Saturday, December 29, 2007

Difference Between Individual and Strata Title

In general, an individual title is for a property which has its own land and this usually means that the land itself is owned by the proprietor. Strata titles are generally for properties in a multi-storey building and this usually means that the land belongs to the proprietors from the time of the multi-storey building.

Whilst properties which have their own land will be issued with individual titles, the owner of a unit in a multi-storey building (e.g. apartment, flat, condominium, townhouse, office or even shoplot) will have their right of ownership of the unit they purchased. Every owner will have their share of the land/building which is stated as Unit Share in their Strata Title when issued based on the built-up size of their unit.

It can take years for a strata title to be issued by the relevant authorities. Pending the issuance of the strata title, the owner of a unit can still sell or assign their unit and the non-availability of the strata title does not in any way affect the owner’s right to their unit.

For the sale of a property with individual title the transfer instrument is in Form 14A as prescribed in the Malaysian National Land Code 1965. As for the legal charge of the property with individual title by the owner to his financier Form 16A is applicable. Both the transfer and the charge will involve the land office and the instruments must be presented to the land office for registration.

For property with a strata title still to be issued a deed of assignment is executed to buy a property (if the seller is not the developer, i.e. a sub-sale) or to give security for a loan. A deed of assignment transfers all rights, title, and interests in respect of the property and under the previous sale and purchase agreement to the purchaser. Likewise for an owner to provide the security over the property to his financier, a deed of assignment assigns all rights, title, and interests in respect of the property and under the previous sale and purchase agreement to the owner’s financier. Once the strata title to the unit has been issued, the owner will transfer and/or charge his unit in the same way as a property with individual title.”

Friday, December 28, 2007

New property hot spots in the Klang Valley

NUMEROUS new property launches have been unveiled in the Klang Valley this year with developers scrambling to show off their highend condominiums bearing none other than the alluring address of the Kuala Lumpur city centre (KLCC) or its vicinity.

The growing list of projects in and around KLCC includes the likes of Hampshire Residences, Park Seven, Troika, Idaman Residence, Suria Stonor and My Habitat to name a few.

For those eyeing these exclusive properties, they must be prepared to fork out a hefty sum.

For instance, Hampshire Residences which is located off Jalan Ampang along Persiaran Hampshire, is priced at between RM600 and RM700 psf.

Suria Stonor, a project by Glomac Bhd, starts from RM600 psf for its standard units with the penthouses going for RM840 psf onwards.

The average price per sq ft for Idaman Residence is RM720.

Projects nearer to KLCC such as The Binjai already tops RM1,000 psf.

Why is it that the KLCC area commands such a high price? Why does a project in Jalan Ipoh, which is still very much within the city, for instance, offer such a huge discount to the KLCC prices? Jalan Ipoh, after all, is KL, as is KLCC.

These were among the questions directed at Ho Chin Soon of Ho Chin Soon Research Sdn Bhd, at the recent two-day seminar FinEx 2005, organised by The Financial Planning Association Malaysia, held at at the Mid Valley Convention Centre.

Ho’s response: "Location is a crucial factor that determines the price of the property.

For example, a unit that fronts the KLCC park without any obstructions to the view will have a high price tag attached with it.

At the end of the day, price is very sensitive and it has a positive relationship with the location of the development."

Ho, who spoke on "Growth Corridors in the Klang Valley", provided suggestions about plausible development corridors that he said are poised for rapid growth in the Klang Valley.

He sees the current growth corridors of Sungai Buloh-Damansara and Puchong-Seri Kembangan being developed soon and that new growth corridors would emerge.

And where would these be? Ho identifi ed the next hot spots in Klang North and Klang South.

Klang North would include areas such as Kapar, Meru, Shah Alam and Klang while Klang South refers to Port Klang and West Port

Why these areas?

Growth corridors are very dependent on accessibility, explained Ho, drawing attention to the Guthrie Corridor as among the latest highways that helped to open up the Klang area.

The growing attractiveness of Klang and Shah Alam has not gone unnoticed.

More and more developers have bought into land in these areas and they include established players, the likes of SP Setia, TA Properties and YNH Property Bhd.

"There is no doubt the next hot spots may be Klang North and Klang South; the centre of gravity for the Klang Valley is not expected to move southwards. Instead, it will ‘hover’ around Petaling Jaya State New Town," added Ho.

Another speaker at the seminar was P B Nehru of City Valuers & Consultants Sdn Bhd, who spoke about property as an investment.

He said properties being bought for investment purposes should be analysed differently from those being purchased for owner occupation.

"Different properties in different locations provide different rates of growth and return. If one wants to maximise total return from a property investment, one must have detailed and intimate knowledge of the entire property market and not just the individual property that one is interested in," said Nehr

Nehru identified a list of critical factors which he called the 10 commandments of property investment that must be investigated and analysed if one wishes to maximise his total returns from any property investment.

Top of the list is rental yield and rate of capital value growth .

He has analysed the Klang Valley property market from 1997 to 2005 for areas with leading capital value growth rate per annum.

Of the 15 The growing attractiveness of Klang and Shah Alam has not gone unnoticed.

More and more developers have bought into land in these areas and they include established players, the likes of SP Setia, TA Properties and YNH Property Bhd.

"There is no doubt the next hot spots may be Klang North and Klang South; the centre of gravity for the Klang Valley is not expected to move southwards. Instead, it will ‘hover’ around Petaling Jaya State New Town," added Ho.

Another speaker at the seminar was P B Nehru of City Valuers & Consultants Sdn Bhd, who spoke about property as an investment.

He said properties being bought for investment purposes should be analysed differently from those being purchased for owner occupation.

"Different properties in different locations provide different rates of growth and return. If one wants to maximise total return from a property investment, one must have detailed and intimate knowledge of the entire property market and not just the individual property that one is interested in," said Nehru.

Nehru identified a list of critical factors which he called the 10 commandments of property investment that must be investigated and analysed if one wishes to maximise his total returns from any property investment.

Top of the list is rental yield and rate of capital value growth.

He has analysed the Klang Valley property market from 1997 to 2005 for areas with leading capital value growth rate per annum.

Of the 15 key areas studied, the 3-storey shop-offi ces in Bangsar Baru scored the highest percentage of capital value growth rate of 6.25% per annum.

The 4-storey shopoffi ces in Desa Hartamas, meanwhile, recorded 5.75% capital growth per annum. Bungalow lots in Damansara Heights, on the other hand, enjoyed capital growth rates of 4.8% per annum.

"Location is an important criteria for any property. But more importantly, correct location, correct property and correct valuation are the key factors to successful investments," said Nehru.

Malaysia- Property Financing Takes New Turn

FINANCING of property developments has taken on a new form recently in Malaysia with the wholesale selling of a development to a financial institution which then helps to market the property.

With Kuwait Finance House (M) Bhd (KFHMB)'s innovative Islamic way of funding a project called Mudharabah, it has revolutionised real estate development financing by applying the Islamic principle of sharing risks as well as profits.

To be offered such a facility is a stamp of trust of the project's success with KFHMB being associated with projects such as The Pavilion and The Avare in Kuala Lumpur.

Mudharabah is a common structure in Islamic financing where a partnership is formed with a party providing capital and the other party managing the project.

In the case of real estate projects, this enables a developer to concentrate on developing a property leaving the lender with the marketing.

Take the recent signing of a Mudharabah agreement between Corner Side Realty Sdn Bhd (CSRSB), a member of the Prima Prai Group and KFHMB as an example.

Under the Mudharabah financing facility KFHMB will provide a capital of RM74.7mil to CSRSB to underwrite the sale of 30 bungalows in Phase 1B of the RM500mil, The Sanctuary, a freehold development in Batu Uban, Penang.

When the bungalows are eventually sold to the end-purchasers, the profits from the sale would be distributed to KFHMB and CSRSB, based on a profit sharing ratio.

Mudharabah ensures that the project is guaranteed completion as the developer has locked in his sales.

It also gives purchasers confidence as they know that the project will be completed and this in turn attracts more potential buyers and boost property values.

Besides having the financial muscle, KFHMB through its parent company Kuwait Finance House has a vast international network of potential customers.

Its financing structure is not only in real estate but also in various Islamic banking services including lease financing, trade finance, direct investments and portfolio investing.

Being the first to offer such a facility in Penang, it also reflects the commitment of KFHMB in increasing its investments in Penang and in developing its presence in the state.

KFHMB managing director Datuk K. Salman Younis, who described Mudharabah as a “very fair form of banking”, sees good potential in doing business in Penang, given that the government plans to spend RM23.8bil on the northern region under the Ninth Malaysia Plan.

This allocation among others would go into major infrastructure projects such as the Penang Outer Ring Road, Penang monorail system and Second Penang Bridge.

“Penang also stands to benefit from the influx of tourist arrivals which will invigorate activities in the hospitality sector.

“All these factors will act as catalysts for the economy in Penang and revive the property and construction sectors,” Salman said, adding that KFHMB would work with Prima Prai Group for future strategic alliances and co-operation.

Prima Prai Group managing director Datuk Mohd Ramzan Ibrahim said it was the group's first Mudharabah facility.

Phase 1 of The Sanctuary comprising 21 detached and 11 semi-detached houses worth RM68mil has been completed and occupied.

Phase 1B with 35 (including the 30 in the Mudharabah deal), three-storey detached houses will be launched early next year.

By S.C. CHEAH

Property or Equities?

According to some research in the United States, 90% of US traders lost their money. In Malaysia, there are no such statistics to indicate how many retailers who traded in Bursa Malaysia suffered the same fate. The situation in Malaysia may not be as bad but the percentage of losers is definitely not far from 90%.

More people make from property
On the other hand, more than 90% of property investors make money in Malaysia, except for those unfortunate ones who fall prey to defunct developers or bought properties in the wrong locations like Bukit Beruntung.
From the above observations, does it mean that property is a far better investment? Some people reckon so, while others still cannot resist the attraction of potential large capital gain provided by the stock market; after all, two of the richest men in the world, Warren Buffett and George Soros, make their fortune from the equities market.
In the above comparison between investing in stocks and properties, it is the traders who lost money but equities investors should make money in the long run. Unfortunately, most Malaysians who invest in both asset classes seem to think that they make more money from the property market than from the stock market.

Both are attractive
Property and equities investments are both attractive and could be highly profitable too. That is possible provided one has the right approach and strategy.
There are many people who make huge amounts of money from both these investments. Many of the world's richest men made their fortune by investing in properties or shares or both.
Doubling your investment by investing in the property or stock market is not a dream, and the capital required is within the means of most individuals. But those in the market can tell you that these two classes of investment are quite different.

Return — property vs share
How did property investment perform in the past? Unlike the stock market, there is no property index that can provide a clear indication of the long-term performance of property investment in Malaysia.
A simple comparison of double-storey houses in a few prime locations in Kuala Lumpur (Table 1) seems to indicate that the capital gains of these properties were about 6.2% - 6.9% over the past 16 years. The gains, however, do not include rental incomes which can yield another 3% per annum. As such, the total average return of these superb investments was about 9% per annum, which is pretty attractive.
Bear in mind, these are prime properties. The second-tier properties will have lower return, for example those in Ipoh, Seremban, etc. Over the same period, the best property stock, IOI Properties, gained 19.9% per annum. However, there were also many property stocks which performed poorly.
If we use the stock market benchmark, the KL Composite Index (KLCI), the gain over the past 16 years was a mere 4.3% per annum. The poor performance of the KLCI over the past 16 years could be due to the financial crisis in 1997/98, which affected the stock market much more than the property market.
On the other hand, if we look at a longer duration, say from 1978, the average compounded return of the KLCI was a more respectable 7.2% per annum. If we include dividend income, the return will be in the range of 9%-plus per year for an average Malaysian share.

Shares — better return, higher risk
The comparison indicates that the return of stock market investment was as good as that of property investment. In certain cases and during certain periods, it can be even better than property investment.
However, if risk is taken into consideration, the risk-adjusted return of property investment could be better than stock market investment given that the volatility of stock prices is very high whereas property prices are more stable.
Besides price performance, there are many other issues which need to be considered as well. Table 2 shows a comparison between these two asset classes. There are obvious advantages of investing in properties — stable prices, high gearing, a good collaterised asset, steady flow of incomes, etc. But there are also many disadvantages in property investment such as lumpy investment, not easily divisible, higher transaction cost, longer duration taken to complete a transaction, etc.
Those investing in the stock market would agree that investing in stocks and shares is so much easier and one can get in or out of the market fairly fast. Property proponents, on the other hand, find investing in the stock market too volatile. Their hearts could "go up and down with the stock market gyration every day".
Both are equally good
In fact, properties and stocks are equally good investment. The high leverage of property investment can provide good capital gain over time. The limited supply of well-located properties will ensure steady appreciation in value. The inefficiency in property market also provides many opportunities.
On the other hand, equities investment provides the liquidity and excitement. Shares are like quasi cash, whenever there is an urgent need for money one can sell some shares, but that is not possible in the case of property investment. Investing in good stocks can be very profitable and it does not lose out to investing in property market. There are many blue-chip investments which yield substantial capital gains over time. Genting, Public Bank, IOI Corporation are some of the familiar names around.
is no conflict between property and share investment as each of them provides good return and in fact they complement each other. Property can be kept as long-term investment while shares can be held as medium- to long-term investment.
By Ang Kok Heng

Thursday, December 27, 2007

Indefeasibility means impossible to be defeated

THE term indefeasibility means that something is impossible to be ‘defeated’ or made void.
Where fraud or forgery is involved in the transfer of land titles, legal systems around the world adopt either one of two principles – “immediate” or “deferred” indefeasibility. Which one is practised depends on the laws of the respective countries.

Immediate indefeasibility is a situation where a transferred title is valid, regardless of any element of fraud or forgery involved. Countries such as Australia or Canada practise this, and their respective governments have in place a fund that compensates victims of such cases.
Deferred indefeasibility, on the other hand, only protects a subsequent purchaser to a title that is defeasible. Therefore, if one party obtains a title where fraud or forgery is involved, this title can be defeated.

However, if this same party sells it to another purchaser who buys it on good faith, that title is considered to be indefeasible. The indefeasibility therefore “defers” across one transfer of title (the one where fraud or forgery is involved) to the next purchaser who buys it in good faith.
Indefeasibility under the National Land Code 1965
The relevant parts that concern the principle of indefeasibility in Malaysia is spelt out in Section 340 of the NLC as follows (omissions made for brevity)
Section 340. Registration to confer indefeasible title or interest, except in certain circumstances.
(1) The title or interest of any person or body ... shall, subject to the following provisions of this section, be indefeasible.
(2) The title or interest ... shall not be indefeasible -
(a) in any case of fraud or
misrepresentation ... or
(b) where registration was
obtained by forgery ... or
(c) ...

(3) Where the title or interest of any person or body is defeasible by ... circumstances specified in sub-section (2)-
(a) it shall be liable to be set
aside ... to whom it may
subsequently be transferred; and
(b) any interest subsequently
granted thereout shall be
liable to be set aside ... :

Provided that nothing in this sub-section shall affect any title or interest acquired by any purchaser in good faith and for valuable consideration....

(4) ... Briefly explained, 340(1) says that all titles are indefeasible, and 340(2) states that fraud or forgery, amongst other things, can render the title defeasible.
340(3) states that if a defeasible title – as explained in the 340(2) – is sold to a subsequent purchaser, it remains defeasible.

However, 340(3) has something known as a proviso (an exception to the rule), and it says that if the subsequent purchaser buys it in good faith, (i.e., thinking that the title was valid and the deal fully legitimate) and paid for it (in money or otherwise), then the title will be indefeasible, and he gets to keep the land – and this essentially spells out the concept of ‘differed indefeasibility'.
The point of contention here is that the proviso appears to limit itself to ‘this sub-section', which might be taken to apply to 340(3) only.

Many legal practitioners and academicians are of the opinion that the Federal Court did not arrive at the correct decision in Adorna Properties Sdn Bhd v Boonsom Boonyanit.
According to assistant professor Dr Sharifah Zubaidah Syed Abdul Kader, there appears to be nothing wrong in the way S340 of the NLC is worded.

“The law is fine, but it is how the judges have interpreted it. If you were to read the Court of Appeal's decision, it appears that the Federal Court made its decision on the wrong premise. There was no reason for it to depart from the practice of differed indefeasibility,” she opines.
Report by the star 23rd Dec 2007

Wednesday, December 26, 2007

How fraudulent land transfers take place

PUTTING himself in the shoes of a fraudster, National House Buyers Association (HBA) honorary secretary-general Chang Kim Loong reckons there are many parties involved in fraudulent land transfers.

“There is a lot of work to be done, but it is not something that is impossible,” said Chang, adding that there was a lot of monetary gain for the fraudsters.
Very likely, involved parties would include the related parties (vendor and buyers) and their respective lawyers, the land office, the land valuation department and the stamping office. And usually these transfers take a very short time.
“When the transaction takes two to three weeks, there is something fishy,” he said adding that a “conservative” transaction would take anything from six to nine months.
Chang says that usually idle land owned by foreigners or senior citizens is targeted. The fraudsters would find out details of a plot of land from the land office and survey department.
The fraudsters then either forge the title deed or get a replacement by pretending to be the owner of the land.
They would conveniently lodge a police report. The land office would then need the police report sworn with a statutory declaration and pay a requisite fee (about RM300) for the replacement title deed, which usually takes four to six months to obtain after the requisite gazetting.
Once the deed is obtained, the land is ready to be sold.
“You should be suspicious if it is a cash only deal or the land is being sold below value,” said Chang. If a bank loan is taken to finance the purchase, the bank's lawyers will also conduct relevant searches to determine the vendor is not a bankrupt as well as a valuation report on that landed property.
“When it is time to present to the land office registration, the lawyers do another search to ensure that no documents prohibiting the dealings such as a caveat or a prohibitory order,” said Chang.
When it comes to selling the land, all that is needed is the seller's and buyer's identity cards, the original copy of the Grant/ title deed, up-to-date quit rent bills and assessment receipts, which have to be provided by the seller.
Certified true quit rent receipts can be obtained from the land office for a fee of RM10. Before the final purchase, the stamping office sends the Memorandum of Transfer (MOT) to the nearest valuation department which adjudicates the value of the property and imposes the stamp duty, which is to be paid to the stamping office.
The last item is paying the requisite registration fee to the land office after the buyer shows proof of a paid stamping fee.
“With so many cases being lodged, the prosecution and investigators should be able to work out the modus operandi of the fraudsters,” said Chang adding that he was disappointed with the number of arrests made pertaining to the cases.
By RASHVINJEET S. BEDI -the star 23rd Dec 2007

Land scams on the rise

Landowners beware! Your property is at risk. There has been a rising number of land scams in recent years, especially in the Klang Valley. Worse, the scams are targeting higher-value land too.
Government statistics revealed in Parliament recently showed that there were 16 land scams recorded in 2001, 19 in 2002, 22 in 2003, 32 in 2004, 35 in 2005 and 80 last year.
Police statistics also showed that last year the value of land involved in the scams was almost RM4.9mil. This year, up till October, the value of the land was more than RM10.4mil.
Only four people were arrested over the offences last year and just one this year.
National House Buyers Association secretary Chang Kim Loong expressed concern over increasing incidences of land scams and the high number of unsolved cases.
“This could lead to a loss of confidence in the Malaysian property market,” he said.
Chang urged the Government to initiate an insurance scheme to indemnify anyone who suffers loss due to fraudulent land transfer.
Commercial Crimes Investigation Department legal / inspectorate division principal assistant director ACP Tan Kok Liang said that in certain cases it was difficult to get evidence against the perpetrators because they used other people's identity.
The most recent case involves Taiwanese businessman Chen Wei Pin, who found that a private caveat had been entered on his land by a director of Zen Zaman Sdn Bhd, claiming that Chen had sold the land to his company. Chen denied any such transaction.
His plight was brought up by the MCA Public Service and Complaints Department, which has received 18 such complaints involving land worth RM30mil in the past five years.
Assistant professor Dr Sharifah Zubaidah Syed Abdul Kader of the Public Law Department of the International Islamic University Malaysia said the law did not fully protect landowners, especially in cases of forgery.
“Even if they are able to prove the title is theirs, they can still lose their land. The court will inevitably rule against them as long as it can be proven that the purchaser had bought the land on good faith,” she added.
Roger Tan, the Bar Council's Conveyancing Practice Committee chairman, said the onus had fallen on landowners to conduct regular checks on their land title.
By JOSEPH LOH - thestar 23rd Dec 2007

Land Scams- in Malaysia

With the growing number of land scams and increased value of property involved, serious measures, including by the law, are urgently needed to overcome the problems.

WHEN Taiwanese businessman Chen Wei Pin, 56, acquired a piece of land in the heart of Kuala Lumpur in 1990, he never expected to be a victim of land fraud.
He was shocked to learn that the Land Office’s computerised records showed that a private caveat had been entered by a director of a company, claiming that Chen had sold the land to his company.
Chen denies any knowledge of the transaction and although he holds the original title to his land, attempts to retrieve records of his ownership at the Land Office have proved unsuccessful. There is also no memorandum of transfer on the sale to the private company. He has since lodged a report with the Anti-Corruption-Agency (ACA).

Chen’s case is not isolated; there have been numerous other cases of land fraud. In a parliamentary session recently, Deputy Internal Security Minister Datuk Johari Baharum said that 16 cases were recorded in 2001, 19 in 2002, 22 in 2003, 32 in 2004, 35 in 2005 and 40 in 2006. There were 16 cases in the first five months of this year.

Police statistics however reveal that in 2006, there were 80 cases involving land worth RM4,874,567.30, while this year (up to October) there have been 49 cases involving land worth RM10,402,559.00 (See table on Page 29).

MCA Public Services and Complaints Department, meanwhile, has received 18 such complaints involving land worth RM30mil in the past five years.

The department's legal adviser Datuk Theng Book believes that such cases are on the rise.
“After publicising Chen’s case, we received many more calls from lawyers about this problem. Many of these cases seem to happen in KL and Selangor where the value of land is high,” he said.

“We are concerned over the numerous unsolved cases. There is a problem; just how are we going to solve the problem then?” said National House Buyers Association Secretary-General Chang Kim Loong.

The situation where a landowner can lose his land even though he holds a good title is a direct result of the Federal Court's decision in Adorna Properties Sdn Bhd v Boonsom Boonyanit. This case concerned the interpretation of the law as laid out in Section 340 of the National Land Code (NLC) 1965 (see sidebar).
In this now-infamous case, Boonsom Boonyanit, a Thai national, owned some land in Penang. She eventually discovered that an impostor claiming to be her – and with supporting identification documents as well as statutory declarations – had declared that she had lost the original title and managed to obtain a replacement title from the land office.
The impostor subsequently sold the land to Adorna Properties, who bought it on good faith, and did not suspect that there was anything amiss in the transaction.
When Boonyanit sued for the return of the land at the Penang High Court, she was unsuccessful. She appealed to the Court of Appeal (COA), which decided in her favour. However, Adorna Properties then made an appeal to the Federal Court, and won. In essence, Boonyanit – who has since passed away – lost her land without receiving a single sen for it.
Because it was a decision of the highest court in the land, it has to be followed by every other (lower) court in the country. A subsequent attempt to overturn the previous decision, made by Boonyanit's estate, was also defeated in the Federal Court.
As a result of this case, assistant professor Dr Sharifah Zubaidah Syed Abdul Kader of the Public Law Department of the International Islamic University Malaysia said: “The law now does not protect landowners – especially in cases of forgery. Even if they are able to prove the title is theirs, they can still lose their land. The court will inevitably rule against them as long as it can be proven that the purchaser bought it on good faith.”
Roger Tan, the Malaysian Bar Council’s Conveyancing Practice Committee chairman, agreed with this “The Adorna Properties decision has wreaked havoc on every landowner in this country. It not only puts a landowner at risk of losing his property to fraudsters and forgers, but also when the landowner loses his land to these crooks, he loses everything without any compensation or remedy.”

The root of the problem, according to Tan, is that, “lawyers have always interpreted S340 as outlining the principle of ‘differed indefeasibility’. Our NLC is based on this concept, and this decision has affected that.”

What is more perplexing, said Tan, is that the Federal Court had another chance to review the law after a recent COA case in July this year (Au Meng Nam & Another v Ung Yak Chew & Others). The COA essentially did not follow the Federal Court's decision in Adorna Properties, and reverted the title back to the original owners. But when the purchasers applied for leave to appeal to the Federal Court, it was denied.

“They should have granted leave and then dealt with the Adorna case. However, they refused to confront it.”
As a result of the current situation, the Bar Council submitted a memorandum to the Natural Resources and Environment Minister Datuk Seri Azmi Khalid that listed proposed amendments to the relevant sections of the NLC on July 24.
, an amendment bill to the NLC was passed in the last Dewan Rakyat sitting, which concluded on Dec 19.
“The NLC amendments did not deal with this issue, and the Bar Council is disappointed with this. Also, there appears to be no urgency on the part of the government to look into it,” Tan commented.

He further stated, “We want to make it clear that the principle under section 340 is that of deferred and not immediate indefeasibility.”
Given the current position of the law, Tan advised that precautions be taken.
“The dealings usually involve lawyers, and they must be both diligent and vigilant. They should do a search before they advise their clients to purchase the property or release the money.”
To that effect, Tan said, the Bar Council is in the process of changing its solicitor account rules to ensure that all withdrawals from the clients' accounts are made by cheque and not by cash so as to ensure it can be traced.

“Proposals have been made and we hope to have the rule implemented by next year,” he informed.
But until the NLC is amended or the Federal Court reviews its decision, the responsibility is on landowners to ensure that title to their property has not been transferred without their knowledge.

“Do regular searches every three months or so, which costs less than RM100 per search. And it is best to go through lawyers whenever they buy or sell property,” Tan advised.
Chang hopes that an insurance scheme backed by the government is initiated.
“Indemnify anyone who loses in fraudulent land transfer. The land office is a government agency and the government should be responsible if its house is not in order,” said Chang adding that special squad by the Land and Mines department to identify weaknesses in the national computerised land registration system be set up.

Chang hopes that it doesn't reach a stage where the Land Office makes buyers sign a letter of indemnity, just as how the Road and Transport Department (JPJ) does when people buy used cars.
“This means that you are cannot sue JPJ if they make a mistake such as recording the wrong chassis number for instance. I am just worried that this will apply to property as well one of these days,” said Chang.

Theng, meanwhile, urges the police to set up a special task force made up of forensic and conveyance experts to look into the problem.
Commercial Crimes Investigation Department legal/inspectorate division principal assistant director ACP Tan Kok Liang at the 14th Malaysian Law Conference had suggested using fingerprinting during land and property transactions as it offered a unique security feature to prevent fraud and to identify impostors.
urges the government and relevant agencies to solve the problem as soon as possible.
“It will lead to serious loss of confidence in Malaysian property market and potential investors may well find it easier to invest in property elsewhere,” he said.
The Land and Mines Department was not available for comment.
By JOSEPH LOH and RASHVINJEET S. BEDI - the star 23rd Dec 207