MALAYSIA Law and Practice Contributed by: Natalie Ooi and Nicholas Ooi, Ooi & Ooi
1. General 1.1 Main Sources of Law
buildings or structures developed on the land, which can be either landed properties or strata properties, and “real estate” refers to either land or property. Strata properties possess their own unique legislative framework and are governed by the Strata Titles Act 1985 (STA). The STA applies to buildings that are intended for subdivision (eg, apartment blocks, commercial malls and gated communities) and governs and facilitates the subdivision or stratification of buildings or land into individual parcels. In turn, the maintenance and management of strata buildings and com - mon property is regulated by the Strata Manage - ment Act 2003 (SMA). Unless otherwise stated, all references to laws, regulations and statutory reforms in this Guide pertain exclusively to Peninsular Malaysia, and do not apply to Sabah and Sarawak, which oper - ate under separate legal frameworks for land and housing matters. 1.2 Main Market Trends and Deals Malaysia’s property transaction volume and value in 2024 reached the highest levels in a decade, according to the National Property Information Centre, with volume rising 5.4% year-on-year, to 420,525 transactions. The total transaction value surged 18% to MYR232.3 bil - lion compared to 2023. Growth is seen across multiple sectors, driven by the domestic economy and increasing foreign investments. The rising demand for data centres is a major growth driver. Johor’s real estate mar - ket is gaining traction due to the near completion of the Rapid Transit System (RTS) linking Johor Bahru with Singapore and the development of the Johor-Singapore Special Economic Zone (JS-SEZ).
The Federal Constitution (FC) is the supreme law of Malaysia and prevails over all regular statutes. It provides that land matters generally lie within the jurisdiction of the state authority of each state in Malaysia. Each state in turn has enacted its own subsidiary legislation pertaining to land, such as various land rules, enactments and ordi - nances to supplement the operation of the FC. Land matters relating to the three federal ter - ritories of Kuala Lumpur, Putrajaya and Labuan fall under the purview of the federal government, which has the power to enact laws to achieve uniformity between the States. In Malaysia, there are four main sources of stat - utes governing real estate. • For Peninsular Malaysia, the two principal statutes are the National Land Code 1965 (Revised 2020) (NLC) and the National Land Code (Penang & Malacca Titles) 1963, which apply to all land matters in Peninsular Malay - sia (including the Federal Territories of Kuala Lumpur, Putrajaya and Labuan). • The state of Sarawak administers its land laws separately under the Sarawak Land Code (Cap 81). • In a similar manner, the state of Sabah has enacted the Sabah Land Ordinance (Cap 68) to govern its land laws. Malaysia practises the Torrens system of land registration or derivatives thereof for Sabah and Sarawak; see 2.3 Effecting Lawful and Proper Transfer of Title for more information. In this Guide, reference to “land” refers to the physical land itself, while “property” refers to
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