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CONSULTATION PAPER

Proposed Amendments to

Strata Titles Act 1985 and

Land Acquisition Act 1960

TABLE OF CONTENT

Pages Foreword

Overview of the consultation process i Call for submissions, comments and feedback

ii

Separator PROPOSED AMENDMENTS TO STRATA TITLES ACT 1985

1. Introduction 1 2. Imposition of „Rent of Parcel‟ for Individual Strata Titles 1 3. Additional Provisions Relating to „Special Building‟ 5 4. Streamlining the Existing Provisions for More Effective and Better

Regulation of the Issuance and Registration of Strata Titles 6

5. Corresponding Amendments in View of the Proposed Amendments to the Land Acquisition Act 1960 [Act 486] Relating to Land Acquisition Involving Stratified Schemes

7

Annex – A: Sample Format for Public/Respondent Feedbacks and Comments

8

Separator PROPOSED AMENDMENTS TO LAND ACQUISITION ACT 1960

6. Introduction 9 7. Amendment to Facilitate the Implementation of Land Acquisition in

Respect of Stratified Properties Scheme 10

8. Amendment to Allow the Land Acquisition in Respect of Underground Land (Whole or Part of Underground Land)

14

Annex – B: Sample Format for Public/Respondent Feedbacks and Comments

18

FOREWORD

The concept of strata title ownership was first introduced in Peninsular Malaysia on 1st January 1966 by the National Land Code [Act 56/1965] (hereinafter referred as “NLC”) in the form of subsidiary titles with management corporation to take care of the common property. However, the following years witnessed tremendous changes and developments in the housing industry in particular vis-à-vis the stratified developments.

There was then a dire need to have a separate legislation that would be able to meet the dynamics as well as the demand of the industry. Hence, the Strata

Titles Act 1985 [Act 318] (hereinafter referred as “STA”) was introduced and came into effect on 1st June 1985. The salient purpose of the STA is to provide legislation for the registration and issuance of document of titles for each unit or parcel in any scheme of stratified development and other related matters together with regulations related to management corporation.

The existing provisions under the STA stipulate that it is the obligation of management corporation to pay annual rent (commonly known as quit rent) in respect of the land where a strata scheme belongs. The parcel proprietor contributes to the payment proportionately based on share units. Under the NLC, failure to pay the quit rent on time may result in penalty. Appropriate actions may also be taken by the State Authority in respect of the land. Further, the quit rent must be paid in full before presentation of any dealings (transfer, charge, lease, and easement, etc.) may take place. In many cases, some errant parcel proprietors failed to pay their contribution which lead to inability on the part of the management corporation to pay the quit rent. As a result, dealings cannot be presented by any of the parcel proprietor and this may upset future transactions. Hence, rent of parcel is proposed to be introduced as a mechanism to address this critical problem, whereby the obligation to pay the quit rent is transferred from the management corporation to the individual parcel proprietor.

In addition, the proposals also include additional provisions for 'special building' (introduced by the amendment in year 2007) in order to facilitate its application for strata titles. Other proposals are meant to enable strata titles to be issued more effectively. More importantly, amendments are proposed to correspond the proposed amendments to the Land Acquisition Act 1960 [Act 486] relating to land acquisition involving stratified schemes.

As far as the Land Acquisition Act is concerned, the law came into force on 13th October 1960. It served as a uniform law in the matter of compulsory land acquisition. The last amendment to the Act was made in 1997 by the Land Acquisition (Amendment) Act 1997 (Act A999). Presently, there is an urgent need to optimize land use particularly in the city centre and urban area so as to facilitate the current development needs, taking into account the escalating value of the land. Therefore, a number of changes to the provision of the Land Acquisition Act are required, and certain corresponding amendments to the NLC. The change is necessary to enable the administration of the acquisition of land to be carried out more effectively and to ameliorate any ambiguities encountered since the last amendment. Ultimately, it can meet the higher expectation of the public.

In line with the government aspiration to engage the public pursuant to the People-Centric policy, JKPTG has published a consultation paper as a mechanism to obtain public comments and feedbacks in amending the above laws.

(DATO’ SRI HAJI AZEMI BIN KASIM) Director General of Lands and Mines (Federal), Department of Director General of Lands and Mines (Federal), Ministry of Natural Resources and Environment, Putrajaya 13 February 2015

Proposed Amendment to Strata Titles Act 1985 and Land Acquisition Act 1960

(Consultation Paper)

Page i

OVERVIEW OF THE CONSULTATION PROCESS

epartment of Director General of Lands and Mines (Federal)(JKPTG) is committed to open, accountable and responsive decision-making, informed by effective

communication and consultation between JKPTG and its key stakeholders.

This consultation paper outlines a number of proposed changes to Strata Titles Act 1985 [Act 318] and Land Acquisition Act 1960 [Act 486]. This paper sets out proposals related to:

(i) amendment to facilitate the implementation of land acquisition in respect of stratified properties;

(ii) amendment to allow the land acquisition in respect of underground land (whole underground land or only part of underground land);

(iii) amendment for imposition of „rent of parcel' for individual strata titles;

(iv) additional provisions relating to „special building‟;

(v) streamlining the existing provisions for more effective and better regulation of the issuance and registration of strata titles; and

(vi) corresponding amendments in view of the proposed amendments to the Land Acquisition Act 1960 [Act 486] relating to land acquisition involving stratified schemes.

The proposed amendments outlined in this Consultation Paper reflect JKPTG‟s proposed approach. The Government will not reach a final position on these issues until after the consultation process has concluded.

Key stakeholders

Relevant stakeholders include, but are not limited to:

conveyancers;

academicians;

financial institutions;

regulatory and representative bodies (such as the Malaysian Bar Council);

politicians;

surveyors and valuers;

real estate agents; and

relevant government departments and agencies

D



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CALL FOR SUBMISSIONS, COMMENTS AND FEEDBACK

JKPTG welcomes comments and feedback on issues or proposals and questions included in this consultation paper, as well as opinions on other issues or suggestions relating to aspects of the registration, administration and requirements to control the regulation for improving the system of land administration, in particular the strata titles.

To ensure that the objectives of this public consultation will give an effective impact, JKPTG appreciates if all views and comments will also include reasons and basis for the views and feedback submitted. All comments and feedback are treated as public documents unless otherwise stated.

How to make submission

Closing date for submissions : 18 March 2015

Mail: Director General of Lands and Mines (Federal), Department of Director General of Lands and Mines (Federal), Ministry of Natural Resources and Environment, Level 2, Blok Menara, Wisma Sumber Asli, No. 25, Persiaran Perdana, Presint 4, 62574 Putrajaya

E-mail: [email protected]

Fax: 03-8881 0794, 03-8890 2316

The format that submissions, comments and feedback need to follow can be found on Annex -A. and Annex -B. You may wish to address the consultation questions listed in this paper. For general information about this paper, please visit our website at www.jkptg.gov.my

Use of submissions, comment and feedback

Unless requested not to, JKPTG will treat all submissions, comments and feedback received as public documents. JKPTG reserves the rights to make submissions (in part or in full) available to other parties and the general public.

mailto:[email protected]

PROPOSED AMENDMENTS TO STRATA

TITLES ACT 1985



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1. INTRODUCTION

1.1 The Department of Director General of Lands and Mines (Federal) (JKPTG) proposes to amend the Strata Titles Act 1985 [Act 318] (“STA”) covering the scopes below:

1.1.1 Imposition of „rent of parcel' for individual strata titles;

1.1.2 Additional provisions relating to 'special building';

1.1.3 Streamlining the existing provisions for more effective and better regulation of the issuance and registration of strata titles; and

1.1.4 Corresponding amendments in view of the proposed amendments to the Land Acquisition Act 1960 [Act 486] relating to land acquisition involving stratified schemes.

Feedback on Proposed Amendments

1.2 In order to gauge the views of the members of the public particularly the interested parties to the proposed amendments, a set of questions have been prepared.

1.3 The questions are structured in accordance with the scopes of the proposed amendments as set out in paragraph 1.1 of this consultation paper. Prior explanation is given for each scope. In answering the questions, insight and comments are most welcome.

2. SCOPE 1: IMPOSITION OF ‘RENT OF PARCEL' FOR INDIVIDUAL STRATA TITLES

A. Imposition of Rent of Parcel

The main purpose of the introduction of rent of parcel is to enable the parcel owners to execute dealings (transfer, charge, lease or easement) in respect of his parcel, since registration of dealings presented in the land office is dependent upon full payment of the rent. Under the National Land Code (NLC), rent of the land (commonly known as „quit rent‟) is a reference to the rent in respect of the land on which the strata scheme is developed and it must be paid in full annually. Otherwise, the penalty in the form of arrears fees or even proceedings may be initiated by the land office to recover rent for any land falling in arrears. In the context of strata schemes, payment of quit rent is the responsibility of the management corporation, based on the contribution of each parcel owner in proportionate to his share units. It is proposed that the obligation to pay the rent be transferred to individual parcel owners. In the proposal, rent of parcel includes any fee or the fee payable to the State Authority (PBN) annually imposed on a parcel or a provisional block as if it were rent or land revenue as defined under section 5 of the NLC. The quit rent in respect of the land to which the scheme belongs will cease to be operative upon the commencement of the payment of rent of parcel. In the event that the scheme is terminated in accordance with section 57 of the STA, quit rent in respect of the land will be revived, at a rate prevailing then.



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Based on the statement above, in your view:

Q1: Do you agree that the imposition of rent of parcel be provided in a new Part in the STA?

Q2: When the rent of parcel comes into force, would it be appropriate that the rent of parcel to be enforced also include the strata titles registered before the commencement of the proposed amendments?

Q3: Do you agree that the date of coming into force of rent of parcel for strata titles to commence on 1st of January?

Q4: In the case where the strata titles are registered after the coming into operation of rent of parcel, do you agree that the rent of parcel comes into force on 1st January of the following year since the current rent was paid upon the approval of the application for strata titles?

Q5: In order to avoid “double taxation”, the quit rent of the lot of the strata scheme shall cease to be operative when the rent of parcel comes into force, until the termination of the subdivision takes place. Do you agree?

Q6: The effects when the Strata Register Book is opened are provided in the STA based on the existing provisions. Therefore, the existing provisions are proposed to be amended to include:

(i) to inform the starting point of rent of parcel and quit rent of the land cease to be operative; and

(ii) rent of parcel begins the following year after Strata Register Book is opened. Quit rent for the land collected in the current year will expire the following year;

Based on the reasons above, do you agree with these proposals?

Q7: In the case of provisional block, it is proposed that relevant provisions to be included to inform the termination of rent of parcel for the provisional block (Form 4A) and that rent of parcel (for each parcel/strata title- Form 4 )comes into operation. Do you agree?

Q8: The provision that sets conditions for application of amalgamation and division of parcels is proposed to be amended to include a new requirement that all arrears of rent of parcel, if any, must be paid before the application is approved. Do you agree with the proposed amendment?

Q9: In respect of the imposition of rent of parcel, it is proposed that the STA be amended to enable the amount of rent of parcel after the amalgamation or division of parcel to be effected in the document of title. Do you agree?

Q10: In accordance with the proposed imposition of rent of parcel, provisions regarding the termination of the subdivision are proposed to be amended for the purposes of the following:



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(i) That all rent of parcels to be paid as one of the conditions for approval of termination of subdivision; and

(ii) In the event that whereby the strata scheme is terminated, quit rent in respect of the land will be revived, at a rate prevailing then, and the management corporation shall be liable to pay the quit rent.

Do you agree with the proposed amendments?

B. Computation of Rent

Q11: Do you agree that the computation of rent is based on the area of parcel in square meters?

Q12: Do you agree that rates of the rent of parcel will be provided in the Strata Titles Rules (in each state)?

Q13: Do you agree that the computation of rent will take into account the area of accessory parcel (if any)?

Q14: If the accessory parcel is accounted for the purpose of computation of rent, do you agree if a different weightage is applied?

Q15: When the rent of parcel comes into operation, and the quit rent of the lot is in arrears (if any), the arrears will be distributed to each parcel in accordance with share unit entitlements. Do you agree?

Q16: Do you agree that any remittance, payment by instalment, exemptions and other matters related to payment of rent of parcel to be provided in the Strata Title Rules (in each state)?

C. Revision of Rent of Parcel

Q17: Imposition of rent of parcel is subject to revision in every ten years where, the first review shall not be less than ten years and runs concurrently with the revision of rent under section 101 of the NLC. Do you agree?

D. Rent in Arrear

The provisions concerning arrears and failure to make payment of the sum demanded payable to State Authority will be provided under the STA which are similar to the provisions under the NLC. Under the proposed amendment, the rent of parcel will be collected from 1stof January annually and will be in arrears on 1stof June of that year.

In your view;

Q18: Do you agree that when rent of parcel is in arrears, the owner of the parcel will be served with a notice of demand under the STA similar to Form 6A of the NLC?

Q19: Do you agree that the period to comply with the notice of demand is 3 months from the date of service of the notice which is similar to Form 6A of the NLC?



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Q20: Do you agree that a copy of the notice of demand is also be served to the management corporation?

Q21: Do you agree with the proposal that any persons or bodies which may have registered interest on the parcel are allowed to pay the sum demanded on behalf of the proprietor?

Q22: The proposed amendment will provide that any persons or bodies that have registered interest on the parcel, and made payment of the arrears on behalf of the proprietor, the payment that have been made shall be recoverable by deduction from any rent payable to the proprietor under the lease, sub-lease or tenancy agreements. Do you agree?

Q23: The proposed amendment will provide that any persons or bodies that have registered interest on the parcel, and made payment of the arrears on behalf of the proprietor, the payment that have been made shall be recoverable by civil action. Do you agree?

E. Non-payment of Rent of Parcel

In the case of non-payment of rent of parcel after the notice of demand was served, and the 3 months‟ notice has expired, the land administrator shall issue a notice of reversion and vesting to the proprietor under the STA which is similar to Form 8A of the NLC. The parcel will revert to the State Authority and vested in, a statutory authority nominated by the State Authority. Consequently, the statutory authority will be obliged to pay contributions or any fees payable to the management corporation.

In your view;

Q24: When there is a failure to pay rent of parcel within 3 months from the date of service of notice of demand, the land administrator will issue a notice of reversion and vesting (similar to Form 8A of the NLC) to inform that the parcel or provisional block has been forfeited and vested in, a statutory authority nominated by the State Authority. The notice will be published and gazetted in accordance with section 433 of the NLC. Do you agree?

Q25: When the parcel is forfeited, the effects are:

(i) Arrears of rent in respect of the parcel or provisional block is extinguished;

(ii) Parcel or provisional block will be freed and discharged from interests subsisting or capable of arising immediately before the forfeiture took effect ;

(iii) Strata title in question will be vested and registered in the name of the statutory authority nominated by State Authority;

(iv) Statutory authority holds the right and responsibilities as the owner of the parcel, and is required to pay contributions to the management corporation or any costs or fees prescribed under related laws; and



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(v) If there is any outstanding contributions to the management corporation prior to the forfeiture and vesting of the parcel or provisional block, the amount shall be claimed from the previous proprietor by civil action or through any other means as provided under related laws.

Do you agree with the above proposals?

Q26: Do you agree that the provisions regarding actions to be taken by land administrator after the forfeiture takes effect will be based on the provisions of the NLC (applicable in general, pursuant to section 5 of the STA) without being stipulated in the STA?

F. Appeal against Forfeiture

Forfeiture of parcel or provisional block due to failure to pay the rent of parcel will be slightly different compared to forfeiture under the NLC. The parcel will revert to the State Authority and vested in, a statutory authority nominated by the State Authority.

Q27: Within 3 months from the date the forfeiture and vesting is gazetted, the statutory authority is not permitted to perform any dealings. This will allow the process of appeal to court by the previous parcel proprietor. Do you agree?

Q28: When forfeiture takes effect, the previous proprietor can only make an appeal against the forfeiture to court within 3 months from the date of the gazette of the notice of reversion and vesting. Do you agree?

Q29: The appeal against forfeiture to the State Authority will not be provided under the STA as the parcel has been vested to a statutory authority. Do you agree?

3. SCOPE 2: ADDITIONAL PROVISIONS RELATING TO 'SPECIAL BUILDING’

Amendment to the STA in the year 2007 (via Act A1290) coined the definition „special building‟ which refers to “any building occupied before June 1996”. This amendment exempted the requirement to submit the Certificate of Fit for Occupation (CFO) as a mandatory requirement for application of strata titles. Unfortunately, despite this exemption, the number of failure to apply strata titles with regards to special building remains on the rise. One of the factors is related to the absence of mandatory documents which are no longer available (e.g. approved building plan, certificate by architect, etc.)

Hence, this amendment proposes the insertion of additional provisions related to special building to enable the State Authority to give exemptions to any documents to be submitted upon application of subdivision of building.

Q30: Do you agree with the proposal related to additional provisions in respect of special building?



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4. SCOPE 3: STREAMLINING THE EXISTING PROVISIONS FOR MORE EFFECTIVE AND BETTER REGULATION OF THE ISSUANCE AND REGISTRATION OF STRATA TITLES

The proposed amendment of STA will also streamline and improve the existing provisions so that the issuance and registration of strata titles can be done more effectively in sequence of the imposition of rent of parcel.

Q31: In tandem with the proposal for the imposition of rent of parcel, the STA will be amended to clarify the term used for the application of the rent of parcel. Do you agree with the proposal that the definition of rent under section 5 of the NLC includes the definition of rent in respect of parcels under the STA?

Q32: In this proposal, the provision regarding the building or land capable of being subdivided will be enhanced. Do you agree?

Q33: Provisions under the STA allow the management corporation to make an application for creating one or more subsidiary management corporation(s) through a comprehensive resolution under the Strata Management Act 2013. However, it is proposed that the provisions regarding this matter are to be amended so that the application to create one or more subsidiary management corporation(s) can be done in a more appropriate manner:

(i) Special plans to be prepared by a "licensed land surveyor"; and

(ii) Any amendment made to special plans has to be approved by the management corporation through a comprehensive resolution.

Do you agree with the proposals?

Q34: The STA specifies the responsibility of the original proprietor or any persons or bodies appointed by the Court to complete the transfer to the purchaser within 30 days from the date of issuance of strata titles by land administrator. However, this provision is proposed to be repealed based on these reasons:

(i) The responsibility to complete the transfer of the strata title is provided in Schedule H, Housing Development (Control and Licensing) Regulations 1966;

(ii) The purchaser can make a claim to the Tribunal for Homebuyer‟s Claims and also through a civil action in court when the original proprietor fails to complete the transfer; and

(iii) The STA basically provides procedures only concerning the application, issuance and registration of strata titles and matters connected therewith.

Based on the reasons, do you agree for this provision to be repealed?



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5. SCOPE 4: CORRESPONDING AMENDMENTS IN VIEW OF THE PROPOSED AMENDMENTS TO THE LAND ACQUISITION ACT 1960 [ACT 486] RELATING TO LAND ACQUISITION INVOLVING STRATIFIED SCHEMES

Q35: The Land Acquisition Act is proposed to be amended so as to incorporate the acquisition for the stratified scheme, involving parcels, accessory parcels, provisional blocks and common property. In this regard, corresponding amendment to the STA is inevitable to provide:

(i) The re-computation of share units (if applicable);

(ii) In the case of acquisition of the whole lot, it is proposed that the management corporation will continue to exist for so long as it is reasonably necessary to wind up its affairs and shall then cease to exist; and

(iii) Other matters connected therewith.

Based on the above, do you agree that a new Part is created in the STA for this purpose?

Prepared by: Strata Titles and Stratum Division Department of Director General of Lands and Mines (Federal) Ministry of Natural Resources and Environment PUTRAJAYA 13 February 2015



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ANNEX – A

SAMPLE FORMAT FOR PUBLIC/RESPONDENT FEEDBACKS AND COMMENTS

Director General of Lands and Mines (Federal), Department of Director General of Lands and Mines, Ministry of Natural Resources and Environment, Level 2, Wisma Sumber Asli, No.25, Persiaran Perdana, Presint 4, 62574 Putrajaya (E-mail:[email protected])

Proposed Amendment to Strata Titles Act 1985

SCOPE 1: IMPOSITION OF ‘RENT OF PARCEL' FOR INDIVIDUAL STRATA TITLES

QUESTION

Question 1:

Do you agree to the imposition of rent of parcel which will be provided in a new Part in the STA?

COMMENTS

RESPONDENT NAME : CONTACT NUMBER : E-MAIL :

PROPOSED AMENDMENTS TO LAND

ACQUISITION ACT 1960



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6. INTRODUCTION

6.1 This Consultation Paper proposes some legislative changes to the Land Acquisition Act 1960 [Act 486] in response to current need of economic climate and, as far as practicable, optimizing use of the land particularly in the city centre and developed area. This Consultation Paper also outlines a number of changes to the provision of the Act. Some of these proposals require additional administrative procedural changes while others can be achieved by amplifying the procedures in the Act itself.

6.2 Originally, the Land Acquisition Act came into force on 13 October 1960. The purpose of the Act is to consolidate the law relating to the acquisition of land, the assessment of compensation to be made on account of such acquisition, and other matters incidental thereto. From its inception, the Act has undergone several amendments.

6.3. The proposals and recommendations contained in this paper are the outcome of a research, brainstorming, workshop and discussion carried out by JKPTG from 2013 until 2014. In outlining this proposal, JKPTG has taken into account the suggestions made by the relevant government agencies such as from the Land Registries and Land Offices from the Peninsular Malaysian States. The purpose of the proposal is to make recommendations to amend the Land Acquisition Act 1960 [Act 486] to provide for:

6.3.1 Clear provisions in respect of existing procedures that lack clarity; and

6.3.2 Adequate provisions to support practices that are not sufficiently addressed in the Land Acquisition Act.

6.4 This consultation Paper outlines a number of proposed changes to Land Acquisition Act 1960 [Act 486]. It sets out proposal relating to:

6.4.1 Amendment to facilitate the implementation of land acquisition in respect of strata properties scheme; and

6.4.2 Amendment to allow the land acquisition in respect of underground land (whole underground land or only part of underground land).

6.5 The proposal to amend the Land Acquisition Act has resulted new dimension for land acquisition practices. JKPTG‟s aim is to have an efficient and practical land acquisition practices to meet the expectation of Public. This will also avoid ambiguity and complexity on the part of the Land Administrator in performing his duties.

6.6 As far as the amendment of the provisions of the Land Acquisition Act is concerned, this Consultation Paper will consider issues are needed to look into to enable a smooth application of land acquisition procedures.



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7. AMENDMENT TO FACILITATE THE IMPLEMENTATION OF

LAND ACQUISITION IN RESPECT OF STRATIFIED

PROPERTIES SCHEME

Issue The existing provisions of Land Acquisition Act is unable to meet the requirements for implementation land acquisition in respect of stratified properties scheme. 1

7.1 Stratified properties scheme has been developed especially in urban centre due to

the fact that the land is a scarce resource and the population tremendously increasing. Hence, the land cannot meet the demands for home ownership and high-rise development is the appropriate solution.

7.2 As regards land acquisition as provided for under the Land Acquisition Act, the Government may need to acquire the land to carry out the project for the public purpose. In that situation the Government shall have a rights to acquire suitable land including stratified properties scheme for the project such as road, school, police station and etc.

7.3 The land acquisition in respect of parcel of a subdivided building is already supported by existing provisions of the Land Acquisition Act. However, it is observed that there are no clear procedural provisions described by the Land Acquisition Act to apply the land acquisition in respect of stratified properties scheme. Although the existing provisions of Section 23 and 66 are referring to the land acquisition in respect of parcel held under strata title only, this is also aiming at „stratified properties scheme‟. Hence, legislative amendment will be required to provide clear procedure for such acquisition to enable the implementation of land acquisition to be carried out smoothly.

What is proposed:

7.4 There are no express provisions in the Land Acquisition Act providing for the procedure to apply the land acquisition in respect of stratified properties scheme. It is proposed to amend provisions in the Land Acquisition Act to provide a procedure to assist in application of the land acquisition in respect of stratified properties scheme.

7.5 The issues were examined thoroughly and JKPTG found out that the land acquisition in respect of stratified properties scheme may be illustrated in various different scenarios as follows:

(a) The land acquisition in respect of whole stratified scheme (see Figure 1);

(b) The land acquisition in respect of part of stratified scheme (see Figure 2);

(c) The land acquisition in respect of part of stratified scheme which involved common property only (see Figure 3); and



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(d) The land acquisition in respect of parcel under strata title only (see Figure 4).

Figure 1.

Figure 2.



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Figure 3.

Figure 4.

Rationale for the proposal:

7.6 The proposal to amend provisions in the Land Acquisition Act to provide for a procedure to assist in implementation of the land acquisition in respect of stratified properties scheme will align with the Act itself which allows the land acquisition in the case of a parcel of a subdivided building by virtue of section 23 and 66 of the Act. This is because by providing clear procedure it will give greater certainty in implementing the land acquisition in respect of stratified properties scheme. This clear procedure also will avoid confusion among public.

7.7 The changes made in the Land Acquisition Act only is inadequate to support the implementation of the land acquisition in respect of stratified properties scheme without support provision in the Strata Title Act 1985 [Act 318]. In the absence of provisions to support the implementation of the land acquisition in respect of stratified properties scheme in Act 318, this action will not be able to pave the way



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to a fruitful application in the future. Hence, consequential amendment is needed in Act 318 to streamline the requirement of the acquisition.

How it will work:

7.8 The guideline will be provided to describe how this will work. This guideline is important to guide Land Administrator in implementing process flow of the land acquisition in respect of stratified properties scheme to run smoothly.

7.9 The following tables highlight some procedural requirements if the proposal of the land acquisition in respect of stratified properties scheme is implemented. For example, column 2 of the Schedule below, set out what are the new requirements that need to be fulfilled in order to execute this process.

Procedure Requirement

Land acquisition plan (section 7)

The form and nature of land acquisition requires location plan, delineation plan and storey plan.

Note of intended acquisition (section 9)

The proper registering authority shall also make a note of the intended acquisition in the relevant book of strata register.

Entry in register (section 23)

The proper registering authority shall also make a memorial pursuant to the issuance of the title in continuation in the relevant book of strata register.

Service of notices (section 53)

Service of any notice or other document under the Act shall also be made to the management corporation (MC) of stratified properties scheme other than related parcel owner and interested parties.

Payment of Compensation

Payment of compensation shall be made to the related parcel owner, interested parties and MC of stratified properties scheme following what each scenario requires.

Question 1:

Do you agree with the proposed changes amendment to the Land Acquisition Act to enable the implementation of the land acquisition in respect of stratified properties scheme? If not, why not and would be appropriate?



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Question 2:

Are the proposed scenarios in paragraph 7.5 sufficient to include the land acquisition in respect of stratified properties scheme? If not, what other scenario and why?

Question 3:

Do the proposed new procedures requirement outline in paragraph 7.9 of this Consultation Paper adequately to support the implementation of the land acquisition in respect of stratified properties scheme?

Question 4:

Are there any other suggestions that should be considered?

Question 5:

Is there any obstacle if the proposed land acquisition in respect of stratified properties scheme being implemented?

8. AMENDMENT TO ALLOW THE LAND ACQUISITION IN

RESPECT OF UNDERGROUND LAND (WHOLE OR PART OF

UNDERGROUND LAND)

Issue The existing legal provisions the Land Acquisition Act is unable to meet the needs and requirements for the land acquisition in respect of underground land (whole or part of underground land) 2

8.1 The Land Ownership as governed by the National Land Code is based on the

Torrens System. It is protected by the National Land Code in Section 340 (Registration to confer indefeasible title or interest, except in certain circumstances) and is guaranteed by the Federal Constitution 1957 as stated under Article 13 (rights to property). Once an ownership is being registered, the owner‟s title and interest is indefeasible except when it involved fraud or misrepresentation. Furthermore, nobody shall be deprived of property unless he or she had been paid an adequate compensation.

8.2 Part Five (A) Disposal of underground in the National Land Code was inserted through Act A752/1990 and was gazette on 22nd February 1990. The Division then serves as the fundamental legislation relating to the disposal of underground land which also known as stratum. Notwithstanding the existing of Part Five (A) of the



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National land Code on the disposal of underground land, there are many aspects of the implementation of the underground land that demand in depth deliberations. Recent developments particularly in urban areas such as Kuala Lumpur further intensifies the urgency for JKPTG to scrutinize the existing legislation on underground land as a means to facilitate the booming of complex high-density developments and the increased pace of change in the development of urban public transport system.

8.3 As regards to lands alienated in Peninsular Malaysia, generally none of the lands

were alienated without specifying the depth of underground land to be utilized and enjoyed by the landowners. There are also no upper or lower limits stated on the title. This led to a problem since the landowners claim that they not only have the rights to the plot itself but also the space above up to the sky and the ground below.

8.4 The rights of the landowner are subject to Section 44(1) of the National Land

Code where any person or body has the exclusive right to use and enjoyment of so much of the column of air space above the surface of the land, and so much of the land below the surface, as is reasonably to the lawful use and enjoyment of the land. In other words, the landowners have exclusive right to use and enjoyment of so much of the column of air space above the surface of the land, and so much of the land below the surface but the rights is subject to the provisions of the National Land Code and any other wtitten law for the time being enforced upon the disposal of the land. The issue is whether it is possible to enter private land without having to acquire.

8.5 On the other hands the Land Acquisition Act enables Government to acquire

private land required for public purpose and other purposes under Section 3 of that Section. Traditionally, land acquisition in Peninsular Malaysia requires land to be acquired the whole land or part of his land based on area. However, acquisition of underground private land is uncommon in Malaysia and there is no provision in our system is silent on it. Hence, a legislative amendment is proposed to amend the Land Acquisition Act 1960 to allow acquisition of the underground land in order to optimize the use of the land. This would also enable landowners who want to retain their surface lands or has plan for development of their surface land to keep their land.

What is proposed:

8.6 JKPTG proposes to introduce new element in the Land Acquisition Act. It is proposed to provide for the land acquisition in respect of underground land (whole or part of underground land). Legislative amendment is a prerequisite to introducing land acquisition in respect of underground land, because section 7 of the Act provides that the land refers to “the area of such lands”. However, land acquisition in respect of underground land refers to the “depth”. It is proposed to extend section 7 of the Act to include land acquisition in respect of underground land. This proposed amendment involves land alienated without the depth being



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specified, where the depth of underground land utilization and enjoyment for surface landowners were not specified on the title.

Rationale for the proposal:

8.7 JKPTG considers that the proposal of the land acquisition in respect of underground land is a vitally important to optimize the land use. The introduction of land acquisition in respect of underground land is an extension of existing practices. In addition, introducing new concept of land acquisition will benefit both landowners and the Government.

How it will work:

8.8 It is proposed that the same process flow of the land acquisition as set out in the Land Acquisition Act will be used for application of the Land Acquisition Act in respect of underground land. Any changes to the process flow will be supported by guideline.

8.9 The proposed changes will also need consequential amendments in the National Land Code particularly regarding provision of issuance of title in continuation. The change made to the National Land Code is required to encompass land acquisition in respect of underground land and for better administration of disposal of underground land.

8.10 Table as indicated below indicate how the procedure would operate:

Procedure Requirement

Land acquisition plan

The form and nature of land acquisition requires 3 dimensional plan.

Payment of Compensation

Payment of compensation shall be made to land owner depending on the depth of underground land has been acquired.

Formal possession The Formal possession of the land will refer to the underground land below depth specified to the land owner.

The land below any depth specified to the land owner shall vested to the State Authority as State land.

Question 6:

Do you agree with the proposed amendment to provide clear procedure for land acquisition in respect of underground land. If not, please suggest any mechanism.



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Question 7:

Do you agree the concept for the provision to be made in the National Land Code for the procedure after acquisition of underground land? If not, why?

Question 8:

Do you agree for the improvement in the National Land Code for better administration and smooth implementation regarding disposal of underground land?

Question 9:

Do you believe that the proposed amendment will benefit the land owner? If not, why not?

Question 10:

Is it reasonable the land below any depth specified to the land owner shall vested to the State Authority as State land? If not, why not and what would be proper mechanism?

Prepared by: Land Acquisition Division, Department of Director General of Lands and Mines (Federal) Ministry of Natural Resources and Environment PUTRAJAYA 13 February 2015



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ANNEX – B

SAMPLE FORMAT FOR PUBLIC/RESPONDENTS FEEDBACKS AND COMMENTS

Director General of Lands and Mines (Federal), Department of Director General of Lands and Mines, Ministry of Natural Resources and Environment, Level 2, Wisma Sumber Asli, No. 25, Persiaran Perdana, Presint 4, 62574 Putrajaya (e-mail: [email protected])

PROPOSED AMENDMENT TO LAND ACQUISITION ACT 1960

SCOPE 1 : AMENDMENT TO FACILITATE THE IMPLEMENTATION OF LAND ACQUISITION IN RESPECT OF STRATIFIED PROPERTIS SCHEME

QUESTIONS

Question 1:

Do you agree with the proposed changes to the Land Acquisition Act to enable the implementation of the land acquisition in respect of stratified properties scheme? If not, why not and would be appropriate?

COMMENTS

RESPONDENT NAME : CONTACT NUMBER : E-MAIL :

proposed amendments to strata titles act 1985 and land ... · proposed amendments to strata titles...

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