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Restraint on Dealings

Dr. Nuarrual Hilal Haji Md. Dahlan College of Law, Government and International Studies Universiti Utara Malaysia

Dealings
Transfer Charge Lien Easement Lease

Example
Bakar owns a land in Sintok. The land is worth RM 10,000.00 Bakar sells his land to Umar at the price of RM 15,000.00. Here, Bakar transfers his land to Umar. Now, the new proprietor/owner to the land is Umar. This is a type of dealing under the NLC.

Example

Bakar owns a land in Sintok. The land is worth RM 10,000.00 Bakar leases his land to Umar for a duration of 5 years. The lease is effected via a lease agreement. Bakar Lessor, Umar Lessee. Umar has to pay monthly lease payment to Bakar at RM 500.00 per month for 5 years. The lease is a type of dealing under NLC.

Restraint on Dealings

By the word, we can understand that the dealings (transfer, charge, lease, easement) effected by the parties are restrained.

Types of Restraint on Dealings


Caveat Court orders lis penden, injunction, prohibitory orders Purpose: to serve as a notice to the world at large about the existing claim that is being disputed and to discourage and restrain others from dealing with the land while preserving the status quo of the parties and their interests.

Example Private Caveat


Bakar owns a land in Sintok. The land is worth RM 10,000.00 Bakar sells his land to Umar at the price of RM 15,000.00. Bakar enters into an agreement of sale with Umar. Umar has to pay 10% deposit once the agreement is signed. 10% = RM 1,500.00. The balance of RM 13,500.00 has to be paid by Umar to Bakar in 3 months. To protect Umars interest during this 3 months, Umar created a private caveat against the land in question.

The purpose of this caveat is to protect Umars interest in the land (he has already paid RM 1,500 as deposit and intends to get the land). So, a caveat is registered in the land office. The Land administrator/land registrar will endorse the issue document of title that a private caveat, lodged by Umar has been created. Thus, Bakar cannot sell to other person during this 3 months period. Umar has a caveatable interests in the land. The application form of caveat is provided in the last part of the NLC. Find and see.

Caveat
A statutory injunction. Note the word statutory. Provisions in the NLC. Types of Caveat private caveat, registrar caveat, lien-holder caveat, trust caveat.

Registrars Caveat
Applied by interested parties to prevent fraud and any improper dealings in the land. To protect the interest of the Federal or State Authority, minors, persons of unsound mind and owner who is not in the country.

Example Registrars Caveat


Bakar (a minor) owns a land in Sintok. The land is worth RM 100,000.00 Osman is the trustee to Bakar land, created via a will by Bakars father Ali. Ali died 10 years ago. Osman is a greedy person. He wishes to sell Bakars land to Talha for RM 500,000. This money will go directly to Osmans hand, not Bakar. Osman tries to persuade Bakar to sell the land. However, Umar being Bakars uncle, knew Osmans bad intention. Umar applies a Registrars Caveat at the land office to protect Bakars interest in the land from being sold to Talha, by Osman.

Example Trust Caveat


Majlis Agama Islam Kedah (MAIK) owns a land in Sintok. The land is worth RM 10 million. This land is a wakaf land for the benefit of Muslims in Kedah. MAIK, is a trustee to the wakaf land (pursuant to the Kedah Administration of Islamic Law Enactment). MAIK can apply a trust caveat against the wakaf land in Jitra Land Office, if MAIK can prove that somebody may sell or deal with the land dishonestly.

Example Lien Holder Caveat

Bakar gives a loan RM 100,000 to Umar. In return Umar gives the issue document of title to Bakar as a lien. Umar has to repay the loan to Bakar in installment for 10 years. To protect Bakars interest, Bakar can create a lien-holder caveat against Umars land. So during the subsistence of the loan repayment, Umar cannot deal with the land (for eg sell the land to others).

Example Prohibitory Order


Bakar gives a loan RM 100,000 to Umar. Umar has to repay the loan to Bakar in installment for 10 years. However, Umar defaulted on the loan repayment. Bakar took a legal action against Umar and obtained a judgment. Bakar judgment creditor, Umar judgment debtor. To protect Bakars interest, Bakar can apply to the Court for a Prohibitory Order against some of Umars land. Bakar also can sell off Umars land which are subject to that Prohibitory Order to settle Umars oustanding loan still not repaid to Bakar.