In Malaysia, there are several types of property rights that govern the title and use of land. There are 5 types of title which are freehold, leasehold, strata, individual and master title.
Table of Contents
1. Freehold Title
Freehold Title is known as “Hakmilik” in Malaysia, representing the highest form of title. It gives the owner unlimited and permanent rights over the land and any structures built on it. This means that the land can be passed down from generation to generation forever, providing a sense of security and stability.
For example, if an individual owns property with a Freehold Title, they have the legal right to use, develop, lease or sell the land without any time constraints. They have complete autonomy over the property, which can be an invaluable asset for families looking to create a lasting legacy. Freehold Titles are the most popular in the property market due to their permanent nature and the absence of lease restrictions. They are usually associated with residential houses, commercial properties, and even agricultural land.
2. Leasehold Title
Leasehold, known as “Leasehold” in Malaysia, gives the holder the right to use and occupy a piece of land for a specified period, usually 30, 60, or 99 years, as determined by the state authorities. Although leaseholders have substantial rights during this period, they do not have ownership forever. Once the lease ends, ownership reverts to the state.
For example, if an individual buys a property with a 99-year Leasehold Title, they have the right to use, lease and develop the land for the duration of the lease. However, when the 99 years are up, the land reverts to the state, unless a lease renewal is negotiated. Leasehold Titles are common in urban areas and are often used for properties such as apartments, condominiums and certain landed properties. It is important for lessees to know the remaining term of the lease, as properties with shorter leases may depreciate in value.
3. Strata Title
Strata Title, referred to as “Strata Title” in Malaysia, is a type of real estate title used for multi-unit developments such as condominiums, apartments or townhouses. It provides individual ownership of specific units in a development, along with shared areas and amenities. This enables collective management and maintenance of shared spaces such as corridors, lifts, swimming pools and gardens.
For example, if someone owns a unit in a condominium complex with Strata Title, they have legal rights to their specific unit and also participate in decisions regarding the maintenance and improvement of the common areas. This system promotes a sense of community and ensures that the property is maintained to a high standard. Strata ownership is essential to high-density urban living, where multiple units coexist within a single building or development. They provide a clear framework for ownership and management in shared spaces.
4. Individual Title
Individual Titles, known as “Individual Titles” in Malaysia, represent distinct property titles for individual plots of land or complete units in a development. This title gives exclusive ownership rights to individuals over a certain piece of land or property. For example, if someone owns a bungalow or a terraced house with Individual Title, they have full control and authority over that particular property, including the land it sits on.
In addition, the landlord is free to make modifications to his house as long as the land is compounded. This includes the right to sell, lease, develop or pass it on to heirs. Individual Ownership is common for terrace houses, bungalows, or any self-contained property that does not share common ownership or common areas with other units.
5. Master Title
Master Title, known as “Master Title” in Malaysia, denotes the ownership of the entire development or plot of land before the individual units or parcels within it are subdivided and given separate titles. Master Title is usually used in situations where a real estate development project is underway, but the individual units have not yet been completed or sold. The developer holds the Master Title until the project is fully developed and the individual units are ready for sale.
For example, a property developer planning a gated community with 100 homes will initially hold Master Title for the entire development. Once each house is completed and sold, individual titles (such as Freehold Titles or Leasehold Titles) are issued to the respective buyers. A Master Title serves as a legal place holder until individual properties are ready for individual ownership.
It is important to note that real estate laws and regulations may change from time to time, so you are advised to check with local authorities for the latest information on property ownership in Malaysia, especially if you are involved in real estate transactions.