Norsyaza Adani binti Norzaiham Nazley
The National Land Code 1965 governs Malaysia’s system of land ownership, adopting
the Torrens system of land registration. This system provides clarity and security by guaranteeing ownership based on what is recorded in the land register. The fundamental principle underlying this system is that the person whose name is recorded in the land register is recognized as the legal owner of the land. While this system is designed to ensure certainty in land ownership by relying entirely on the accuracy of the land register, it contains weaknesses that lead to significant legal issues and risks within Malaysia’s title registration framework. The aim of this article is to highlight the legal challenges associated with Malaysia’s land title registration system.
The Torrens system built upon the concept of indefeasibility of title, in which it protects
registered landowners from having their ownership challenged. The problem arises when fraud
or forgery occurs in the registration process. Fraudsters could easily obtain the Land of proprietors by forging signatures, impersonating the true owner, creating fake identification documents, and registering the property in their name. In the case of Adorna Properties Sdn Bhd v Boonsom Booyanit [2001] 1 MLJ 241, the true owner lost her land in Penang after a fraudster forged her signature and transferred the land to a company. The court ruled in favour of the company stating that the purchaser’s ownership remained valid even though it was acquired through forgery. This ruling implied that genuine landowners could lose their property because of fraudulent registration. Although later the case of Tan Yin Hong v Tan Siew San [2010] 2 MLJ 1 overturned this ruling confirming that titles obtained through forgery are not indefeasible, this issue continues to pose significant challenges in conveyancing practices[1]. The real landowner might find it difficult to recover their property that has been fraudulently registered because the Torrens system protects the person whose name appears on the register.
Another significant risk arises is the unregistered property transactions. As the Torrens system only recognised the land ownership once the transaction is officially registered in the Land Office, any buyers that have signed the Sale and Purchase agreement (SPA) and have made full payment of the land would not have full possession of the land legally unless they have officially registered in the Land Office[2]. If someone else comes and registers their name first, the law will recognise them as the legal owner. This risk is worsened by the time lag between contract signing and registration as many purchasers mistakenly assume that paying and signing the SPA is enough to secure ownership of the land. To deal with this, buyers are encouraged to deal with a competent conveyancing lawyer to ensure prompt registration. Failure to complete registration promptly would result in losing both property and money paid if another person successfully registered the title first. Under Malaysia’s title registration system, possession or payment alone does not equal ownership without registration.
Apart from that, most land disputes in Malaysia happen due to lack of verification and public awareness among property buyers and landowners. Many first-time buyers are not aware
of the legal procedure and verification steps that are needed before making a purchase exposing them to fraud and forgery. In recent years, there have been nearly 500 land swindle cases recorded, and the investigations revealed that most victims had failed to confirm the authenticity of the documents that they signed and did not verify ownership in the land office[3]. To address this issue, it is essential for legal professionals to raise awareness, for individuals to rely on verified agents, and to consult licensed conveyancing lawyers before conducting any transactions.
In conclusion, although Malaysia’s land title registration framework under the Torrens
system was created to ensure certainty and security of land ownership, various legal loopholes
undermine its effectiveness. This framework offers strong legal protection to registered owners,
but problems such land fraud, forged transfers and poor public awareness weaken the system’s
effectiveness. Thus, cooperation between government, legal practitioners and the public is
crucial to make this system function as intended.
Bibliography
Khor, J. J. C. (2023, January 9). How the enactment of Torrens system imparted inconsistencies and haunted landowners. Chambers & Partners. https://www.chambers.com/articles/how-the-enactment-of-torrens-system-imparted-inconsistencies-and-haunted-landowners
CY Wong Ng & Partners. (2025, March 31). Who legally owns the land? Understanding land registration in Malaysia. https://www.cywongngpartners.com.my/updates/who-legally-owns-the-land-understanding-land-registration-in-malaysia/
Zolkepli, F. (2024, May 29). RM300 mil lost to land fraud. The Star. https://www.thestar.com.my/news/nation/2024/05/29/rm300mil-lost-to-land-fraud
[1] Khor, J. J. C. (2023, January 9). How the enactment of Torrens system imparted inconsistencies and haunted landowners. Chambers & Partners. https://www.chambers.com/articles/how-the-enactment-of-torrens-system-imparted-inconsistencies-and-haunted-landowners
[2] CY Wong Ng & Partners. (2025, March 31). Who legally owns the land? Understanding land registration in Malaysia. https://www.cywongngpartners.com.my/updates/who-legally-owns-the-land-understanding-land-registration-in-malaysia/
[3] Zolkepli, F. (2024, May 29). RM300 mil lost to land fraud. The Star. https://www.thestar.com.my/news/nation/2024/05/29/rm300mil-lost-to-land-fraud