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While most property buyers are worried sick about not getting the document of title to their properties promptly, there are some 38,000 land titles unclaimed, as revealed by the Land and Mines deputy director-general Abd Halim Ain to a local paper recently. In that article, Abd Halim Ain also warned of the possibility of these uncollected titles “falling into the wrong hands through unscrupulous means”.
In light of the string of reported property frauds across the nation, it’s surprising that these 38,000 property owners are lackadaisical towards promptly obtaining their property ownership papers.
In July 2007, the Internal Security Ministry revealed the rising numbers of fraudulent land transfers as shown here:
Year |
Cases |
2001 |
16 |
2002 |
19 |
2003 |
22 |
2004 |
32 |
2005 |
35 |
2006 |
40 |
Up to May 2007 |
16 |
At the 14th Malaysian Law Conference at the end of October last year, Assistant Commissioner of Police (ACP) Tan Kok Liang, principal assistant director of the Commercial Crime Investigation Department’s legal/inspectorate division, revealed that only four arrests were made. ACP Tan also presented the following figures at the conference:
However, these figures are not reflective of the newspaper reports of fraudulent land transfers worth millions of ringgit over the decades. The Federal Court decision in the Adorna Properties Sdn Bhd vs Boonsom Boonyanit case must have put fear into the hearts of property owners, fascinating and horrifying as it was. It was bad enough that criminals had begun to “steal” the titles of innocent owners in increasing numbers, but the problem became more acute with the controversial decision of the Boonsom case.
The most common method used in real estate fraud is “identify theft”. According to Wikipedia: “Identity theft is a term used to refer to fraud that involves stealing money or getting other benefits by pretending to be someone else. The term is relatively new and is actually a misnomer, since it is not inherently possible to steal an identity, only to use it. The person whose identity is used can suffer various consequences when they are held responsible for the perpetrator’s actions. In many countries, specific laws make it a crime to use another person’s identity for personal gain.”
The onus is on the property owner to prove the crime. It can be very costly – financially and emotionally – to claim back your property and, like the infamous Boonsom case, your success is not guaranteed even if you are the innocent party.
Most people are aware of criminals using identity theft to commit credit card fraud but the same tactic can be used to forge documents to transfer properties without the owners’ knowledge.
“Prevention is better than cure” is one phrase that property owners should abide by. Property owners should take an active role in protecting their property by “staying in touch” with their property. Since fraudsters are known to impersonate the owner of a property by obtaining false identification and then transferring property that does not belong to them, it helps that you take precautions to detect fraud early. Another way in which you can protect yourself is by being cautious when granting power of attorney. Whenever you give another person a power of attorney that permits them to deal/ transact with your property, you should consult with your lawyers or advisers regarding appropriate limitations.
Everyone has a role to play in combating property fraudsters. Whether you are an owner or intend to purchase a property, pay attention to the following (though not exhaustive) list in order to prevent or detect fraud early:
Owner
- Unusual calls - You receive phone calls from callers enquiring about your property when you have never or have no intention of putting it up for sale;
- Keep property occupied - Idle land and properties where the owners are away are also a target for fraudsters. Vacant properties are more attractive to buyers, who can close the deal quickly, but if the property is occupied by tenants, chances are the potential buyers would want to know of the tenancy agreement and would need to enquire directly with the rightful owner;
- Thumbprints – it has been suggested that fingerprinting alongside a signature be used for dealings/transactions that relate to issuance of documents of title. The Kuala Lumpur Land and Mines Office has made it a requirement from March 2007 for property owners to provide thumbprints as well as their signature when applying for replacement of title deeds to curb land deal frauds.
- Regular searches every three months – Another piece of advice given is to conduct a search on your own property every three months or so. The cost of a search is about RM30.
- Private caveat – one other tip given by a lawyer is to lodge a private caveat (valid for six years) against your own land using a friendly party. The National Land Code prohibits the registered owner from caveating his/her own property but allows one third party having a “beneficial interest” to do so.
Purchaser
- The vendor has a copy of the transfer/deed but does not have any other documents relating to the property (eg receipts of quit rent or assessment tax for the past years)
- The vendor does not retain the same lawyer who acted in his/her purchase transaction
- The vendor does not have fire insurance on the home
- The vendor needs to close the transaction very quickly
- The purchase price is much lower than the market price
- The name of the vendor does not match the names on utility bills
- You are urged not to visit the property site as it is not safe or the road is not ready
Various concerned bodies and individuals have called on the government to provide assurance to property owners and buyers through amendments to the relevant sections of the National Land Code to reverse the effects of the Boonsom case. Mr Chang Kim Loong, honorary secretary-general of the National House Buyers Association, has also urged the government to back title insurance schemes, similar to the coverage property owners in Canada and other countries can get, as protection from defective titles, fraud or forgery. The onus is still on property owners and buyers to take precautions not to end up as victims. For those who have pending titles at land offices, do not wait for your lawyers to inform you when the titles are ready for collection, but periodically check with your lawyers for updates or even make regular visits to the land offices to check on the progress of the title issuance yourself.
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The National House Buyers Association (HBA) is a voluntary, non-governmental organization manned by unpaid volunteers. For more information, check out their website at http://www.hba.org.my |
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