Law Speak - Different laws cover land use

A PROPERTY owner wishes to put up a house on his land. What are the matters he must take into account?
First, he must ascertain the category of use endorsed on the title of the land. If the use is for "building" then he can construct a house for residential purposes. If it is "agriculture" he must use the land for bona fide (in good faith) agricultural cultivation only, which must commence within 12 months of the date when the title is endorsed with this category of use. For such agriculture land, he may put up a house either for himself or his employees to live in. The house must occupy no more than one-fifth of the area of his land or 2ha, whichever is the lesser. Other buildings are allowed provided they are ancillary to the agricultural purpose. All these are implied conditions under the National Land Code.
This may not be enough. The landowner must also comply with any express conditions that are stated in the title of the land. For agriculture, the authority is entitled to impose such conditions as the kind of crop or trees to grow and the dates when specific work of agriculture must be carried out – such as clearing, cultivation, sowing, manuring, harvesting or any such agricultural activity.
For "building" category use the express condition may include the proportion of the land to be built upon, the height (and such like) and design of the building, the date for completion and the use to which the building is put. Any violation of the implied or express conditions is illegal under the law; and the land may be forfeited if the breach is not remedied.
In addition, the landowner must also get the permission of the relevant local authority for putting up the building. Then again, if the category of land use is "building", he will need to get the approval of the appropriate authority and get a licence to operate any business on the premises. Failure to comply constitutes an offence which can be punished by a fine and/or jail; and the land may be ordered to be restored to its original condition.
You can see that the owner may have to comply with more than one law. This has always been the case.
A recent decision of the High Court reinforces this position in law and its dire consequences. A company which had put up billboards in Petaling Jaya sued theSun newspaper for defaming it in three articles. These articles described the billboards as illegal; and called on advertisers not to advertise on the illegal structures as the company was carrying on an illegal business.
It was proven during the trial that the company was required to, but failed, to comply with three sets of laws, namely: the Local Government Act 1976, The Street, Drainage and Building Act 1974 (SDBA) and National Land Code 1966 (NLC).
The judge held that the requirement for approvals under the NLC, the SDBA and LGA are independent of each other and address different concerns. "Non compliance with any of the acts and the subsidiary legislations, thereunder, makes the billboards illegal," she said.
Hence the articles written were not defamatory but justified and fair comment. The company's suit for RM13 million was dismissed; and it was ordered to pay RM60,000 in costs to theSun.
One other consequence is that if you let out land in violation of the condition of use imposed on it, then the contract is bad in law. The landowner cannot then get any advantage under the contract. So it will be clearly illegal for a landlord to rent his land, designated for agriculture purposes, for an industrial use such as building a factory. He not only will not be able to recover any rentals paid but may have to pay damages for any loss caused to the tenant – such as building on the land, or renovating any structure on the land. Further, he may have to repay any rentals and any other payments received.
This was indeed the outcome of a recent 2015 case where a landlord was held liable by the Court of Appeal for allowing his land in Subang Jaya to be used for a factory – which is an industrial purpose – when it was designated for agricultural use only (Kang Eng Chew [Kly Furniture] v Guzzi Sdn Bhd).
It matters not whether or not either party was aware of the illegality. In this case the landlord was ordered to repay the thousands of ringgit of rentals and the utility deposits.
This in fact is trite law as shown by the fact that the Court of Appeal cited in support a 1980 decision of the Federal Court where the court ruled as illegal the letting of agricultural land for industrial factory use (Singma Sawmill Co Sdn Bhd v Asian Holdings [Industrialised Buildings] Sdn Bhd).
The Federal Court stated as follows:
"The applicants have let the land together with a factory building on it to the respondents solely for the purposes of operating a factory. For this purpose the respondents have erected machinery on the land. It is clear that the land is being let out in breach of the conditions under Section 120 of the National Land Code. In my opinion, the use of the land is therefore unlawful and the letting out of the land for the unlawful purpose would be illegal."
Yet, despite this focused and crystal clear ruling, it is surprising that landowners and/or their legal advisers continue to draw up agreements without keeping in mind these decisions.
Indeed it may not be far-fetched to suggest that a lawyer who draws up such an illegal contract without first carrying out the proper searches to establish the legal status of the land use, may be successfully sued for negligence.
Gurdial is professor at the Law Faculty, University of Malaya. Comments: letters@thesundaily.com