Sunday, December 17

Freehold dilemma

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THE ordinary citizen who intends to buy a house and proceeds to do so is often attracted by the picturesque display of what is advertised, usually through a newspaper or a huge billboard.

This could in some cases lead to the buyer visiting the site office where attractive miniature models and an actual model unit will further influence the prospective buyer. All may appear well and the prospective buyer may put forth the deposit required.       

However, the frustrations and regrets of a house buyer sometimes emerge many years later as illustrated by a newspaper report on the residents of a housing estate in Kuala Lumpur. According to the report: “Residents of Taman Cuepacs in Segambut, Kuala Lumpur, are frustrated that their applications for freehold status from leasehold have been rejected by the Federal Territory Land and Minerals Department.”

The house buyers who are government servants booked the houses in 1973. At that time they were informed that the land was freehold. They said that “the property developer, Syarikat Koperasi Kerjasama Cuepacs, had put up signboards and banners stating that it was a freehold property.”

The developer had applied to the Land and Minerals Department for what was then “agricultural land” to be developed. But when the house buyers signed the Sales and Purchase Agreement, they were shocked to see that the status of the land was leasehold.

This change would have come about at the stage when the application to convert the existing agricultural land to residential, and have the land sub-divided, was made.

A lease is a grant for a fixed number of years. This is in contrast to freehold which is like giving the land away permanently and is also referred to as a grant in perpetuity.

When the state alienates land, it is within its powers to decide whether to alienate it as freehold or leasehold and if so, for how many years. In the case of a lease for residential purposes, it is usually for 99 years though it could be shorter.

There are, of course, leases of 999 years which were issued prior to the present legislation. In the Peninsular, it is the National Land Code which generally governs the subjects, while in Sabah and Sarawak, it is the Land Enactment and Land Code. Other state laws also affect land dealings.

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