By The Borneo Post onSabah
KOTA KINABALU (April 17): The State Assembly today passed the amendment to the Land Ordinance (Chapter 68) by inserting two new provisions.
The first new provision concerns the voluntary surrender of part of a titled land by the owner to the Government of Sabah, while the second new provision concerns the indefeasibility of title.
Nizam
Assistant Minister to the Chief Minister, Datuk Nizam Titingan when presenting the Bill, said that currently, there is no law that provides for the voluntary surrender of part of a land by the owner to the Government.
“This makes it difficult for landowners who wish to surrender part of their titled land to the Government,” he said.
He added that typically, such surrenders include: (a) The surrender of part of the land by the Federal Land Commissioner to the Government of Sabah; (b) The surrender of part of the land by Government-Linked Companies (GLCs) for the purpose of village conservation, or other public uses; (c) The surrender of part of the land located on river or sea banks which can no longer be developed due to flooding or erosion; and (d)The voluntary surrender of part of the land by the owner.
“Thus, a clear legal provision is needed to allow the Government to accept voluntary land surrenders. With this provision in place, landowners can surrender part of their land, and the Government can accept the surrender without any compensation being paid,” he said.
Nizam further elaborated that the land law in Sabah is based on the Torrens System, which prioritises the registration of land transactions, including transfers of ownership, leases, and rentals.
“But, unlike the National Land Code and the Sarawak Land Code, the Sabah Land Ordinance does not contain a provision regarding the indefeasibility of title. Without this provision, land ownership acquired through transfers and properly registered can still be challenged and is not guaranteed,” he said.
He added that as highlighted in the Federal Court ruling in the case of Sia Hiong Tee and Chong Su Kong, there is a gap in Section 88 of the existing Land Ordinance when compared to Section 340 of the National Land Code, which clearly defines the concept of indefeasibility of title.
“Through this provision, once a subsequent purchaser, in good faith and for valuable consideration, acquires title to land from the original owner, that title cannot be disputed or invalidated, even if the original owner obtained the title fraudulently, provided that the subsequent purchaser was unaware of the fraud,” he said.
Nizam said that this amendment will bring other benefits, including enhancing investor confidence in the land registration system in Sabah, ensuring that their investments are protected.
“Without this amendment, land ownership purchased by bona fide purchasers could still be challenged, even if the title has been transferred multiple times over a long period, because the concept of deferred indefeasibility is not recognised under the Land Ordinance,” he stressed.
Nizam further mentioned that the amendment will also protect financial institutions that provide loans, as the land pledged as collateral for loans will be safer, and it will protect solicitors who provide legal advice to financial institutions, ensuring that the land being pledged is legally sound and secure.
Moreover, this amendment will protect the Government from potential legal liabilities arising from a bona fide purchaser losing their land after relying on the current land registration system, he said.
“Therefore, the provision concerning the indefeasibility of title must be incorporated into the Land Ordinance to safeguard the integrity of ownership for bona fide purchasers, as well as to enhance investor confidence, both from within and outside Sabah, in the land registration system in Sabah,” he said.
The Land (Amendment) Bill 2025 contains the following provisions: Clause 1 provides the short title and commencement date of the Enactment, which will come into force on the date the Enactment is gazetted;
Clause 2 aims to insert Section 38A into the Land Ordinance.
Subsections 38A(1) and 38A(2) provide that the landowner may apply to voluntarily surrender part of their land, subject to the approval of the Assistant Collector of Land Revenue for title deeds (NT) and the approval of the Director of Lands and Surveys for leasehold titles.
The surrendered portion of the land will then become vested in the Government free from any encumbrances;
and Clause 3 aims to insert Section 88A into the Land Ordinance.
Subsection 88A(1) generally states that a registered landowner will acquire an indefeasible interest in the land;
Subsection 88A(2) specifies conditions under which title can be disputed, i.e., if the title was obtained through fraud, forgery, or unlawful means;
Subsection 88A(3) further provides that a subsequent owner who acquires title that can be disputed under subsection 88A(2) will also have a title that can be challenged. However, if the subsequent owner acted in good faith and provided valuable consideration for the land, the proviso in subsection 88A(3) protects that subsequent owner, making the title indefeasible;
Finally, subsection 88A(4) clarifies that Section 88A does not prevent the exercise of powers for forfeiture or sale under the Ordinance or any other written law or the determination of title or interest through the enforcement of the law or customary rights of the indigenous people.
