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PROPERTY LAW – REAL ESTATES – FREEHOLD –LEASEHOLD

Definition of Real Estate

  • Real property is commonly defined as land and the things permanently attached to the land (e.g. buildings).

Based on what system?

  • Property Administration in Malaysia is based on the Torrens System.
  • Under this system, all dealings in land must be registered in order to be effective.

Governed by which legislation?

  • Property law in Malaysia is governed by four (4) main legislations known as
  • National Land Code 1965;
  • National Land Code (Penang and Malacca Tiles) Act 1963;
  • Sarawak Land Code;
  • Sabah Land Ordinance.

National Land Code 1965 is only applicable to Peninsular Malaysia.

Can we have rights over the land?

  • You have a right to do with the land as you please, subject to restrictions imposed by law.
  • When you own land, you can do many things, e.g.
  • Rent/lease it to others;
  • Sell/transfer it;
  • Use it as collateral for a loan.

Tenure of land in Malaysia falls into two broad categories

  • Freehold
  • Leasehold

Freehold title:-

  • Enables the owner to hold the property forever (in perpetuity).

Leasehold title:-

  • The owner can only hold the property for a fixed period of time.
  • Land owned by states and are usually leased for term of 99 years.
  • Upon the expiry of leasehold tenure, the property is required to be surrendered to the state government if the owner does not apply to the state government to renew the leasehold tenure of the property.
  • Renewal of lease can be done by paying Premium to the state government.
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