LADY Luck smiled on a tenant in Hong Kong early this month after the court awarded her ownership of a flat she had been renting for the past 37 years.
The story of how Lam Che ended up owning her 600sq ft unit in the To Kwa Wan district and now worth HK$2.4 million (RM984,000) actually began 26 years ago in 1984, after her landlady, Foung Sheu Kwun, stopped coming around to collect the monthly rent.
According to an English language daily in Hong Kong, Lam had since been occupying the flat rent-free but had dutifully paid all government charges for building maintenance and even became a member of the building owners’ corporation.
She also tried to find Foung and followed court instructions to place a missing person advertisement in a Chinese language newspaper … but still no Foung. It seemed the landlady had simply vanished off the face of the earth!
Fast forward to June this year, under advice, Lam sought a declaration from the court to make her the flat’s owner, citing adverse possession under the Hong Kong Limitation Ordinance (Chapter 347).
One section of the Ordinance states “No action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accrued …”.
Another part points out that “at the expiration of the period prescribed by this Ordinance, for any person to bring an action to recover land (including a redemption action), the title of that person to the land shall be extinguished”.
Simply, what this means is that if the owner of the flat wants to recover the property from the tenant, it has to be done within 12 years, failing which the title to the property is “extinguished” or gone forever.
In awarding judgement in the tenant’s favour and describing the case as “unusual”, Hong Kong’s deputy High Court judge Ian Carlson said that neither Foung nor her relatives showed up in court to counter the tenant’s application.
Given that there are similarities to Hong Kong’s law and Malaysia’s, can the same thing happen on these shores?
First, just like in Hong Kong, in the absence of a written tenancy agreement, an oral agreement (which Foung and Lam apparently entered into) is equally valid and binding.
Furthermore, under common law which applies to Hong Kong and Malaysia, unless there is a tenancy agreement that expressly states that the rent must be paid in a specific manner, at a specific place and to a specific person, then it must be paid at the premises and the owner must come around to collect it.
That means Lam was perfectly within her rights not to pay any rent until Foung showed up.There is also common ground in Hong Kong’s Limitation Ordinance and the local Limitation Act 1953, as the latter states: “No action shall be brought by any person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him, or if it first accrued to some person through whom he claims, to that person.”
The local version continues:”At the determination of the period limited by this Act to any person for bringing an action to recover land the right and title of such person to the land … shall be extinguished.”
However, where the conclusion of ownership could differ lies in the interpretation of the laws:”… from the date on which the right of action accrued …” need not necessarily mean it begins from the date Foung the landlady went missing.
If the Hong Kong judge declared the tenant as owner because neither she nor any of her family members came forward in court to claim it, there is no guarantee his Malaysian counterpart would do the same.
This is because of two reasons: First, the Hong Kong judge may not have applied the law correctly. And second, under our Torrens system, ownership of landed properties must be backed up by the production of a land title (for properties on terra firma) or strata title (formerly for subdivided buildings but lately also for landed horizontal stratified properties).
Without having a name on the title, it’s doubtful any judge in Malaysia will declare that a certain property belongs to anybody else.
* Professor Salleh Buang is an authority on land law in Malaysia and a columnist with NST Property.
By : Salleh Buang
Source : New Straits Times Property
Date Published : 23 August 2010