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Land Acquisition proceedings from a practical perspective

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Written by Eng Kar Wei. He writes from his perspective as an advocate & solicitor and the son of a landowner whose land was previously compulsorily acquired.

He is a partner in the dispute resolution department at TCC Law. Land acquisition law is one of his sub-specialties.

INTRODUCTION

1. In Malaysia, lands can be compulsorily acquired by state authorities provided that they are to be used for ‘public purpose’.

 

2. Land acquisition is a nightmare to most if not all the landowners butall is not lost because Article 13 of the Federal Constitution guarantees adequate compensation to all landowners.

 

3. The 2 main stages for the landowners to seek adequate compensation are:
(a) Inquiry before the and dministrator; and
(b) ‘Reference Proceeding’ in the High Court for additional compensation.

 

4. This article seeks to offer practical tips and pitfalls to avoid in a land acquisition exercise.

Claim all losses

5. It is obvious that landowners must be compensated for the land acquired based on ‘market value’.

6. Over and above this, landowners are also entitled to claim for, inter alia, the following common losses:
(a) damage due to ‘severance’;
(b) damage due to ‘injurious affection’;
(c) reasonable expenses incurred to change his residence or place of business; and
(d) loss of business.

7. Damage due to ‘severance’ and ‘injurious affection’ in colloquial terms are ‘injury to the remaining land (unacquired land)’ due to the land acquisition exercise. Put simply, if the remaining land has suffered from a reduction in value, landowners must also be compensated for such loss.

8. ‘Injury to the remaining land’ can occur in various forms. Examples of them are ‘loss of road access’, ‘loss of frontage to main road’, ‘irregular shape causing the remaining land difficult to be developed or utilised’, etc.
 
9. All the possible losses must be properly considered and put forward to the court failing which the landowners will be deprived of such compensation.

Do not inflate claims to an unreasonable extent

10. Landowners often have sentimental value toward their own land. This is understandable considering the booming increase in land prices throughout the years.

 

11. Some landowners may even resort to inflating claims of losses in the hope of getting maximum compensation.

 

12. This is not a good idea. Landowners must bear in mind that in a land reference proceeding, the court is assisted by 2 assessors who are valuers themselves. Further, the Land Administrator will also be represented by his own valuer from the Valuation and Property Services Department.

 

13. In the event the landowner’s valuation report submitted to the court is found to be unjustified and unreasonable, such a report will likely be given zero weight.

 

14. In fact, Justice Lee Swee Seng quoted Professor Gerald R Brown (a Professor of Property Development and Management at the University of Salford), in of his lordship’s cases, who wrote the following:

 

As an art form, valuation had adopted the status of a mystical skill. Closely guarded secrets were passed down from one generation of valuers to another, with the reason for adopting certain practices being explained by years of accumulated wisdom. .

 

Over the last decade, however, property valuation has begun to embrace the ideas that have dominated finance for the last four decades. We now live in a brave new world that is ruled by the need for information and statistics. Valuers have to justify their decisions in quantitative terms and can no longer rely on the art versus science argument. Property is part of the capital markets.

 

15. What can be summarised from the passage above is – valuation is no longer a ‘mystical skill’, valuer must now be able to justify their professional opinion. This is even more so in the land reference proceeding.

Do not inflate claims to an unreasonable extent

16. As stated above, there are various forms of losses of which a landowner can claim during the land acquisition exercise.

 

17. Submitting documentary evidence (if any) in support of the losses claimed will certainly strengthen the landowner’s claims.

 

18. For instance, if a property developer (whose land is acquired) is claiming for loss of expenses incurred previously to obtain planning approval for the land, the invoices and receipts of these expenses, if submitted, will likely justify the property developer’s claim.

 

CONCLUSION

19. Landowner’s right to obtain adequate compensation is guaranteed by the Federal Constitution.

 

20. Whilst landowners may have to go through a lengthy and tedious process, a positive outcome is certainly achievable with the right representations.

Disclaimer: The contents of this article are for general information purposes only, and should not be construed as legal advice or legal opinion on any specific facts or circumstances. Formal legal advice should be sought in particular matters.

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