Land Mix-Up

15/04/2016 09:31

MANY consumers are now investing in personal property such as land. Land has become a much sought after household asset and a boom in land development especially for residential lots has been noticeable in the last five years.

The boom has come with its fair share of unscrupulous land developers, real estate agents and valuer. The Council has also found real estate and mortgagee sale deals involving financial institutions where consumers have been denied the right to redress and justice.

Furthermore, outdated practices in land and property sales continue to be used. The Council believes that the old method of marking and measuring land plots by using existing landmarks such as trees, shrubs, rock, creek, river or wooden posts should discontinue immediately. This method is an inaccurate and unreliable way of measuring and marking out land plots. 

It is of grave concern that the relevant authorities are not using proper peg markings to identify different land plots.

Recently, the Council dealt with a case where two consumers mixed up their land plots because there were no proper peg markings or numbering to identify the two properties. Besides, the lease was unregistered.  

Case study

Mr. Tomson and Mr. Chandra purchased empty plots next to each other. Mr. Tomson decided to build a house for his family, while Mr. Chandra intended to develop his piece after a few years.

Mr. Tomson, who rightfully owned Plot 2, unknowingly, commenced building his house on Plot 1 which belonged to Mr. Chandra. This error arose because the plots were not marked or numbered and the lease was not registered. On the other hand, Mr. Chandra was under the assumption that the empty land plot belonged to him.

In order to purchase the land and build a house, Mr. Tomson took a loan from a financial institution. Unfortunately, Mr. Tomson faced financial hardships and was unable to keep up with repayments. Eventually his property was placed under mortgagee sale.

After viewing the mortgagee sale advertisement in the local dailies, Mrs. Tika tendered in her offer and the tender for the property was awarded to her for which she paid $48,000. 

Later on Mr. Tomson informed Mrs. Tika that the property she acquired through the mortgagee sale was the vacant lot as per the documents. Mrs. Tika was devastated because she had made plans to move into her newly acquired home. Mrs. Tika contacted the financial institution and they admitted that they were not aware that Mr Tomson had built his house on a plot that belonged to Mr Chandra. Mrs. Tika was also frustrated as she believed that she was misled into buying a property that she was unable to occupy immediately. The problem was finally resolved when Mr Chandra agreed to get the plot numbers altered so that he could keep Plot 2 which was a vacant piece of land.

Such problems can be avoided if financial institutions involved in land transactions take responsibility.  The relevant authority should also ensure that land leases are registered and peg markings were on the land to clearly indicate the exact size of a plot.

Furthermore, the financial institution concerned should have thoroughly analysed and verified all documentation before issuing loans to avoid problems faced by Mr Chandra and Mrs. Tika. The financial institution was fortunate to avoid a legal battle only because Mr Chandra and Mrs. Tika mutually agreed to swap their plots.

The financial institution and/or the relevant authorities should reimburse all costs incurred by Mrs Tika to rectify the errors caused by the financial institution and the land authorities.

The Council has also noted that because land plots are not marked in rural and semi-urban areas, many conflicts arise between neighboring consumers arguing over whose land ends where.

The Council would like to advise consumers to obtain appropriate documentation from their lessor/owners and ensure that their land plot is clearly pegged and numbered to avoid problems. Consumers should also verify the status of the land i.e. freehold, state lease or native lease and under whose name title or lease is under.