Tutorial 5 Su Bao Xuan 1912408

Differentiate between the terms:

1. “Lease” and “Tenancy”
Lease Tenancy
Renting of land to have the benefits in return for payment of a money
For a term more than 3 years For a term up to 3 years
A lease is to be registered under NLC A tenancy is exempted from registration
under NLC
Effect: Registration results in the lease to be Effect: If a 3rd party is buying the land or
endorsed on the title deed and therefore, in the creating a charge, such person may not know
Register of Title about the tenancy which is not registered in
the title deed and Register of Title
A lease that is not registered is said to be void Tenancy agreement is valid under contract
under the NLC. But valid under contract law law
Enjoy exclusive possession
He will have a registered interest which will If the tenant fail to do this, such tenancy
have priority over any unregistered interest would not bind any subsequent lessee, sub-
over the person having the tenancy or an lessee, tenant, chargee or lien-holder
unregistered lease may otherwise have

2. “Licence” and “Lease”

Licence
 A license does not create an interest in land but is a personal obligation, compensation on
breach with damages
 The licensor does not hand over exclusive possession of the property but retains his or her
right to use it
 E.g. A hotel allows a guest stay in a room, a cinema allows a patron to sit in its theatre
 A license is usually evidenced by an agreement/document stating that permission being
granted by a party (the licensor) to another party (the licensee)
Lease
 For a term more than 3 years
 A lease is to be registered under NLC
 Registration results in the lease to be endorsed on the title deed and therefore, in the Register
of Title
 A lease that is not registered is said to be void under the NLC. But valid under contract law
 He will have a registered interest which will have priority over any unregistered interest over
the person having the tenancy or an unregistered lease may otherwise have
3. “Positive Easement” and “Negative Easement”
Positive Easement
 Allows the proprietor of the dominant land to do something in, over or upon the servient land
 Example: gives the right to use a piece of land of another in a particular way such as right of
way
Negative Easement
 Requires the proprietor of the servient land to abstain from doing something which would
interfere with the enjoyment of the dominant land
 Example: right exercised by the owner of a piece of land to prevent another from using his
land in a particular way such as right to natural light

4. “Charge” and “Lien”

Charge Lien
Security of repayment of a loan Security for a loan
To create a charge, the parties must undergo To create lien, no registration from is required
several procedures including registering form
16A
Lien holder to lodge a line-holder’s caveat in
form 19D
Remedy for default-apply for order for sale or Remedy - to prove the debt and get order for
take possession sale
Creation of charge is onerous Creation of lien is speedy

5. “Private Caveat” and “Lien-holder’s Caveat”

Private Caveat
 lodge by private person or body who has caveatable interest in relation to the land
 Person or Body (Section 323)
 Person or body claiming interest or title
 Beneficiary or a trust – affecting land under trust or interest under trust
 Guardian of minor who is a beneficiary to a trust
 Private caveats are practically entered every day throughout Peninsular Malaysia in
transactions involving sales and purchases of land of various categories of uses (including
industrial land, houses and strata title units like condominiums), and loan transactions to
finance the purchases of various immovable property.
 A basic working knowledge of private caveats is therefore important to the practice of
solicitors in advising or acting for their clients whether in conveyancing or litigation.
 An application for the entry of private caveat shall be made via Form 19B in accordance with
Section 323 of NLC 1965 by any person or body claiming an interest in the alienated land.
 The proviso to Section 322(1) of the NLC 1965 that “such a caveat shall not be capable of
being entered in respect of a part of the land” give rise to some difficulties as it was
contended that a person claiming an interest in a portion is not entitled to caveat the whole
land.
 A purchaser of a housing accommodation without individual or strata title is entitled to lodge
a caveat against a ‘master title’.
 The purpose of a private caveat is to preserve the status quo pending the taking of timeous
steps by the applicant to enforce his claim to an interest in the land by proceedings in the
courts.
 By Section 322(2) the effect of entry of a caveat expressed to bind the land itself is to prevent
any registered disposition of the land except with the caveator’s consent until the caveat is
removed.
Lien-holder’s Caveat
 Lien is a security dealing where a proprietor of land or lessee may deposit his issue document
of title with any other person or body, as a security of a loan
 This dealing is not capable of registration under the NLC, however it can be protected by
Lien-holders caveat
 Upon such deposit, the depositee may apply under Section 330 (1) and (2) of the NLC 1965
in the duly attested Form 19D to the Registrar, accompanied by the relevant title or lease and
the prescribed fee, for the entry of a lien-holder’s caveat
 If at the time of receipt of such an application, there is no prohibition by a Registrar’s Caveat,
Private Caveat, Trust Caveat or Prohibitory Order, the Registrar shall enter the caveat under
Section 330(3)(a) of the NLC 1965 and serve notification in Form 19A on the proprietor or
lessee
 Section 281(1)(b) of the NLC 1965 provides that the lien-holder “shall upon the entry of such
a caveat, become entitled to a lien over the land or lease”
 Therefore, entitlement to the statutory lien takes effect only upon entry of a lien-holder’s
caveat.