Be careful when negotiating with squatters

Malaysia adopts the Torrens system in land administration, which is a much more efficient and simple system as compared to the British deeds system. Under the Torrens system, a registered landowner's right in the land is indefeasible, and no extended occupation of land by squatters would ever create any legitimate expectation giving rise to equitable relief.

However, in the Court of Appeal decision of Rabiah Lip v Bukit Lenang Development Sdn Bhd, the Court of Appeal left open the possibility that a landowner who has made representations to squatters (who relied on those representations to expend money on the land) may be subject to a claim in proprietary estoppel against the landowner. In other words, the registered landowner's interest is indefeasible provided he has not made any representation in word or deed to the squatters which would allow them a claim in equity.

So, in dealing with squatters, and especially in any negotiations for them to leave the land, be careful, lest by word or deed you as the landowner are held liable in equity to permit a continued occupation of the land, even if the possibility of adverse possession is highly unlikely.

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If you have any questions or comments, drop me an email at khenghoe@mycounsel.com.my.