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Newsletter - July 2008
 
Malaysia — Property Title Risk Mitigation
 
Malaysia operates a deeds registration system where each state has its own land rules. There is no state guarantee of title as well as no legal protection for purchasers deprived of their properties if, by fraud or forgery, the property is transferred to them by a fraudster.
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A woman used a forged passport and two false statutory declarations and obtained the replacement or duplicate titles of two valuable pieces of land in Tanjung Bungah, Penang from the Land Office following which she sold the properties and gave the buyer a fantastic discount. The buyer then sold the properties to a third party while the real owner was completely unaware of all these acts.
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Another case of fraud involves a 6.5 ha land in Cheras valued at more than RM 10 million that was transferred despite a caveat on the property. The real owner denied any knowledge of such transaction and although he holds the original title to his land, attempts to retrieve records of his ownership at the Land Office have proved unsuccessful.
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Government and police statistics showed that there were 16 land scams recorded in 2001, 19 in 2002, 22 in 2003, 32 in 2004, 35 in 2005, 80 in 2006.
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Many of these cases seem to happen in Klang Valley, Kuala Lumpur, Selangor, and Penang where the value of land is high.
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It is almost impossible to verify whether a title deed has been issued legally. This may become evident only on receipt of a complaint and government investigation, which could be long after the title deed has been issued and transactions have been made.
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Title Insurance
 
First American's title insurance policy insures that an owner owns their property. This includes loss caused by illegal issuance of title deed and loss due to fraud and forgery.
 

 
For further information please contact us at +852 2161 9105 , or by visiting www.firstam.com.hk.