Law Society makes firm stand on PA

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