By Salleh Buang
When the National Land Code,
1965 was amended recently, many thought it was merely to effect a shift in
policy announced earlier by the Prime Minister.
What the PM had in mind was to make things easier for foreigners to buy
landed properties; to make it attractive for them to stay longer; and to
increase their investments.
When the full text of the amendment exercise was made known, people
realised that it covered a wide range of matters - not just foreign
acquisitions, but also new provisions for the issuance of final titles,
the Estate Land Board, partition, amalgamation of land and sub-divisions,
and public auctions.
The focus of this article is on the procedures affecting public auctions
at both the High Court and the Land Office, with a view to determining how
far these procedures have changed.
Section 257, which deals with foreclosure proceedings affecting Registry
titles in the High Court, has been amended.
Under the amendment, a bidder at the public auction must satisfy “the
officer of the Court” that he has, at the time of the sale, money
equivalent to 10 per cent of the reserve price.
If this bidder then succeeds at the public auction, he must complete the
purchase “not later than 120 days” from the date of the sale. The
amendment states very clearly that “no extension” shall be given. If the
bidder fails to complete the purchase, his deposit “shall be forfeited”
and disposed off in the manner specified under the new section 267A of the
Section 259, which deals with the “procedure at sale” affecting Registry
titles, has also been amended. Under the amendment, the chargee is
required to certify in writing that the full purchase price has been
received by him. Only when that has been done will the purchaser be able
to obtain from the court, a certificate of sale. The certificates, which
will be in Form 16F, will be registrable by the purchaser as if they “were
an instrument of dealing”.
Section 262, which deals with an enquiry before the Land Administrator
when foreclosure proceedings are taken in respect of Land Office titles,
has also been amended.
Under the existing law, only chargors and chargees themselves are
“entitled to be heard, or to adduce evidence, at any enquiry under section
Accordingly, under the existing law, they are the only people “entitled to
apply for a postponement or change of venue ... or to receive notice ...
of any cancellation, postponement or change of venue”.
Under the amendment, they both can now appoint an authorised person or
body to act on their behalf.
Section 263, which deals with foreclosure proceedings affecting Land
Office titles in the Land Office, has also been amended. The amendments
here reflect those carried out to section 257 mentioned earlier.
In a sense, sections 257 and 263 set out “parallel procedures” for the
purpose of achieving the same purpose - the former affecting Registry
titles and the latter affecting Land Office titles.
The recent amendments also inserted a new provision to the Code - section
264A. Under this new provision, the chargee with the concurrence of the
chargor, can apply for a postponement not exceeding three months or
cancellation of an order for sale by the Land Administrator. The Land
Administrator has discretion to approve or reject the application.
Section 265, which deals with the public auction of Land Office titles,
has also been amended. Under the amendment, the Land Administrator can now
do a number of things if a second public auction is still unsuccessful.
He can try a third auction, either at the same reserve price or at a new
reserve price. He can also withdraw it from the sale and refer the matter
to the High Court.
A new paragraph (4A) is also inserted in section 265, requiring the
chargee (after receiving the full purchase price from the bidder at the
auction) to certify in writing this fact. Only upon that being done will
the purchaser be entitled to get his certificate of sale from the Land
An entirely new provision, section 266A, has also been introduced. Under
this new section, the chargee is now required to prepare a statement of
all payments due to the State Authority and the local authority and
expenses incurred in connection with the sale by public auction.
Under another new provision (section 267A), it is now provided that
where the purchaser fails to pay the balance of the purchase price within
the stipulated date, his deposit shall be forfeited.
Section 268A now describes in detail the manner in which the purchase
money shall be applied by the chargee. It also requires the chargee to
submit statements of accounts of the payments received and paid out to the
Registrar of the Court or to the Land Administrator, as the case may be.
Finally, section 301 has also been amended. Under the new provision, where
the land sold at a public auction is subject to restrictions in interest,
the consent of the State Authority is not necessary to give effect to any
certificate of sale issued to the purchaser. This means that if the
property cannot be sold successfully at a public auction, but is instead
sold through private treaty, consent is still required if the land is
subject to such restrictions in interest.