Developers snapping up available plots of land is a common practice, as we see many new projects mushrooming up all across the country.
However, land purchase by individuals is actually pretty common too in Malaysia. Especially now with high property prices, some have opted to purchase land to build their own home.
While there are pros and cons to this, it is believed that, if you’re able to get the best deal in a right location, it’ll be cheaper to own a property that way.
Now, before you go searching for that perfect plot of land, you must first understand the various issues related to owning one.
What’s unique about lands in Malaysia is that they have different types of status. It determines how the land can be developed, the type of property that can be built, the length of the tenure, and who can be the owner, among others.
There are also states with their own set of restrictions, such as lands which can only be bought by those who are born and/or residing in those particular states.
With all the different types and limitations to consider, it can be very confusing to some people, and may lead to costly (or irreversible) mistakes when it comes to obeying the permitted usage or development.
You also have to know that each type of land comes with certain conditions, and if you perform any unauthorised development, you could face a hefty fine by the local authority.
That’s why it is important to always check the land title when dealing with any type of land. It will provide you with information such as the ownership status, land status, as well as the conditions that landowners will need to comply with.
Let’s read on to know more about the four types of land in Malaysia, and whether you will be able to change the status if you ever need to!
What Are The Four Types Of Land In Malaysia?
The four main types of land ownership in Malaysia are:
- Freehold
- Leasehold
- Bumiputera Lot
- Malay Reserve Land
As mentioned earlier, each land has its own status and conditions which are clearly written on the land title. Land status is the type of ownership the land holds, while land conditions refer to the use of land.
According to Section 52 of the National Land Code (KTN) 1965, the conditions imposed on each land are divided into three categories of land use, namely:
- Agriculture
- Building
- Industry
“All landowners must use the land in accordance to the category of land use and the express condition stipulated in the title. Failure to do so is a breach of condition of the land alienated and the State Authority can forfeit the land. As such, any landowner who intends to use his land for another category of use other than the category stated in the title, must apply to change the category of land use accordingly. Sections 124 and 124A of the National Land Code and the respective State Land Rules allow landowners to apply for such changes. The State Authority will charge an additional premium on all applications approved for change of use.”
The above statement obtained from the Valuation and Property Services Department (JPPH) shows how important it is to follow the conditions of the land so as not to break the law.
But what if your plan is not in line with the status/condition of the land? This leads us to the all-important question…
Is It Possible To Change The Status Of Your Land?
Well, we already know that ownership status and land conditions are two different things.
It is almost impossible to change the status, except for reasonable and unavoidable reasons, for which you must first consult the relevant land office.
What that means is, landowners need to apply for a change in land conditions. For example, from an agricultural land to one for buildings, or even to an industrial site, and so on.
Now, going back to the question above, the answer is: You CAN change the land conditions, BUT only if there are no restrictions on your land.
This process is called Change of Land Conditions, which refers to any of the following:
- Change in category of land use
- Imposition of new category
- Cancellation/amendment of express conditions so that the land can be used for other purposes besides those currently permitted
In general, as advised by JPPH, the application must be submitted to the relevant Land Office/Land and Mines Office together with all necessary information, which is:
- Copy of the title
- Property address (if any)
- Site plan
- Location plan
- Development proposal
- Feasibility study (if any)
- Valuation report (if any)
This application also varies according to the land status, whereby the same method is used for Freehold, Leasehold, and Bumiputera Lot, but different for a Malay Reserve Land.
How To Change The Category Of Land Use For Freehold, Leasehold, And Bumi Lot?
Landowners can apply for a change in category of land use, and the express conditions, through the State Authority.
To give you a better understanding of the whole process, we will be using the steps obtained from the website of the Selangor Land and Mines Office. This may vary by state, so be sure to check with your respective state office.
How to apply?
- Through the Director of Land and Mines Selangor
- Submitted by the landowner himself or the Holder of Power of Attorney (POA)
- The application must be accompanied by supporting documents
The step-by-step process:
- Fill in 2 copies of the Schedule Form XVI (Paragraph 51 (p)) complete with the signatory of the landowner or Holder of Power of Attorney (POA) or company (Common Seal). The POA must be registered in the High Court and the Registrar of Titles/Office Land if the application is made by a representative of the landowner.
- 1 copy of the Memorandum and Article of Association together with the complete and latest Forms 24 and 49 or the ‘Annual Return of Company Having a Share Capital’ certified by the Licensed Company Secretary (for company application).
- Company information by the Companies Commission of Malaysia (for company application).
- 10 coloured copies of the original site plan
- Should contain the Key Plan and Site Plan as listed by the Associate Town Planner.
- The plan must be signed by the landowner/POA holder.
- 1 copy of site plan in AutoCAD format.
- 1 copy of Proposed Development Report.
- Reviews from the technical departments below:
- District Land Office – 3 pieces of pictorial report for the site and the development location surrounding in A4 format, and 1 unit of soft copy in the form of diskette or compact disc in PowerPoint format.
- Local authority.
- Town and Country Planning Department.
- Department of Minerals and Geosciences (for Class II and III slope highlands).
- Department of the Environment (for Class II and III slope highlands and industry).
- Department of Irrigation and Drainage.
- Department of Manpower (agricultural land/farm 100 acres and above).
- Department of Agriculture (agricultural land/farm 100 acres and above).
- National Physical Planning Council (250 acres and above).
- Copy of the latest Certificate of Official Search valid for 6 months.
- Copy of current year quit rent receipt.
- Copy of land title.
- Letter of written consent from a registered stakeholder such as a Mortgagee, Caveat, or tenancy law claim exempted from registration.
- List of estimated residential/business/industrial building prices.
- 1 layout plan and pre-calculation plan in the form of digital soft copy – diskette or compact disc in PowerPoint format.
How To Change The Category Of Land Use For Malay Reserved Land?
How to apply?
- Through the relevant District Land Administrator, submitted to the Land and District Office involved.
- Submitted by the landowner himself or the Holder of Power of Attorney (POA).
- The application must be accompanied by supporting documents.
The step-by-step process:
- Fill in 3 copies of the Schedule Form XVI (Paragraph 51 (p)) complete with signature of landowner or Holder of Power of Attorney (POA) or company (Common Seal). The POA must be registered in the High Court and the Registrar of Titles/ Office Land if the application is made by a representative of the landowner).
- 1 copy of Memorandum and Article of Association together with the complete and latest Forms 24 and 49 or the ‘Annual Return of Company Having a Share Capital’ certified by the Licensed Company Secretary (for company application).
- 15 coloured copies of the original site plan containing the Key Plan, Location Plan, and Site Plan prepared by the Associate Planner and signed by the landowner/POA holder and the registered Planner.
- 1 copy of site plan in AutoCAD format.
- 3 copies of Proposed Development Report according to the guidelines set by the Town and Country Planning Department (DTCP).
- Reviews from the technical departments below:
- District Land Office – 3 pieces of pictorial report for the site and around the development location in A4 format, and 1 unit of soft copy in the form of diskette or compact disc in PowerPoint format.
- Local authority.
- Town and Country Planning Department.
- Department of Minerals and Geosciences (for Class II and III slope highlands).
- Department of the Environment (for Class II and III slope highlands and industry).
- Department of Irrigation and Drainage.
- Department of Manpower (agricultural land/farm 100 acres and above).
- Department of Agriculture (agricultural land/farm 100 acres and above).
- National Physical Planning Council (250 acres and above).
- Copy of the latest Certificate of Official Search valid for 6 months.
- Copy of current year quit rent receipt.
- Copy of land title.
- Letter of written consent from a registered stakeholder such as a Mortgagee, Caveat, or tenancy law claim exempted from registration.
- List of estimated residential/business/industrial building prices.
- 1 layout plan and pre-calculation plan in the form of digital soft copy – diskette @ compact disc in PowerPoint format.
- Application fee for change of Malay Reserve Land conditions.
How Much Are The Fees For Changing The Category Of Land?
The application fees are the same for any land status, as below:
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Application Fee
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Premium Rate That Is Applied
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According to the rates set out in the Selangor Land Rules (Amendment) 2003
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It is a complicated process and many things are needed to apply for change in category of land use. So, you have to be very careful for every step of the way!
What Are The Factors That Could Prevent A Land From Being Successfully Converted?
Some scenarios that you should be aware of so that you can avoid it if possible, are:
1) Name that is yet to be changed
When you buy a piece of land, you need to make sure that the name on the title is changed as soon as possible.
Since the process to change the conditions needs to be done by the landowner or the Holder of POA, you will not be able to apply if the land does not belong to you in full.
2) Land buyer has been deceived
There are plenty of cases of fraud happening in Malaysia. So, always make sure that you are dealing with a trustworthy agency, agent, or landlord.
You can always check with the relevant land office about the status of existing land ownership to determine if you have the right person.
3) Restrictions on land title
If there is a restriction on the title that says the conditions of the land are non-exchangeable, most likely it is something which you cannot negotiate on.
You can, however, still try to contact the land office to find out if the restriction can be amended or lifted. Who knows, you might get lucky and be permitted to change the land conditions after all!
4) Many nominees
This can be a problem because when there are many landowners, it will require the consent of every single one of them to change the conditions.
There may be those who might not agree, don’t want to interfere, or can’t be contacted. Simply put, it is not easy to get everyone to sign.
5) Overdue fees
As you know, there is a quit rent that needs to be paid by landowners in Malaysia. If you, or the previous owner(s), have missed some of the payments, it could affect the process of your application.
Most likely, you will need to settle all of the overdue fees before your application to change the land conditions can be processed.
As you can see, applying to change the land conditions is not as easy as you might think. Thus, if you can, make sure to find a land with the status and conditions that fit your plans.
This is important to ensure that your plan is in accordance with the laws which have been set by the government.
Finally, before you purchase any land for developing or even when buying an already-developed property, always remember to check the land title, so that you can avoid any legal issues when you decide to sell in the future!
Relevant Guides:
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