DEALINGS –PART 1Areej Torla areej@iium.edu.my

Dealings under NLC

“Dealings” definition in section 5 Any transaction with respect to alienated land Effected under the powers conferred under

Division IV Does not include any caveat or prohibitory

order.

Division IV:

1. Transfer

2. Lease and tenancy

3. Charge and lien

4. Easement

Instrument of dealing

Section 206(1) Every dealing shall be effected by the relevant

instrument prescribed for that purpose. Must be properly registered.

TRANSFERS

What can be transferred?

Section 214 The whole, but not part only, of any alienated

land; The whole, but not part only, of any undivided

share in any alienated land; Any lease; any charge; any TER

Peter Lai Kee Chin [1973] 2 MLJ 33 A made a gift inter vivos of an undivided share

in his land to his wife by executing a memorandum of transfer whereby he transferred the whole of his interest in the land to himself and his wife in undivided equal shares.

Court: This device is not an infringement of section 214(1)(a)

How to transfer

Form 14A (for transfer of land, undivided share and lease) S 215(1), S 217(1), S 218(1)

Form 14B (for transfer of charge) S 218(2)

TER may be transferred by word of mouth or by a written instrument in any form. (no registration needed). S 220(1)

Effect of transfer

Section 215 Title is passed to the transferee upon

registration Confers indefeasibility of title or interest It is subject to existing encumbrances and

conditions or restrictions in interests, if any.

Transfer of agricultural land the land shall not become less than 2/5 hectare (1/2 acre)

Does a TER bind the new owner?

In TER, a tenant’s right shall be protected and bind the new owner only if the tenancy is protected by endorsement.

Than Kok Leong v low Kim Hai [1983] 1 MLJ 187

Court: A TER does not bind a subsequent purchaser unless prior to the sale and transfer, an endorsement of the tenancy had been made under S 213(3).

Who can transfer land?

Only the registered proprietor Md Kamis Yaakob v Ismail Abdullah [1995] 2

CLJ 238

Nemo dat quod non habet (no one gives what he does not have)

Transfer of estate land

Section 214A “…no estate land is capable of being

transferred…unless approval of such transfer…has first been obtained from the Estate Land Board…”

Consent of Estate Land Board is needed in order to transfer estate land.

Case: Kumpulan Sua Betong (Note: this case was decided before the 2001 amendments where

consent was required for transfers to two or more persons)

Effect of contravention: guilty of an offence Section 214A (10A)(a)

What is “estate land”?

Section 5: Definition S 214A (11) and (12).

1. Agricultural land held under one or more than title, and

2. Area not less than 40 hectares, and

3. The lands are contiguous

What is “Estate Land Board”?Section 214A(3)

The object of section 214A is to prevent and prohibit the fragmentation of estate land within the meaning of subsection (11) of section 214A at the material time.

Case: Erico Estates Sdn Bhd [1980] 1 LNS 19

Rengamah v Rengasamy v Tai Yoke Lai [1998] 1 CLJ 987 Issue: Whether the land is an estate land. Plaintiff failed to establish that the land is

agricultural land. Court: the land was not an estate land.

LEASES & TENANCIES

Definition: “Lease”

A conveyance by which the proprietor of land (lessor) grants to another person (lessee) an interest in the land less than a freehold and less than that to which the lessor himself is entitled.

LESSOR LESSEELEASE

Section 5 NLC: “Lease”: registered lease or sublease of an

alienated land Therefore, excludes a lease agreement an

equitable lease and a TER.

Characteristics of a lease

1. Lessee enjoys a right of exclusive possession

2. Duration is specific and certain

3. Lessor has an intention to create a lease and not a license

Intention can be determined by written agreement or by conduct

Note: distinguish between a lease and a mere license.

Power to grant lease Section 221

What can be leased? The whole of alienated land Part of alienated land

Who can create a lease? The lessor, lessee or sub lessee

Duration of lease

Section 221 Must exceed three years Maximum term:

99 years (for whole of land) 30 years (for part of land)

If does not exceed 3 years Tenancy Exempt from Registration (TER)

Differences between leases & TERs

Lease Tenancy

Section 221, 222 Duration: exceeding 3 years Proprietor, lessee, sub

lessee can create lease. Registration by Form 15A

(lease) or Form 15B (sublease), and attach a plan and description (if lease of part of land)

Section 223 Duration: not exceeding 3 years Proprietor, lessee, sub-lessee,

tenant can create TER Created by word of mouth or

written instrument in whatever form.

Exempted from registration but may make endorsement to protect the TER Section 213(3).

Effect of unregistered lease

Margaret Chua [1961] MLJ 173 Although the agreement for a lease for 25

years was void for lack of registration, but it was valid as an agreement for a lease enforceable in equity.

Effect of uncertain duration

Effect of a tenancy “for as long as the tenant likes”?

Before NLC: Karuppan Chetty v Suan Thiam [1916] 1 FMSLR 300 considered as a void agreement

After NLC: Siew Soon Wah v Yong Tong Hong [1971] The agreement is good as a lease agreement. Section

206(3)