Abstract

Land Development
To date, land developments includes horizontal, vertical and underground. In this report,
horizontal method of land development which are under NLC1965 will be discussed. These
land developments include the sub-division of land, partition of land, amalgamation of land,
change of land use category and simultaneous application for sub-division and change of
conditions. The discussion will be including some of the local Malaysian law case as well as
its involvement in the housing development.

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Table of Content

Content Page
Abstract 2

1.0 Malaysian Land Law Concept 4-5

1.1 Torrens System
1.1.1 Concept
1.1.2 Principle of Torrens System

2.0 National Land Code 1965 Part Nine- Chapter 1-3 (Section 135- 5-11
150)
2.1 Subdivision (Section 135-139) 5-8
2.1.1 Subdivision-Concept
2.1.2 Subdivision- Malaysian Case Law
2.1.3 Subdivision- Housing Development

2.2 Partition (Section 140-145) 8-9

2.2.1 Partition- Concept
2.2.2 Partition- Malaysian Case Law
2.2.3 Partition- Subdivision in Housing Development

2.3 Amalgamation 10-11

2.3.1 Amalgamation- Concept
2.3.3 Amalgamation- Housing Development

3.0 Category of Land Use 11-13

3.1 Alteration of Category of Land Use
3.2 Simultaneous Application for Subdivision and Alteration of
Land Use
4.0 Conclusion 13

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References

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1.0 Malaysian Land Law Concept
1.1 Torrens System
With British influence during the colonial era, Torrens system of land registration was
introduced to Peninsular Malaysia, replacing English Deed system. Torrens system Malaysia
had adopted three versions of Torrens System according to geographical location. They are
National Land Code (Act 56 of 1965) for Peninsular Malaysia, Sarawak Land Code, Chapter
81 of 1958 for the state of Sarawak and Land Ordinance (Sabah Chapter 68) for the state of
Sabah. However, for Sabah, the Land Ordinance (Sabah Chapter 68) does not provide any
indefeasibility of title.
1.1.1 Torrens system-Concept
Torrens system was introduced into South Australia by the Real Property (Torrens) Act (Act
15 of 1857-58), also named after Sir Robert Richard Torrens who was credited with designing
and implementing the system. It is a registration system on titles of land, based on the
concept of ‘indefeasibility of title’. Once an interest of land is registered, the state guarantees
the interest. The guaranty by the state is essential features as it is the guaranty that the land
titles are properly registered besides improving efficiency of land administration.
Indefeasibility of title is only applied when the title of property has been issued and the name
of the owner had registered on it. However, according to section 340 of the National Land
Code (NLC), it does not apply when the title is obtained by fraud, misrepresentation, forgery
and when the property interest is unlawfully acquired.
1.1.2 Principle of Torrens system
There are two principle of Torrens system that are applied in Malaysia.
(a) Mirror principle.
The register/certificate of title reflects accurately and completely the facts of the land
which consists of name of the proprietor, particulars of the alienated land, area,
location, survey plan and boundary limits. This helps interested purchaser, lessee and
charge to obtain relevant information.
(b) Curtain Principle.
The intending purchaser does not need to look beyond the register. It is sufficient for
the purchaser to examine the documents of register in obtaining the information need.
Long complicated documents are not required to prove an ownership.

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1.1.3 Land Tenure
Malaysia land tenure are divided into two, freehold (land hold in perpetuity) and leasehold.
As stated in Section 40 NLC 1965, all state land within the territories of the state are belongs
to the state authority. Anyway, land can be granted as a freehold title when the state land is
disposed of by the state authority to an individual in perpetuity for an indefinite period.
Besides that, the land can be also granted as leasehold title when the state land is disposed of
by the state authority to an individual for a term of years, not exceeding 99 years. The land
will be reverted to the state authority upon expiry of the period of the lease. A fresh alienation
can be applied if the lease has expired. Renewal of lease should be applied by the owner
before its expiry. In terms of transferability, aggregation and subdivision, leasehold transfer
will be required state or its equivalent’s approval. For freehold, there will be unlimited right
to subdivide and aggregate subject to town planning controls.

2.0 National Land Code 1965 Part Nine- Chapter 1-3 (Section 135-150)

Based on National Land Code 1965 Part Nine, chapter 1 to 3, subdivision, partition and
amalgamation of land are discussed.

2.1 Subdivision (Section 135-139)

A A1 A2

A3 A4

2.1.1 Subdivision- Concept

Subdivision of land is an important legal planning procedure that breaks up an alienated land
held under a final title. A ‘final title’ means registry title, land office title and subsidiary title
(that is to say, all forms of title other than qualified title, as interpreted in section 3 NLC

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1965. The simple concept of subdivision of land is that the land to be sub-divided and held
under the final title. The proprietor of any alienated land will be held under Registry of Land
Office title to hold two or more portions of land under separate titles. Figure 1 shown the
subdivision of land. According to Section 136, NLC 1965, subdivision of land by the state
director or land administrator will demands:
 An environment free from restriction in interest to the subjected land
 A condition that unopposed to any written law for the time being in force.
 Obtained necessary approval from planning authority and state authority for the
development of that area.
 No outstanding land revenue
 Not less than two-fifths of a hectare if the land is subjected to the category
‘agriculture’ or in any condition requiring its use for an agriculture purpose.
 Availability of a suitable means of access. It can be right from such portion of a road,
river, a part of foreshore or a railway station, or to a position within the landform
which such a means access is available.
The approval must be obtained from director of lands and mine for registry title and from
land administrator for land office title (NLC Section 77)
2.1.2 Subdivision-Malaysian Case Law
The Malaysian case law to be discussed is about the application for sub-division of land with
condition for approval. The conditions include certificates of the sub-divided title to be
surrendered to government and exchanged for 99 years leases. These conditions are ultra
vires the National Land Code which are in Section 42, 92, 136, 138 and 195.
Ipoh Garden Bhd v Pengarah Tanah dan Galian Perak, Ipoh
In the Notice of Motion, it is mentioned that the applicant/appellant, Ipoh Garden Berhad, a
housing developer apply for sub-division of certain land. The applicant’s lands held under
freehold titles The respondent (Pengarah Tanah dan Galian, Perak) then informed the
applicant with a letter that the state government will be prepared to approve the building
scheme with terms and conditions that include the followings:-
(a) The applicant to voluntarily surrender the land held under the certificate of titles to the
government upon. Surrender sub-divided titles would be issues
(b) These surrendered sub-divided titles would be held under leases for 99 years.
The terms as contained in the letter of respondent refereed are ultra vires of the National
Land Code in accordance with Section 136 where state commissioners has no alternative but

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the approves when the conditions specified in Section 136(1) are satisfied and there is no
provision in NLC that respondent can impose condition on the application of sub-division.
Besides, there are no provision that the respondent has power to change the terms of freehold
land to a leasehold title and it is an infringement of the proprietary rights, contrary to the
article 13 of the Constitution of Malaysia. The judgement was that whether the committee)
land executive committee of the federal territory) had power to make the developer on giving
up his freehold title and consequently receiving in exchange a 99-year sub divided lease.
Moreover, whether the court can order the committee to approve the application but leave
intact its freehold title. Under section 92(2) of the NLC for sub-division, the conditions
provided by the respondents are alien to the National Land Code would clearly be ultra vires.
Hence, appeal for allowed and application for the sub-division made must be refereed back to
the authority for reconsideration according to law.
Pengarah Tanah dan Galian Wilayah Persekutuan v Sri Lempah Enterprise Sdn Bhd [1979] 1
MLJ 135 FC
Lim Yee Teck & Ors v Shell Malaysia Trading Sdn Bhd [1986] 2 CLJ 104
Ipoh Garden Bhd v Pengarah Tanah dan Galian, Perak [1979] 1 MLJ 271
Leo Leslie Armstrong (Sebagai Presiden dan Pemegang Jawatan The Young Men’s Christian
Association of Kuala Lumpur) (Persatuan Pemuda Kristian Kuala Lumpur) Jawatankuasa
Tanah Wilayah Persekutuan Kuala Lumpur (Yang dahulunya dipegang oleh Majlis Mesyuarat
Kerajaan Negeri Selangor) [2015] 2 CLJ 10
2.1.3 Subdivision-Housing Development
Subdivision are common in housing development. This is due to that there are two or more
buildings that held as one lot under final titles and there are a lot of purchasers are involve in
housing development. As stated in Strat Titles Act Section 8, the original proprietor
(proprietor of the lot before subdivision of an alienated land) may subdivide the multistory
buildings such as apartment and condominium or land and sell any parcel of that divided land
by issuing the building with strata titles. The subdivided land parcels will be held under a
strata title or as an accessory parcel. Strata titles is a title for sub-divided property, house
purchaser is the rightful owner. It is a form of ownership for buildings or block with two or
more stories on alienated land. or multi-level of land parcel that were built on alienated lane.
Moreover, some housing development adopted strata title scheme, which consist of individual
subdivided parcels as well as common property that are managed by the Management
Corporation. Common properties are normally facilities on the alienated land except for

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individual parcels and accessory parcels like staircase, garden and roof. This scheme is
normally seen on gated community housing development, apartment, condominium,
commercial complex, etc.
There are no any regulations that requires the housing developer to subdivide a land
development with multi-phase or involved a whole township. However, it is important to do
so as when the development is done by phases and involves in different property types. By
doing so, each phase of development can form their own Join Management Body (JMB) to
handle individual property management matters and improve the efficiency of each
development parcels.

2.2 Partition (Section 140-145)

A B
ABCD

C D

2.2.1 Partition- Concept

Partition of land is that land with title by two or more persons as co-proprietor of land that
held under the Registry or Land office are being partitioned so that the land is divided
proportionately, and each are under a separate title. It is a necessary procedure to separate the
ownership of the land as well as separate the documents of the co-proprietor. The approval of
partition will be given by the state director if the land held under Registry title and by Land
Administrator if the land held under Land Office title. If the alienated land to be partitioned is
under the category of ‘agriculture’ or in any condition requiring its use for agriculture
purpose, land of 1/5 hectare or less than are allowed to partition with agreement among the
co-proprietors and the approval of state authority as provided in Section 143A. To get the
approval for partition of land, the following conditions shall be satisfied:
(a) Each co-proprietor has agreed or join the application for partition.
(b) The part of land obtained by the proprietor after the partition is as nearly as may be
proportionate to the total of their undivided shares in the whole.

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 (c) A co-proprietor holding majority share in the land may apply for partition.
During the application for partition approval of the land, fee payment should be prearranged,
provide plan of the land on a scale that sufficient to satisfy the land administrator with details
of the partition and all other written paper required.
The intentional partition is that the partition is agreed for all co-proprietors involved that the
land will be partitioned among them. Jurisdictional partition will be needed when negotiation
and mediation could not make all parties to meet an agreement on the partition of alienated
land. The co-proprietor with majority share may file a suit with courts so that a partition is
compelled.

2.2.2 Partition-Malaysian Case Law

When there is an objection made to the application for partition, land administrators have to
notify the applicant as well as other co-proprietors. Co-proprietors with minor share may
invoke provision of NLC section 134 while co-proprietors with major share may invoke
provision of NLC section 141A to assist them with the objection for land partition. However,
referring to case of Ku Yan bte Ku Abdullah v Ku Idris Bin Ku Ahmad & Ors (1991) 3 MLJ
439, the co-proprietor with major share wishes to partition but other co-proprietor refused.
They can straight apply to the court and not necessary to the land administrator. Despite that,
the court for the case of Subramaniam & Ors v. Inderjit Kaur d/o Karnail Singh & Anor.
(1997) 3 MLJ 366 disagreed with the decision in Ku Yan’s case. The judge opinion is that
only co-proprietors with minority share can invoke the provision of Section 145(1)(a). In this
code, it has stated the statutory power of court to terminate the co-proprietorship. Moreover,
by applying Section 145 (1)(a), the applicant have to satisfied the court that any of the co-
proprietors are not consent with the partition application.

2.2.3 Partition-Housing Development

Partition of land are normally happened when there is dispute between co-proprietor or
conclusion of a business strategy to subdivide and share the products of subdivision. The
partition will normally be affected by agreement between both co-proprietor or as a
consequent of a court order. Partition of land are normally held in housing development when
there are diverging interest on the development among the co-proprietors of the selected
alienated land.

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2.3 Amalgamation (Section 146-150)

X1 X2
X5

X3 X4

2.3.1 Amalgamation- Concept

Amalgamation is the combination of two or more adjoining or contiguous lots of alienated
land. After amalgamation, the lands that are under separate titles will be held under single
titled. The approval of amalgamation will be given by land administrator or state authority
where the lots will be amalgamated and are all held under land office title. However, the land
area involved should not exceed four hectares as stated in NLC Section 146(2). The result of
an amalgamation is that only a single title will be issued. The lots cannot be amalgamated as
well if the land to be combined are not in the same town, village or mukim. If the proprietor
of these land before amalgamation are different, name of all proprietors will appear in title
together with shareholdings. Existing titles before amalgamation will have no more effect.
Amalgamation will only be approved by the state director or land administrator when the
condition in Section 136(a)-(g) are satisfied, similar with condition for approval of
subdivision. Approval for amalgamation shall need the sanction of the state authority when
the circumstances are as followed:
(a) The lots that are held under land office title exceeds 4 hectares after combine.
(b) Land lots to be combined are some partly under register title and others under land
office title.
(c) There is dissimilarity between the lots in terms land tenure, rates of payable rent,
categories of land use, conditions and restriction in interest to which they are subject.
As in NLC Section 148, the application for approval for the amalgamation lot to land
administrator shall companied with fee as prescribed, plan showing the amalgamated lot,
copied of any approval required under paragraph 136(1)(c) and all written consents to the

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making of the amalgamation application. In application for land amalgamation, the power of
state director or land administrator are as followed:
(a) Land administrator shall refer the application with state director together with his
recommendation if subsection of 148(1) applies.
(b) If the condition for amalgamation as state are not satisfied, application shall reject.
(c) Inform the proprietor involved if the amalgamation of any lots has approved and
payment for land survey, fees related with preparation and registration of final
documents of title of the combined land. Amount of any chargeable premium fee.
2.3.2 Amalgamation- Housing Development
Due to increase population across the world, subdivision of land is very common. The major
reason for land subdivision is that the inheritors of the land subdivide or partition land
property amongst themselves. Besides, it is also due to the increased commercialization of
land. Land sellers will prefer to subdivide land into smaller plots. Small plots are seemed
cheaper to buyers however the proprietors can earn more than if they sold the land as a
whole. Land amalgamation are beneficial to the landowners as well as government. This is
due to land developer will benefits in terms of economy when land amalgamation of land is
applied. Allowing amalgamation will also encourage employ modern machinery as it is
impossible to use it practically on smaller piece of land. Hence, land amalgamation is good
for increased profitability, construction efficiency and effectiveness to housing development
projects. It makes planning for housing development easier. It is also more convenient to file
tax returns and maintain records on the government side.
3.0 Category of Land Use
Under NLC 1965 Section 52, land are categories into three different land use, which are
known as ‘agriculture’, ‘building’ and ’industry’ respectively. All land owners must only use
the land according to the category of land use as well as the express condition stipulated in
the title.
If a proprietor or a developer decided to develop a land, he must ensure that the use of the
proposed land is not violating the categories of the land, express condition, implied
conditions and the restriction in interest that to be imposed. First, if the category of land is
different from the proposed, action should be appropriately taken to avoid any breaching of
the conditions which might a forfeit of land by the state authority.
3.1 Alteration of Category of Land Use
When a proprietor or developer need an alteration of category of land use or impose a new

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category of land use, the proprietor of land may apply to the state authority to convert the
land use as stated in NLC Section 124. For example, changing an agriculture land with rubber
plantation into a building land for housing development. Same procedure applied to any
rescission of any express restriction in interest endorsed on or removal of document title of
the expression that pertain to land use.
In a scenario that identifying a specific piece land and deciding the land for housing
development and upon checking, the land is located in a industrial zone, with agriculture
status, alternation of land use by the land proprietor should be done to proceed with the
housing development. However, since the land is in industrial zone, application of rezoning
from the state authority is required to make the zone a residential area. Before the alteration
of land use, planning permission should be gain by the local planning authority. If the
developer or proprietor required a subdivision of land, I would advise that the alteration of
land use shall be applied first before subdivision of land. An alteration of land use are
commonly seen changing from agricultural land to building or industrial. A premium cost of
around 15% of the land cost will be charged from changing an agricultural land to building
for housing development. This is due to the changes in rent charges and land value after the
alteration.

3.2 Simultaneous Application for Subdivision and Alteration of Land Use

Referring to the scenario above, subdivision of land is commonly an essential process in a
housing development. Hence, I would recommend that the subdivision and land use alteration
can be applied to the state authority at the same time, attached with rezoning plan and
approved planning permission. The simultaneous application will be under Section 124A of
NLC. Both applications will be treated and dealt as separate application. However, a
simultaneous application might more time.
For Malaysian law case with simultaneous application, we may refer to Pengarah Tanah dan
Galian, Wilayah Persekutuan v Sri Lempah Enterprise Sdn Bhd [1979] 1 MLJ 135. In this
case, the applicant company is the registered proprietor to the freehold land. Since the land
was in the Federal Territory, simultaneous application of sub-division land and conversion to
have the express condition relating to the useof the land amended are applied to the federal
government. The application was to allow the applicant company to build a hotel where the
planning permission had been grated as well. To meet the requirement as stated in NLC,
surrender part of land for government use such as service road, side and back lanes are

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applied too. The application was received back to the applicant that it would be approved on
condition that the approved land will be with a lease of 99 years instead of a subdivide title in
perpetuity. The state authority had argued as well that in Section 124(5)(c) that the alteration
of land use may also be approved with condition compliance with such requirements as the
state authority may think fit. Consequently, the value of land will be affected as a perpetuity
title is definitely more valuable than a 99-year lease. This case had reflected that every legal
power must have clear legal limits, otherwise there is a dictatorship. As discretion done by
the local authority shall not be free from legal restraint when it is exercised wrongly. Hence,
the court shall intervene to defense the liberty of the subject.

4.0 Conclusion
In housing development, land development is involved. The process of partition and
subdivision enable the proprietor to break land into smaller units normally with the intention
of developing the land for productive use or sell his land to other party. The difference of
partition and subdivision are showed in the land title and its proprietor name. In partition, all
owner names will be registered on new unit title separately. In subdivision, same name will
be registered on sub-divided new title. To develop land into different uses, land conversion
should be applied after subdivision. However, if the development is all in same use but is
different with the original land use, conversion may be done before the subdivision. The
power of the local authority as well as the court should be also stated more clearly in the
National Land Code to improve the code. Moreover, with the rapid growth of construction
development and new living lifestyle of the people in the country, the code can also be
improvised.

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References
1. National Land Code 1965 (Act 56 of 1965)
2. Strata Titles Act 1985 (Act 318)
3. Change in Category of Land Use. Retrieved on June 12, 2020 from
https://www.jpph.gov.my/v3/en/jpph-business/valuation-and-property-services-
activity/change-in-category-of-land-use/
4. How a property can be partitioned between co-owners. Retrieved on June 12, 2020
from
https://economictimes.indiatimes.com/real-estate/how-a-property-can-be-partitioned-
between-co-owners/slideshow/18200870.cms
5. Ku Yan bte Ku Abdullah v Kuidrisbin Ku Ahmad & Ors. Retrieved on June 12, 2020
from
https://fdocument.pub/amp/document/ku-yan-bte-ku-abdullah-v-ku-idris-bin-ku-
ahm.html
6. Pengarah Tanah dan Galian, Wilayah Persekutuan v Sri Lempah Enterprise Sdn Bhd.
Retrieved on June 12, 2020 from
http://www.sultanazlanshah.com/pdf/Judments%20PDF/Pengarah-Tanah-Galian.pdf
7. Points to ponder when purchasing agricultural land. Retrieved on June 12, 2020 from
https://www.edgeprop.my/content/1022704/points-ponder-when-purchasing-
agricultural-land
8. The decision of the federal court in the Controversial Case of Conversion. Retrieved
on June 12, 2020 from
https://hsk.com.my/blog/the-decision-of-the-federal-court-in-the-controversial-case-
of-conversion/

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