
You may refer to Land Acquisition Act 1960 if your real estate or land in Malaysia or any part of it, is compulsorily acquired by the Government. Land Acquisition Act 1960 is an Act relating to the acquisition of land, the assessment of compensation to be made on account of such acquisition, and other matters incidental thereto.
Rights of a Property Owner in Malaysia
The rights of a property owner in Malaysia are governed by the following legislation.
- The Federal Constitution.
- The National Land Code 1965/ Land Ordinance (Sabah Cap. 68) 1950/ Sarawak Land Code (Cap. 81) 1958.
- The Land Acquisition Act 1960/ Land Acquisition Ordinance (Sabah Cap. 69) 1950/ Part IV of the Sarawak Land Code (Cap. 81) 1958.
Right to Acquire Land
Rights of a Property Owner in Malaysia
- Article 13 of the Federal Constitution provides for an individual’s right to property:
- 13 (1) – No person shall be deprived of property save in accordance with law.
- 13 (2) – No law shall provide for the compulsory use or acquisition of property without adequate.
- Article 13 of the Federal Constitution provides that no one can be deprived of their property except in accordance with law and that no person shall be deprived of his property without adequate compensation.
The law dealing with compulsory acquisition of land in Malaysia is the Land Acquisition Act, 1960. In Malaysia, all matters concerning land fall under the governance and jurisdiction of the State in which the land is situated. Section 3, Land Acquisition Act 1960 (As amended) provides that the State Authority may acquire property:
- For any public purpose;
- By any person or corporation for any purpose which in the opinion of the State Authority is beneficial to the economic development of Malaysia or any part thereof, or to the public generally or any class of the public; or
- For the purpose of mining or for residential, agricultural, commercial, industrial or recreational purposes or any combination of such purposes.
Under the Act, only the State Authority has the power to compulsorily acquire land, and the acquisition must be for a public purpose.
Thus, even if the land sought to be acquired is needed by say, a public utility company or a highway concessionaire etc. they would not be able commence the process or acquire it themselves but are instead compelled to apply to the State to acquire it on its behalf, thereby ensuring some measure of control by the State. When the proposed acquisition is approved by the State, the State Authority will cause a declaration of the proposed acquisition to be published in the State Gazette. The date of publication in the Gazette is important for determining compensation, as the market value of the land is to be assessed as at that date.
The Role of Valuation and Property Services Department (JPPH)
- JPPH or Jabatan Penilaian dan Perkhidmatan Harta is under the purview of Ministry of Finance Malaysia.
- JPPH carries out a detailed study of all losses that can be compensated and advises the Land Administrator on all matters related to compensation.
- The compensation is based on the First Schedule of the Land Acquisition Act 1960 (As amended)
- JPPH will defend its valuation if the land owner or any person interested in the scheduled land refers the objection to the High Court.
Land Acquisition Process
Here is the process of Land Acquisition in Malaysia.
- Gazette Notification under Section 4 of the Land Acquisition Act 1960 (As amended) that land is likely to be acquired.
- Gazette Notification under Section 8 of the Land Acquisition Act 1960 (As amended) to declare that land is to be acquired.
- Persons interested attend enquiry conducted by the Land Administrator to claim for compensation.
- JPPH Malaysia advises the Land Administrator on compensation.
- The Land Administrator prepares written award in Form G.
- Person interest who are not satisfied with the compensation awarded may file an appeal to the Land Administrator within six (6) weeks from the date of Land Administrator’s award.

Reference to Court
Any person interested in any scheduled land, who is dissatisfied with the Land Administrator’s award, can make a written objection in form N. Objections can only be made with regard to:
- The Measurement of Land.
- The Amount of The Compensation.
- The Person to Whom it is Payable.
- The Apportionment of The Compensation.
Rights of the person interested
- All persons interested can make a claim for compensation to the Land Administrator within the prescribed time.
- All persons interested can engage a private Valuer and the costs can be reimbursed by the Government.
- A person interested is anyone who has an interest in the compensation
Principles of Compensation
The First Schedule of the Land Acquisition Act 1960 (As amended) lists the principles for determining the amount of compensation. Amongst others, it comprises:
- Market value of the land;
- Betterment;
- Severance;
- Injurious Affection;
- Incidental expenses incurred as a result of change of residence or place of business;
- Accommodation Works.
The Land Acquisition Act 1960 does not itself contain any provisions for objecting to the acquisition. The general scheme of the Land Acquisition Act 1960 is that the landowner will only be entitled to monetary compensation for his loss. If his land is WHOLELY acquired, the landowner is entitled to claim the market value of the land or other cost of site improvements (e.g. drainage, building, road & etc) that have done before the State Authority issue the gazette to acquire.
However, if the land is PARTIALLY acquired, he may, in addition to claim for market value of the portion of the acquired land, he may also claim compensation for Severance or/and Injurious Affection subject to how the land is being acquired and the landowner is being affected negatively.
On the other hand, if the acquired portion divides the remainder of his land portion into two parts, then he may be able to claim compensation for severance. The compensation for injurious affection or severance is usually the diminution in value of the remainder of his land caused by the acquisition. Furthermore, if the acquisition compels the landowner to change his place of residence or place of business, reasonable expenses incidental thereto may be claimed.
Under the Land Acquisition Act, the Land Administrator must conduct an enquiry to assess the compensation payable. He will schedule a date for the enquiry and issue notice of it to the landowner, the occupier (if not the landowner), any person having any registered interest in the land (e.g. a charger or lessee) and any person whom he knows or has reason to be interested therein.
Landowners are strongly advised to appoint a Registered Valuer to advise them on the compensation they should claim. At the enquiry, the Land Administrator will invariably be provided with a valuation report prepared by the State’s Jabatan Penilaian & Pengurusan Harta (JPPH) and, in the absence of any other valuation report, he will usually adopt the recommendations in the JPPH Valuation Report, The concern is that the JPPH Valuation Report may not necessarily capture all claims a landowner should make.
Conclusion
This is an overview of the process of a compulsory acquisition of private land in Malaysia under the Land Acquisition Act 1960. While the Federal Constitution protects a citizen’s right to land, the law still allows for the Government to acquire the said land. In conclusion, if you think owning a piece of freehold land belongs to you forever, you might want to consider again.