BANDAR SERI BEGAWAN
Friday, May 11, 2012
BRUNEI'S Law Society yesterday issued a strongly-worded statement
condemning the potential passing of any law that would have a
retrospective effect on property owned through power of attorney (PA).
The Law Society, in a statement signed by its President Hj Muhammad Zainidi Hj Abdul Hamid,
expressed deep concern over the recent government move to invalidate
all property owned through PA or trust deeds, and convert them into
60-year leases.
"This type of action would ignore any accepted
standards of the rule of law; and would set a very grave precedent which
would not foster confidence both locally and internationally," the
society stated.
The new policy, which effectively ends the only
means for permanent residents and foreigners to own land or housing in
Brunei, has caused an outcry among certain sectors.
The
government says the move will increase transparency in land ownership -
as the 47,000 property deeds issued through PA are not registered with
the Land Department - but critics say it deprives property owners of
assets they bought in good faith, and could lead to legal disputes
between buyers and the lawyers and agents who issued the PAs.
"The
Law Society believes that as far as possible, changes in the law should
not create uncertainty, lead to disputes and unduly cause unfairness or
hardship."
The society said it hoped authorities "would consider
with care" any proposed amendments or changes to the law, adding that
any draft proposals should be circulated for the purpose of public
consultation.
The Minister of Development Yang Berhormat Pehin Orang Kaya Indera Pahlawan Dato Seri Setia Hj Suyoi Hj Osman
made the controversial announcement last March during the eighth
session of the Legislative Council, saying all property purchased
through PA or trust deeds would be converted into temporary leases
"effective immediately". He also said amendments to the Land Code were
being drafted to enforce the policy.
However, both property
owners and realtors remain in limbo, unclear whether they can still buy
or sell property to "ineligible persons" without black and white laws to
sanction such transactions.
The Law Society noted that since the
policy was announced, there have been no amendments to the laws
relating to land ownership, and that the government has yet to clarify
the issue.
It added: "Brunei courts have on the basis of the laws
of contract and equity given effect to the unregistered interests in
land in Brunei ... There have been no published laws that specifically
prohibit non-citizens from holding interests in landed property."
"In
the recent past there has also been implicit acceptance of ownership of
beneficial interests in land, in relation to applications for permanent
residency by temporary residents, and the requirement for proof of
investment in Brunei."
The minister has rebuffed suggestions that
the policy would deter foreign investment in Brunei, saying authorities
were still reviewing conditions that would allow PA to be used for
commercial land development.
"For the purpose of development it will still be allowed on a case-to-case basis, that will be no problem ...
"But for the purpose of ownership, that's something that we want to control," he said in an interview last March. - Quratul-Ain Bandial
The Brunei Times
THE new Power of Attorney (PA) rule has forced many investors residential or commercial to consider moving out of Brunei to other investment-friendly destinations for the security of their investments, a Legislative Council (LegCo) member mentioned yesterday.
In his closing remarks on the last day of the Eighth Legislative Council (LegCo) session, Yang Berhormat Hj Ahmad Morshidi Pehin Orang Kaya Di-Gadong Seri Di-Raja Dato Laila Utama Hj Abdul Rahman said that the matter must be taken "seriously" by the ministries concerned so that the investors do not make any hasty decisions."If delayed, Brunei could lose out on investment because investors may withdraw their money from Brunei and added that they may continue their businesses here, however they may not reinvest in the Sultanate," he said. YB Hj Morshidi said those affected were worried because the rule was not yet clear about what will happen in future.
The Minister of Development announced on March 8, 2012, that permanent residents and foreigners will no longer be able to purchase property or land through PA or trust deeds (TD), making it clear that land can only be owned by those eligible, namely Bruneian citizens.
However, Yang Berhormat Pehin Orang Kaya Indera Pahlawan Dato Seri Setia Hj Suyoi Hj Osman said that effective immediately all property purchased through PA or TD will be converted into 60-year leases.
Yesterday, YB Pehin Dato Hj Suyoi explained that the reason for implementing the PA/TD rule was to safeguard the interests of Bruneians and to ensure that the land in Brunei does not end up in the hands of those who don't have the right to own it.
YB Pehin Dato Hj Suyoi urged the public not to misunderstand the motive behind the new law.
"Those who are not Bruneian, can still use part of the land, or property owned, by the registered owner of the property through the Land Code Strata Act, Chapter 189, for commercial purposes. This includes shopping areas, residences and so on," he said.
The minister stressed that: "We did not do this to discourage investment in the country; or restrict non-Bruneians from staying in the country, or engage in economic activities in Brunei. That is not the purpose."
YB Pehin Dato Hj Suyoi said he hoped that residents and citizens in Brunei will welcome this change, as an effort to maintain ownership of land for Bruneians.
"This new rule, is the same as what is done in other countries," he said.
The minister informed that there are more than 47, 243 PAs issued and registered in the Attorney General Chambers (AGC) with a total land area of 4,959.3223 acres throughout Brunei.
He added that currently, there are three times of PA/TD, the first, is equitable ownership where the real owner is registered with the Land Department, whilst the PA holder is registered at the AGC.
The second PA is for development, whereas the third is for the purpose of collateral for bank loans, where the PA will be terminated and returned to the original landowner.
The Brunei Times
Source: http://www.bt.com.bn/legco/2012/03/18/new-pa-rule-may-hit-investment
