How safe are records at Land Office?

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http://thestar.com.my/news/story.asp?file=/2007/11/28/nation/19593962&sec=nation
Nation - Wednesday November 28, 2007
Taiwanese claims he was nearly cheated of RM10mil plot
By JO TEH

KUALA LUMPUR: A Taiwanese has lodged a report with the Anti-Corruption Agency (ACA) alleging that he was almost cheated of his RM10mil land in the heart of the city.

The 56-year-old businessman, Chen Wei Pin, said he had bought the plot of land in Changkat Raja Chulan here in 1990 and leased it to a car park operator in recent years.

According to MCA Public Services and Complaints Department head Datuk Michael Chong, the report was lodged yesterday morning at the ACA office in the presence of a senior officer, Chen’s lawyer, the department’s legal adviser Datuk Theng Book, and Chong.

“This is a very serious matter and we want the agency to investigate and initiate action,” Chong said, adding that two police reports were lodged earlier.

“This matter will have a bad impact on foreign investors as it affects their confidence in our country. We do not want them to tell their countrymen that property in Malaysia can easily be ‘stolen’,” Chong told reporters yesterday.

Chong also said he hoped to bring the matter to the attention of MCA president Datuk Seri Ong Ka Ting, who is also Housing and Local Government Minister.

The matter surfaced when Chen’s office boy spotted a discrepancy in a land title search when Chen wanted to sell the land to an interested buyer.

At present, the Land Office’s computerised records show that Chen is already in the process of selling the 17,000sq feet plot even though he is not aware of it and that a private caveat had been entered by a director of Zen Zaman Sdn Bhd, claiming that Chen had sold the land to his company.

The Taiwanese denies any knowledge of the transaction, claiming that he had never heard of the company.

Although he holds the original title to his land, attempts to retrieve records of his ownership at the Land Office have proved unsuccessful. There is also no memorandum of transfer on the sale to the private company.

“We have urged the director (of Zen Zaman) to come forward but so far nothing has happened,” said Chong.

End of news.

I just wonder if we who own properties here have to keep checking on records at the Land Office. I've read of news here that people have their car ownerships transferred or their cars used as collaterals without their knowlwdge. This illigal land transfer ("land theft") is not new to locals, now it involves a foreign owner and becomes big serious news.

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hi, BB,

It's a real concern for all. I'd check your title every 6 months or so, and if there's anything dodgy make a police report. Of course, if it's an occupied house on the plot then it's less of a target, as opposed to a car park, or vacant land.

“This matter will have a bad impact on foreign investors as it affects their confidence in our country. We do not want them to tell their countrymen that property in Malaysia can easily be ‘stolen’,” Chong told reporters yesterday.

It's not a case that property in Malaysia can easily be stolen, it's a fact.

The Malaysian Bar Council is currently pressing the Government to amend the National Land Code. They have submitted (July 2007) a memorandum titled, "Prevention and Protection against Fraudulent Land Transactions."

The Star Newspaper reported (Nov 21, 2007) that ammendments to the National Land Code would be tabled at the next session of Parliament. What these amendments consist of has not yet been reported.

Currently there seems to be nothing to stop someone selling your land, and the Adorna Properties v Boonsom Boonyanit decision (2000) means that the new owner (the "active" victim of the fraud) gets the land, and the original owner (the "passive" victim of fraud) bears the loss.

There's a bit more on this over 6 posts at: Land Prices

There's something related to land title called the e-Tanah system which has been recently implemented in Penang on a trial basis. Maybe it's a system for checking title online?

regards, Scott

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Quote[It's not a case that property in Malaysia can easily be stolen, it's a fact.]

Yes, very true,Scott. It also happened with my dad's piece of land on the mainland side. It's gone really GONE. Some one who's interested in the property traced it 2 years ago knowing I'm back here,we went out to have a look , some one's building a new housing estate on it. The interested party checked at the title office, no longer my dad's. He's too old to have the energy to follow-up just took it as a loss as he rightly said he'd not have peace in his old age if he tried to go after the whole trail.
Personally, I'd not put a lot of cash into real estate here esp any thing involving land - when my children are not here.

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hi,

Sorry to hear about your dad's piece of land. The Star Newspaper today reported that the Government has tabled the National Land Code (Amendment) Bill 2007 in an effort to streamline land transactions and ownership.

The Bill will see the implementation of the e-Tanah system in the peninsula, once passed. The article goes on to say, "the electronic land administration system (e-Tanah) is expected to cut transaction time in half, enable an online comprehensive land database collection, and make the application and registration of titles more efficient."

There were no details to say if the Ammendment was also addressing issues raised in the memorandum from the Bar Council.

regards, Scott

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Hi Scott, I think like most amendments made at top level govt they can be inconsistently interpreted and applied and might take years by the time they get filtered down.
If it takes half the time it could also mean faster shady transactions.

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Hey, you Guys are making me feel real nervous 

Hubby and I are seriously looking to buy a nice property in and around KL.  Hope to go out there in January to view properties.   Should I be worried??  Isn't checking every six months going to cost some?

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hi, nks900,

We're just making some suggestions here, from a layperson's viewpoint, to highlight the potential problem.

If I owned some vacant land somewhere I'd be worried and I'd be checking regularily until I did something with the land. That's me.

If I owned some land with a house on it, and I'm living there, then I wouldn't worry so much. This is on the basis that if someone tried to sell it then the would-be buyer would notice me, and the house, and ask questions.

However, if/when I come to buy I'll be asking the conveyancing solicitor about the problem and looking for some means to ameliorate it.

I suggest that we all try to keep track of the National Land Code amendments to see if they address the problem. And then post here. Also, if anyone has already raised the matter with a solicitor it would be great to know what was said.

There's a couple more posts on this at : Land Prices

regards, Scott

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hi,

Coincidentally, today in the Star Newspaper there was the following letter:

Check Identity Theft in Land Deals

The Consumers Association of Penang wishes to express its concern over the numerous unsolved cases of fraudulent land transactions in the country. Despite the steady rise in such deals, hardly anyone has been prosecuted.

Since 2001, there have been about 180 recorded cases, giving cold comfort to landowners about the security of ownership. Surely with this number of cases, the prosecutors should have been able to work out the modus operandi of the fraudsters.

If they lack the expertise in handling such matters, we would urge the government to set up a special unit of forensic and conveyancing experts in the Public Prosecutors office to solve them. It would seem that much of these fraudulent transactions are done by means of identity theft of the landowner or their representative even to the point that a man who had died in 1939 is "known" to have executed a land transfer in 2005.

As a measure to overcome identity theft, CAP suggests that the Government amend the National Land Code so that purchasers of landed property are required to obtain verification of the vendors' particulars and thumbprint from the National Registration Department, and to produce this verification when presenting the transfers.

This may seem an added burden in carrying out a transaction but it would provide a degree of security to landowners against fraudulent transactions, and perhaps avoid having to spend years in the courts seeking to recover their properties. In short, this could help them be safe rather than sorry.

SM Mohamed Idris, President,
Consumers Association of Penang

regards, Scott

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hi,

The e-Tanah system, recently implemented in Penang, got a bad review in today's Star Newspaper.

The article, "E-Tanah system lets many Down" (22/12/2007) says that, "since the electronic land administrative system pilot project was implemented here in October, legal clerks and lawyers have been making a beeline to the State Land and Mineral Office before the crack of dawn."

It seems that some folks had to start waiting from 2.30am to get a queue ticket. One guy was quoted as saying that in his 19 years experience as a legal clerk he had never had to wait for more than two hours to get things done. "Since e-Tanah was introduced, I have been coming in as early as 4.30am just to get a number. I am very disappointed. On paper, e-Tanah is good but the implementation definitely need to improve."

A lawyer was quoted as saying, "before e-Tanah, they could serve about 60 people per day. Today they only served 26 people before the counters closed."

The Deputy Prime Minister has previously been reported as stating that the e-Tanah system would be extended to the entire peninsula from this month (December 2007), following it's successful implementation in Penang.

Looks like it needs some time to get working. The system is expected to create an online comprehensive land database as well as make the registration of titles more efficient.

The Amendment to the National Land Code Act was passed last week. No details yet.

regards, Scott

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hi,

Today's Star Newspaper had the front page headline, "Land Thieves."

The article reported that land scams are on the rise with 49 cases so far this year and an amount "lost" of almost RM10.5 million. The police managed to arrest 1 person this year.

The article highlighted :

> Police say it is tough to get evidence against the land thieves because they use other people's identity.

> Land office employees are believed to be involved in some of these scams.

> Owners are advised to conduct regular checks on their land titles to ensure it has not been transferred without theirknowledge.

> The National House Buyers Association has urged the goverment to initiate an insurance scheme to protect landowners.

In addition to the front page, there were 4 other articles. The first of these titled, "Land Scams on the Rise" gave general data on the increase of unsolved cases.

The second in the Focus Section was titled "At the Mercy of Land Scams" and gave a run down of the Adorna Properties v Boonsom case. The third article, "How Fraudulent Land Transfers Take Place" was an interesting step-by-step guide for would-be fraudsters.

The final article, "Indefeasibility means impossible to be Defeated" gave the legal background to the relevant sections of the land code.

Some interesing quotes:

Malaysian Bar Council's Conveyancing Practice Committee Chairman, "Do regular searches every three months or so, which costs less than RM100 per search. And it is best to go through lawyers whenever you buy or sell property."

National House Buyers Association, "It will lead to a serious loss of confidence in the Malaysian property market and potential investors may well find it easier to invest in property elsewhere."

The situation seems impossible. The recent ammendments to the National Land Code did not include any references to safeguards or additional protection for landowners.

In the above articles the Bar Council is recommending paying their members for regular searches, the  NHBA is suggesting a form of indemnity insurance, the police can't solve any of the illegal transfers, and the relevant Government Department (Lands and Mines) is unavailable for comment.

I'll post the links to the articles when they are available online.

regards, Scott

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hi,

Here are the links :

Indefeasibility means impossible to be defeated

How fraudulent land transfers take place

At the mercy of land scams

Land scams on the rise

regards, Scott

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hi,

In a section of the "At The Dewan Negara Yesterday" report, today's Star Newspaper
had the following :

"Meanwhile, Natural Resources and Environment Ministry parliamentary secretary Datuk Sazmi Miah said that the National Land Council would look into the issue of fraudulent land transctions following calls by various quarters on the need to tighten procedures involving land transfers.

He said that next year, the Council would study Section 340 of the National Lnd code, which covered the basic principles of the land administration system. The interpretation of Section 340 was the main issue in the fraudulent cases reported."

So, someone is going to look at something. Meanwhile take care.

regards, Scott

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hi,

hi,

In a section of the "At The Dewan Negara Yesterday" report, today's Star Newspaper
had the following :

"Meanwhile, Natural Resources and Environment Ministry parliamentary secretary Datuk Sazmi Miah said that the National Land Council would look into the issue of fraudulent land transactions following calls by various quarters on the need to tighten procedures involving land transfers.

He said that next year, the Council would study Section 340 of the National Land code, which covered the basic principles of the land administration system. The interpretation of Section 340 was the main issue in the fraudulent cases reported."

So, someone is going to look at something. Meanwhile take care.

regards, Scott

This was all in 2007, and action in 2008. Well, not quite.

In yesterday's The Sun there was this article. It's short so I've typed it up :

The Sun, Friday, 29th October 2009
A-G may propose amendments to the Land Code

Putrajaya : The Attorney-General's Chambers may propose an amendment to the National Land Code to curb fraudulent land transfers, the Federal Court heard yesterday.

This was in the light of the Federal Court ruling in the case of Adorna Properties Sdn Bhd vs Boonsoom Boonyanit @ Sun Yok Eng in 2001 that a land purchaser had bought a good title even if there was forgery involved in the transfer, as she had bought the property in good faith. The head of the Civil Division in the A-G's Chambers, said that the apex court's decision in the matter would have an impact on the approach it would take in proposing to amend the National Land Code.

In a rare move, all parties in the appeal in a property matter involving Tan Ying Hong and Tan Sian San, Cini Timber Industries Sdn Bhd and United Malayan Banking Corporation Sdn Bhd had called on the Federal Court to revisit and overrule the Adorna Properties authority.

The section in question is Section 340 (3) of the codem which deals with the indefeasibility of land title.

The Federal Court's binding decision that Adorna had obtained an indefeasible title not withstanding the forgery because it was a bona fide purchaser has been criticised by lawyers and academics.

End of Article.

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hi,

Today the Federal Court overturned the decision on the Adorna case. Just heard a short report on the 8pm TV news.

I'll check the newspapers tomorrow for more details.

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hi,

The Federal Court decision was front page news in The Star :


January 22, 2010 : It’s no longer legal to buy land from fraudulent ‘owner’
"A decade-old wrong has been righted with a Federal Court ruling protecting original owners from losing their land when others sell it through fraudulent means."
http://thestar.com.my/news/story.asp?file=/2010/1/22/nation/5525541&sec=nation


So now landowners don't have to worry that someone will get their name registered for the land. Will then sell it on, and the new owner gets to keep it. That's been the situation for 10 years.

Interestingly, on the same page as The Star article (page N6) was another article headlined, "Trio held over land Scam." Seems that the trio tried to transfer a plot of land into one of their names using a false MyKad. One of the trio was "the owner" and another "the buyer."