Malay Reserve Land can be degazetted to become non-Malay status land and can also be rented out to non-Malays for three years and renewed indefinitely for a three-year period each time, says top legal brain.
Text & Photography by Jan Yong
In West Malaysia, land reserved for Malay only use and ownership is referred to as Malay Reserve Land (MRL) while in East Malaysia (Sabah and Sarawak), it’s called native land. Other than Penang and Melaka, every state has its own MRL enactment.
Whether land is gazetted or degazetted out to non-Malays is governed under this enactment. The body making this decision is the state authority which delegates it to the exco, which is headed by the Menteri Besar as chairman.
According to Prof Datuk Dr Nik Mohd Zain, one of Malaysia’s top brains in land law, Article 89(1) of the Malaysian Constitution empowers the state to gazette any state land (not owned by anyone) or reserve land as MRL.
“If there is an application by a land owner under Art 89(2) to request the state to revoke the MRL status because he wants to sell to a non-Malay, this is possible provided the state must replace the said land with another piece of land with “similar character” ”, says the professor who was once a member of the committee which drafted the National Land Code of Malaysia.
For example, town land must be replaced with town land of equal value. However, because it is difficult to get another similar piece of non-Malay Reserve town land of equal value, this requirement has been relaxed to allow the replacement land to be of equal value but of a different category.
“For instance, say you want to degazette 10 acres of MRL in Shah Alam worth RM50 mil, both the owner and buyer must find another piece of land in Selangor, for example, 50 acres of agricultural land in Ulu Yam of equal value, to be the replacement land. This 50-acre land will then be gazetted as MRL while the 10-acre Shah Alam land can be degazetted and sold to the non-Malay.”
“In theory, the only condition is that the replacement land must be of equal “status”, but this literal interpretation is illogical because it would be practically impossible to get another town land of similar value to be gazetted to MRL as replacement,” explains Datuk Dr Nik Mohd, who was also formerly the Director General of Lands and Mines Malaysia and the Federal Lands Commissioner of Malaysia.
In other words, the replacement land can be a non-Malay Reserve land of any category within the same state as long as its value is equal to that of the land intended to be degazetted.
This is practised in all the states (except Penang and Melaka) with most occurring in the states of Selangor, Kedah and Johor.
In Kelantan, 85% of the land is MRL, hence it is almost impossible to find non-Malay land to be exchanged. As such, this requirement is waived and the Kelantan exco is given special powers to degazette any MRL to non-Malay land on condition that the land is alienated on a leasehold of 66 years instead of freehold.
“This 66-year period is good enough for three cycles or seasons of oil palm or one cycle of durian life,” notes the land expert.
Usually, the state exco will take about six months as per its client charter to make a decision. Although there are no published statistics on the approval rate of degazetting applications, the land law professor believes that Kelantan at the moment has an approval rate of 100%. This is because most applications there involve the state itself alienating the land; moreover, the land is only granted a 66-year leasehold.