His Majesty's Speech and Strata Title

As always His Majesty's Birthday Speech contained enough to satisfy everyone. His touch in knowing what the issues are and how to solve them is something which we have always admired in him.

Some have asked me to comment on His Majesty's speech but I think that would be better be left to the people out there. Of the issues which concern the public the most is always financial. By the comments I read in the newspapers, in Facebook and even in Twitter, many are happy that there will be a monthly pension to both the public and private sectors, many are also happy that the retirement age has been increased. If I was still in MOF, I would have been happy to include all the details here as I did before but in this particular case, we have to wait for MOF to give us all the details today.

Of the many issues that His Majesty touched on, one in particular is something we in MOD is responsible for. That is the enforcement of the strata title. The Strata Title legislation is a law which has been enacted quite sometime ago but was never enforced. What is the legislation concerning strata title?

Strata Title refers to the title of ownership of a particular unit in a building. For instance, if you own land, you own a title deed to the land or in Brunei term - "geran tanah". This title deed says you are the owner and you can do more or less what you want to do with the land subject to the regulations governing the use of the land. But most importantly you can sell it or you can buy another piece of land from someone else and get the 'geran tanah' for that land.

If you build a house on the land, you can sell the house together with the land. What happens if you happen to own a building with 20 apartments? Can you sell one apartment and keep the rest? Technically you can. But if I was the buyer I would want the title deed to that one apartment you sold to me. I want the 'geran tanah' for that apartment. You the seller cannot give it to me because you don't have the official 'geran tanah' for the apartment. What the public has done is to go into various legal ways such as having powers of attorney and trust deeds to secure the ownership of that apartment. What happens when I want to sell the apartment I bought? The next person who buys it from me have to go through those legal hoops again.

So, the strata title act now allows you the building owner to apply for 'geran tanah' or title deeds to all those apartments in the building that you have just built. You can now easily sell those units because each has a title deed and selling each apartment would be just as easy as it is to sell land. It is just a matter of transferring the title deeds from you as the seller to me as the buyer. The Strata title is the 'geran' or title for each apartment.

What about the land where the building is sitting on? That land will belong to the owner of the land. While the building is up there with all those apartments, the owner cannot sell the land. Every single owner of the apartments have legal rights and this is covered in the legislation. The legislation covers many other aspects but in a nutshell, the strata title act will allow people to own 'spaces' and have title deeds to those spaces.

How would this benefit the country? First of all, it would benefit land owners. Land owners will now be able to develop their land and build high rise apartments as they can now sell those apartments. Everyone can buy those apartments. If the price is right, many people will be able to afford to buy apartments. Previously they have to buy houses and land together but now they can just buy apartments, making the price cheaper. There is no restriction who can buy the apartments including foreigners. With this strata title legislation, there is expected to be a boom in construction industry. Booms in construction industries will lead to booms in other sectors of the economy.

The Strata Title legislation or the proper name is the Land Code (Strata) Cap 189 of the Brunei Laws is available for purchase from the Law library at the Law Building in Jalan Tutong for $20. You can download a free pdf from the AGC website. There is one amendment which is to this published law, the strata title can be as long as 99 years. In the original law, it is 60 years.

Comments

Gembo said…
Salam, thanks for the explanation on Strata. Am sure this would attract foreigners to invest here.

Gembo
Halim said…
A'kum, thanks for the clarification. Very interesting.
A Abdul said…
Salaam.

There are still many questions about what happens after 99 years. Can the landowner automatically renew the strata title? Why is it 99 years anyway? Why not make it freehold/indefinite?

Investors and Home Buyers have always been slightly sensitive about purchasing something 'leased' because of the notion that it is temporary and that it carries a risk of not being able to pass it down to their kins, etc.

Although the Strata Title theoretically makes it easier to everyone to own something under their own name, with their own tile deed, for many apartment buyers / investors, this 99year lease is still a snagging issue that makes them think twice.

Nonetheless, it is good that Brunei now has such title. Since its release more than 5years ago, I believe this question should already be tackled by the appropriate authorities and the solution should be formally announced /recorded.

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