First and foremost, you must know that I am not a lawyer by profession. However, having being involved in the real estate industry for some time, I found myself asked this question so very often, “Can the government take my land?”. With the recent announcement of the MRT3 line and how the alignment is going to run through the KL City Centre, I found myself digging deeper to understand more.
As a general rule, the government can acquire your land for compensation as long as it is for the public interest or for a purpose beneficial to the local economy. This is known as the compulsory acquisition of land and is a drastic form of government intervention that affects the rights of landowners.
To put it simply, for the government to fully take over your land, there are conditions, and processes to go about. It will take some time and you as the landowner do have some right in arguing the matter.
1. What are the conditions for the government to acquire my land?
Although the land is yours and the land title states you as the rightful owner, you must know that the government can acquire your land under certain circumstances. The purpose of the land acquisition must fall under the below categories, laid out in Section 3(1) Land Acquisition Act (LAA),
- For any public purpose
- For any economic development that is beneficial to the public of Malaysia
- For purpose of mining, residential, agricultural, commercial, industrial or recreational purposes
Seeing that the term “public purpose” was not defined in the Land Acquisition Act, we can only refer to past precedence to understand what it entails,
“The expression pubic purpose is incapable of a precise definition. It is still best to employ a simple common sense test, that is, to see whether the purpose serves the general interest of the community”
S.Kulasingam & Anor v Commissioner of Lands, Federal Territory & Ors [1982] 1 MLJ 204
2. Who will be compensated in this land acquisition by the government?
The landowners with names on the registered land title will be compensated in compulsory land acquisition by the government. This does not include the tenants who are residing on the land on a monthly tenancy basis.
According to the LAA, the persons interested will be notified through a number of steps and be compensated accordingly. In this case, referring to Section 2 of the LAA, persons interested refer to every person claiming an interest in compensation to be made on the account of the acquisition of land under this act, excluding the tenants at will. In other words, it is us, the landowners, who have our names registered on the land title. If your name is not on the title, you are not persons interested.
3. How will I know if my land is in the process of being acquired?
As there are many steps to compulsory land acquisition, there are a few steps mandated by the government to ensure we, as the landowners are well aware of the government’s intention of acquiring our lands for public purposes.
Notice 1: Notification to the public about intention for land acquisition
The very first step in compulsory land acquisition is the notification of intention to the public. The government, in most cases the state authority must publish their decision in the Government Gazette via Form A, or Form D, depending on the purpose. This will serve as an official notification that the land is likely to be acquired.
Public notice of this decision can also be found at either the District Land Office, on public notice boards on the land, or near the land, and in other places deemed suitable. These are provided for under Section 8 of the LAA and the public notices are to ensure the public, the landowner, and tenants are well informed and notified of the pending acquisition.
With so many notices, it is highly unlikely you will miss such big news in your residential compound.
Notice 2: Notice of enquiry to persons interested
After the public notification is done, the government will proceed with the land survey and preparation of the plan. At this point, the list of land to be acquired will be finalised and the landowners will be served with a copy of Form E. This Form E is to inform us, the landowners that the government intends to acquire our land and we are required to attend an Enquiry at the Land Office.
From what I was advised by my lawyer friends, this is the point in the whole process to start seeking the assistance of a lawyer and valuer who are experienced in dealing with this matter. This is important because you will want to be advised on the necessary procedures and how to claim the best possible compensation, from the beginning of the enquiry.
As a general rule, landowners are to seek proper assistance from a lawyer and valuer upon being served with Form E by the land office. Having their involvement will help minimise your loss as the landowner and to be completely prepared for the acquisition process.
Landowners will have at least 21-days to prepare for the Enquiry.
4. Can I object the compulsory land acquisition by the government?
Typically, it is not possible to object the compulsory land acquisition by the government, especially if the acquisition is made for public purposes and the benefit of the economy. However, if you can prove the acquisition is not done in accordance with the LAA, it is possible to object to this acquisition.
To put it simply, if the government acquires your land for the purpose of building an MRT station, ultimately benefitting the good of the surrounding residences, the government is acting in accordance with LAA and is given the right to do so. As landowners, the only chance to prevent the authorities from forcefully acquiring your land is to prove the below 2 instances,
- The land acquired is not being used for public purposes.
- The use of land is not done in good faith.
If you cannot prove the above 2 instances, the government has every right to acquire the land. You as the landowner will, unfortunately, be required to dispossess the land to the government.
5. What should I get compensated for when my land is acquired by the government?
The general rule of compensation for compulsory land acquisition is to be based on the market value of the acquired land. If a landowner is dispossessed from his home, the government will have to compensate the same amount to put him in the same position before the acquisition.
“compensation is the amount required to put the dispossessed landowner in the same position as if his property had not been acquired”
Rickets v Metropolitan Rail Co L.R. 2 H.L. 175
Precedence from an English case which has been applied by the Malaysia courts
Compensation consideration #1: Market value of land
In a very legal way of saying, the land’s market value is “the price that would be paid by a willing purchaser to a willing seller in circumstances where both parties are actuated by fair business principles and there is no disinclination on the part of the vendor to sell and the purchaser is not compelled by any urgent necessity to buy”
This takes into account the following,
- Location of land, size and condition
- The utilization of the land
- Development potential of the land
- Market conditions at the material date of valuation
All these are taken into account at the time when the declaration was made by the government. To put simply, if a declaration was made by the government in 2010, via Form D, but in a very rare case, the enquiry notice, Form E was only served in 2020, the valuation of the land is based on the market condition back in 2010 when Form D was served.
Compensation consideration #2: Additional expenses due to being forcibly evicted
Besides the market value compensation, there is also a clause in LAA that covers removal expenses. The Paragraph 2(e) First Schedule of LAA 1960 states that “if, in consequence of the acquisition, he is or will be compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change”.
In other words, if a landowner is forced to move residence/business as a consequence of the compulsory land acquisition, he is entitled to be compensated for his removal expenses.
6. How do I get compensated by the government?
After the land office enquiry is concluded, a written award in Form G will be prepared by the Land Administrator as per Section 14 LAA. This written award will express the compensation to each persons interested in the land. The award once filed in the office of the Land Administrator will conclude the administrative stages of the land acquisition.
7. What do I do if I am dissatisfied with the compensation?
Landowners who are dissatisfied with the award by the Land Administrator can write in their application through Form N. There is a limited time of 6 weeks to write in this application upon receiving Form G, which is served to landowners after the land office enquiry.
At this point, again, it is best to consult good legal advice because the application, Form N, needs to be comprehensively filled. It is best to avoid any mistakes from the beginning.
Final Word
Compulsory land acquisition is considered a drastic measure by the government as it results in the dispossession and eviction of landowners from their properties. It is uncommon but it does happen especially when there is a need to make room for developments that benefit the Malaysian economy.
With this article, I hope I was able to help you understand what will happen in the event such a situation is to happen and what can be done to minimize your loss as a landowner.
Until then, take care.
