispose ‘by alienation’ (section 76 NLC) and the second to dispose
‘otherwise than by alienation’ (Part 4 NLC).

WHAT CAN BE DISPOSED 7

Other than reserved forest, the State Authority has the
power to dispose of :

STATE LAND ALIENATED MINING RESERVED
LAND LAND LAND

TYPES OF DISPOSAL 8

DISPOSAL BY DISPOSAL
ALIENATION OTHERWISE

THAN BY
ALIENATION

DISPOSAL BY ALIENATION 9

Alienation of land means the disposal of
land by the State Authority

In perpetuity For a term not exceeding
ninety nine years.

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The State authority can only alienate land in
perpetuity under the following three circumstances:

Where the Federal Where the State Where the State
Government requires Authority is satisfied Authority is satisfied
the State Authority that the land is to be
that there are
to alienate in used for a public special
perpetuity to the purpose or
Federal Government circumstances which
render it appropriate
or to a public
authority. to do so.

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Application for alienation is made in the form prescribed in the State Land Rule.
Alienation of State Land is subject to the following terms and stipulations:
i) The grantee must pay a premium (once only unless exempted), survey

fees and other fees in connection with the preparation and registration
of documents of title, the first year annual rent and annual rent
subsequently every year without fail.
ii) The land will be subjected to a specific category of land use and
restrictions as imposed by the State.
The end result of alienation is a registered title. Title with respect to land is in
duplicate, namely the ‘register document of title’ (RDT) that is a register kept
by the Registrar containing details of the alienated land and an ‘issue of
document of title’ (IDT) which is a copy of the register document of title given
to the proprietor of the land.

DISPOSAL OTHERWISE THAN BY 12
ALIENATION

The powers of the State to dispose State land otherwise
than by alienation are contained in Part Four of the Code.

These powers are:

To reserve State To issue To permit the To permit the
Land and to temporary extraction and use of air space
occupation removal of rock
lease reserved material; and above State
land licenses Land or

reserved land.

RESERVATION OF LAND 13

• The State Authority is empowered to reserve any state
land for public purposes under section 62 NLC.

• Examples of public purpose are public schools, hospitals,
police stations, electricity substations.

• The State Authority may reserve land for public purpose
by making a notification in the State Gazette describing
the reserved land, the purpose such land is reserved and
designating the officer who will have control of such
land.

TEMPORARY OCCUPATION LICENCE 14

• Granting of a TOL is another ways in which the State Authority
disposes of land .i.e State Authority allows certain land to be
occupied or used.

• A Temporary Occupation Licence issued by The State Authority to a
person to occupy the State land for a short period of time. The
licence is only issued for a term expiring not later than the end of
the calendar in which it commences.

• It can only be renewed for a term not more than one calendar year
and cannot be renewed more than three times unless a prior written
approval of the State Authority is obtained.

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• The licence is not capable of being transferred or assigned to others
and may not be transmitted upon the death of the holder.

• TOL cannot be issued for the purpose of mining or removal of forest
produce. It follows that the extraction or removal of rock material
from any land for the purpose of obtaining metal or mineral there
from is also not permissible.

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In summary, every TOL issued is subject to the following conditions :

a) It will expire at the end of the year in which it commences unless
it is for the purpose of enabling any public exhibition or
entertainment to be held;

b) It should not be used for any purpose other than stated in it;
c) It should not be used for the planting of permanent crops
d) It should not be used for the erection of any permanent building

or other permanent structure;

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e) It may be renewed annually;
f) It shall terminate in the event of the death of the person or

the dissolution of the body to whom it was issued
g) It is not capable of assignment
h) It may be cancelled immediately, and without compensation

upon the breach of any provisions
i) It may be cancelled upon payment of compensation at any

time before the date of expiry

PERMIT FOR THE EXTRACTION AND 18
REMOVAL OF ROCK MATERIAL

Section 70 of the NLC provides that a permit to extract,
remove and transport rock material can be issued ins respect
of any of the following lands :

a) State land
b) Alienated land;
c) Mining land;
d) Reserved land

A permit can be granted only to any of tose qualified under
section 43 and Part Thirty Three (A) of the NLC. One permit
should only be issued to one person or body.

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In summary, every permit issued is subject to the following
conditions ;

a) It will expire at the end of the year in which it is issued
even though the total quantity of rock material specified
in it has not by then been extracted, removed and
transported

b) It should not be used for any purpose other than the
extraction, removal and transportation of rock material as
stated in it;

c) The quantity of rock material extracted, removed and
transported should not exceed the quantity specified in it;

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d) it is not capable of assignment;
e) It shall terminate in the event of the death of the person

or the dissolution of the body to whom it was issued
f) It may be cancelled immediately, and without

compensation upon the breach of any provisions
g) It may be cancelled upon payment of compensation at

any time before the date of expiry
h) It is also be noted that the NLC does not provide for the

renewal of a permit.

PERMIT FOR THE USE OF AIR SPACE 21
ABOVE STATE LAND OR RESERVED LAND

The NLC (Section 75A) gives the power to the State Authority
to approve the issue of permit for the purpose of erecting,
maintaining and occupying a structure in respect of the
following :

a) on State land or reserved land; or
b) over state or reserved land as an adjunct to any

structure on the adjoining land

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▪ The State Authority can approve the issue of a permit for
the above mentioned purpose for a period of not
exceeding 21 years

▪ The permit issued is subject to an annual payment and to
the terms and conditions imposed by the State Authority.

▪ The permit cannot be assigned except with the approval
of the State Authority.

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▪ The permit can be cancalled by the State Authority if the
holder commits a breach of the rule, term or condition to
which it is subject without payment of compensation.

▪ The State Authority can cancel a permit even when the
holder does not commit a breach of any rules, terms r
conditions, but with payment of the compensation as
may be agreed or determined.

LAND TITLES & ITS CONDITIONS 24

Title to land in Malaysia is
evidenced by a document
such as the issue or register
document of title. Interest
in land, on the other hand,
denotes something which is
less than proprietorship or
ownership.

TYPES OF TITLES 25

QUALIFIED FINAL REGISTRY LAND
LAND TITLE TITLE TITLE OFFICE
TITLE

QUALIFIED LAND TITLE 26

The Land Code permits alienation of land The purpose of a qualified title is to enable
under qualified titles. The basic difference land to be alienated and to enable titles to
between a final and qualified title is that be issued in case of subdivision, partition or
amalgamation of alienated lands before the
land under a qualified title has not been
subject to a survey and hence the area has completion of a survey on the land.

not been finalized.

A qualified title confers on the proprietor Qualified titles are referred as ‘Hakmilik
the same rights as those conferred by a Sementara’ in Bahasa Malaysia. The
final title except that area is provisional
abbreviations ‘Q.T’ or ‘H.S’ are commonly
and is incapable of being subdivided, used to identify qualified title. When any
partitioned or amalgamated. A proprietor of land held under a qualified title has been

land held under qualified title has powers duly surveyed, a final title will then be
to lease, charge or transfer the land before issued in continuation of the qualified title.

completion of the survey.

FINAL TITLE 27

Final titles are the final forms of title A final title gives the proprietor the right
under which land are alienated after they to deal with the land subject to any
have been surveyed. Upon completion of
the survey, the area of land may differ. If restrictions endorsed on the title. The
the land, after the survey, is smaller than proprietor may transfer, lease or dispose
the land. He can also subdivide, partition
that provisionally approved under the
qualified title, the proprietor does not or amalgamate the land.

have any claims against the State
Authority in respect of the discrepancy.

REGISTRY TITLE 28

Qualified and final title can either be Registry titles may either take the form of
Registry or Land Office titles. Under section Grants (Geran) or of State Lease (Pajakan
77(3) NLC, Registry title is appropriate in the
Negeri). A Grant is for land alienated in
case of: perpetuity whilst a state lease is for land

Town land alienated for a fixed number of years
Village land (section 86, NLC). Such Registry titles are
Any part of the foreshore or sea bed registered in two series o books kept in the

Land Registry and is known as
‘Register of Grants’ and ‘Register of Leases’.

LAND OFFICE TITLE 29

Land Office title is appropriate for: Two forms of land office title i.e.
i. Any lot of country land not Mukim Grant or Mukim Lease. The
exceeding 4 hectares in area
ii. All holdings under the Land collector of each district must
maintain 2 series of books known
(Group Settlement Areas) Act 1960. collectively as the Mukim Register.

i. Mukim Grants
ii. Mukim Lease.

Owners of land held under registry
title will have to go to the State
capital to sort out their land
matters whilst the owners of land
office title will only have to visit
the nearest Land Office in their
district.

CONDITIONS & RESTRICTIONS ON 30
TITLES

• Restriction in interest means any limitation imposed by the
State on the powers of the registered proprietor to deal
wleiatshe,hcishalargned, ebaysewmaeynot,f taentarnacnysfoerr sotar tuthtoerycrleieantioonverofhias
land as well as his powers to subdivide, partition or
amalgamate his land.

• Conditions refer to the imposition by the State of
obligations relating to the use of land for agricultural,
ibmuiplodsinegd abnyd tihneduSsttaritael tpourrpeogsuelsa.teCotnhdeitiuosnes omfalyanadlsoheblde
under a permit or temporary occupation license or by way
of a lease of reserved land.

(a) RESTRICTIONS IN INTEREST 31

The State may impose certain restrictions on the owner’s
right to enjoy the land upon alienation. Such restriction may
take the form of a prohibition against the land owner’s
transfer or charge or lease.
An example of restriction in interest is ‘This land may not be
transferred, charged or leased without the written consent of
the State Authority’.

(b) CONDITIONS OF LAND USE 32

• Conditions endorsed on the title relates to the use of land.
• All alienated land is subjected to conditions limiting them

to one of the following categories of land use:
(i) Agriculture
(ii) Building and
(iii) Industry

• As a result of a shift in policy made by the federal
government in 2001, non-citizens and foreign companies
may now acquire land in Peninsular Malaysia. Restrictions
on foreign ownership of properties are also set out in the
Foreign Investment Committee Guidelines.

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• Under these Guidelines, foreign interests are not allowed to
acquire the following:

i. All properties under the category of low and medium low
cost as determined by the State Authority

ii. All properties built on Malay reserve land
iii. Properties allocated to Bumiputera purchasers (referred

to usually as Bumiputera quota)
iv. Stall and service workshops and
v. Agricultural land developed on the basis of homestead

concept.

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