IMPORTANCE OF THE LAND SEARCH AND DIFFERENCE BETWEEN PRIVATE SEARCH & OFFICIAL SEARCH
Updated: Mar 18
Before buying a property i.e house, vacant land or commercial property , the first thing to do is to conduct a land/title search to verify the particulars of the property.
You can either conduct the search personally or you can ask your lawyer to do the search for you at the relevant Land Office.
WHAT DOES A LAND SEARCH REPORT REVEAL?
1)The registered owner of the Property.
If the owner however registered as an executor, administrator or trustee, you can then make provisions in the Sale & Purchase Agreement to ensure that that he has the authority to enter into the transaction.
2)Restrictions in interest i.e. whether there are limitations endorsed on the title.
A property which is subject to restrictions in interest will be endorsed with words like the land cannot be transferred, leased or charged without the consent of the State Authority or Menteri Besar and such. If there is such a restriction in interest, the vendor must obtain the consent to transfer in favour of the buyer.
3)The status of the title i.e. whether it is freehold or leasehold.
A freehold title is a title in perpetuity whereas a leasehold title is for a specific tenure (eg 99 years).
It is prudent to ascertain the expiry date of the leasehold term, particularly if you intend to obtain a loan as banks are reluctant to finance properties that have a short lease of, say, 40 years or less.
4)Encumbrances on the property
Whether the property is charged to any financial instituition, caveat, lien and other liablilities.
5)Other information such as area of the land, conditions affecting the use of the property, whether anyone has taken a lease of part of the property or, whether anyone a registered right of way across the property.
Where a separate/individual title has not been issued on the Property, a search will be conducted on the Master Title. However this search will only show the Developer and/or the Proprietor’s name. To ascertain the owner of the Property, one has to ask a lawyer to write to the developer to obtain the information on the specific unit/lot that they would like to purchase.
In conclusion, if you are uncertain what the land search reveals, you should consult a lawyer for an advice before you commit to purchase a property.
IS THERE ANY DIFFERENCE ON THE RESULT OF THE SEARCHES BETWEEN PRIVATE SEARCHES AND OFFICIAL SEARCHES?
Pendaftar Hakmilik, Pejabat Pendaftaran Wilayah Persekutuan Kuala Lumpur dan Kerajaan Malaysia
Poh Yang Hong [Civil Appeal No.01(f)-59-12/2015(W)], Federal Court
It was an appeal by the appellants (Pendaftar Hakmilik, Pejabat Pendaftaran Wilayah Persekutuan Kuala Lumpur dan Kerajaan Malaysia) against the decision of the Court of Appeal in affirming the decision of the High Court in allowing the respondent’s (Poh Yang Hong) claim against the appellants for damages premised on the tort of negligence on the part of the first appellant.
Brief Facts :-
In 2008, Mohamad Nor Mohamad was driving around Jalan Duta in Kuala Lumpur when he saw some people on his plot of land. He got out of the car and inquired.
One was the "owner/purchaser of the land" (Poh Yang Hong) and the other was an architect who was in the process of determining the extent of development that could be carried out.
Mohamad Nor said that he was the legal and registered owner of the land and asked the trespassers to leave immediately.
Unknown to him, someone had obtained a "title" to the same land and sold it for a princely sum of RM4.5 million.
The purchaser, Poh Yang Hong, said he had bought the land and offered to produce his title to the land. But Mohamad Nor too had a clean title – he had owned that plot for more than two decades.
Background Facts Presented in Court
The plaintiff (Poh Yang Hong) entered into a sale and purchase agreement with one Ng Lai Yin, the first defendant to purchase the property held under the description GRN 232, Lot 349, Seksyen 71, Bandar Kuala Lumpur, Daerah Kuala Lumpur, Negeri Wilayah Persekutuan Kuala Lumpur [“the Property”]. The purchase price for the Property was RM4,451,160.00. The plaintiff’s solicitors conducted a private search at the second defendant’s office on 18 September 2007 which showed that the first defendant was the registered proprietor of the Property. The plaintiff paid RM89,023.20 to the first defendant’s solicitors as earnest deposit and subsequently entered into a sale and purchase agreement on 8 October 2007 to purchase the Property. The plaintiff then made the balance payments.
The memorandum of transfer and other documents to effect the transfer and charge of the Property was presented to the second defendant’s office for registration on 11 February 2008. Whilst registration was pending, the plaintiff came to find out that the Property was in fact held under the description of PN 20992, Lot 349, Bandar Kuala Lumpur and was registered to a person named Mohamad Nor bin Mohamad.
The plaintiff’s solicitors again conducted searches of the land title to the Property at the second defendant’s office on 4 June 2008 and the results showed that the land held under title GRN 232, Lot 349, Seksyen 71, Bandar Kuala Lumpur, Daerah Kuala Lumpur, Negeri Wilayah Persekutuan Kuala Lumpur was registered inthe name of the first defendant. However, it was also discovered that the same land, but held under different title number PN 20992, Lot 349, Bandar Kuala Lumpur was registered under the name of one Mohamad Nor binMohamad.
The plaintiff alleged that the second defendant breached their duty of care to the plaintiff bymisrepresenting the true and actual particulars of the Property. Further, the plaintiff alleged that the second defendant failed to maintain true and accurate records. The plaintiff relied on the information provided by the second defendant and as a result, suffered losses. On that premise, the plaintiff claimed damages in tort of negligence with interest thereon and costs against the second and third defendants.
The second and third defendants denied the whole of the plaintiff’s claim and put the plaintiff to strict proof. The second and third defendants maintained that there was no duty of care owed to the plaintiff and that the information was accurate according to the second defendant’s records at the time it was provided for. The second and third defendants also asserted that the plaintiff was not entitled to the reliefs sought.
The Question for Determination of This Court
Is the difference between sections 384 and 385 of the National Land Code of any relevance?
It was submitted for the second and third defendants that section 384 of the NLC refers to a private search conducted by a person upon the payment of a prescribed fee. The information provided by the second defendant in a private search contains information which is gleaned from the second defendant’s land database system. This information is merely an extract and is not accompanied by a certificate of search issued under the hand and seal of the second defendant.
Section 385 of the NLC on the other hand, refers to an “Official Search” conducted by a person upon payment of a prescribed fee. The second defendant provides a certificate of search under his hand and seal giving particulars relating to the property in question.
Findings of the High Court
The learned High Court Judge stated that there is no difference between a “Private Search” and an “Official Search” in so far as the second and third defendants’ duty of care to a paying member of the public is concerned because the object of a search, be it “Private Search” or “Official Search”, is the same.
Findings of the Court of Appeal
“The apparent difference between sections 384 and 385 of the National Land Code are of little relevance particularly since the cause of action is not the accuracy of what is printed on the ‘Çarian Persendirian’ and the ‘Carian Rasmi’ but the failure to ensure that the particulars in the register of title are accurate and that it could not possibly be held to be even arguably correct when for the same piece of title there are two sets of record, each with a different person registered as the registered proprietor.”
Decision of Federal Court
“We are of the view that there can be no difference as between a “Private Search” and an “Official Search”, as provided for under the NLC, in so far as it relates to the issue of liability arising from a common law claim of damages for the negligent act of the second defendant in its maintenance of the records of Register of Titles. It is also noted that there is nothing in either section 384 or section 385 of NLC which excludes the liability of the second defendant from a common law claim of the tort of negligence.”
“We find no merit in this appeal. The appeal is therefore dismissed with costs.”
*Some of the contents in this Article are originally cited from @the Star Online (by Susan Joseph).