Lot Lidi : Why You Need to be Careful?

Purchasing Lot Lidi is becoming popular as people are looking for a cheaper way to own land.

As property prices continue to soar, most of us face the harsh reality that we might not be able to own a house for the rest of our lives.

As such, when the opportunity comes, many take it with little deliberation and due diligence. What is important is that we own land on which we can build our dream home.

However, did you know owning a Lot Lidi does not mean owning the land you bought? Let's learn a little bit more about Lot Lidi.

What is Lot Lidi?

The concept of Lot Lidi refers to land that is subdivided into several smaller lots by the owner and sold to willing buyers.

However, the buyers will not receive any grant or title to prove ownership; instead, they will receive a letter stating that the land is held under Trust Deed.

Because there is no ownership, buying a Lot Lidi is way cheaper than buying land with an individual title. However, without a land title, the buyer is not the legal owner of the land.

As such, Lot Lidi cannot be used as collateral or left to the next of kin upon the death of the person who had "bought" the land.

The sad reality is that this easy and popular method of owning land violates three related laws and creates various risks related to ownership.

Violations of relevant laws invalidate the transactions of the land lots in which the buyer's name cannot be registered as the land owner.

The three related laws violated are Kanun Tanah Negara, Akta Perancangan Bandar dan Desa 1976 serta Akta Jalan, Parit dan Bangunan 1974.

Why you should avoid Lot Lidi

1. Illegal Land Status

The Lot Lidi status is legally invalid because it did not undergo the land development process, which is boundary-breaking.

As such, buying the lot is considered an illegal business, and the land and any structure built on it are at risk and will be difficult to sell.

Without individual property rights, the buying and selling process is considered 'under the carpet,' and the buyer's name cannot be registered as the land owner.

2. No Ownership

As the buyer's name can not be registered as the land owner, the buyer's name will not appear on the land title. Geran or land title is an essential document to prove that you own the land, not anyone else.   

The buyer of Lot Lidi usually only receives a Letter from the Trustee (Surat Pemegang Amanah), which is highly risky as the trust deed is debatable. If any dispute arises, it normally benefits the real owner.

Without ownership, the land can not be treated as part of the buyer's estate and can not be passed or faraid to the next of kin.

The buyer also risks losing the lot at any time, as the state can take it away without compensating the person occupying the land. Compensation is usually paid to the real owner whose name is on the land title.

3. Agricultural land

Many of the lots offered are agricultural land, as the size is bigger, such as one or two acres. The land will then be divided into smaller lots suitable for building a house.

Most of the Lot Lidi were sold to buyers with the assurance that they could build on them. However, it is not easy to change the land status as agricultural land has its restrictions, in which only two-fifths of the area can be transferred to individuals, corporations, or related institutions. Most of the time, the land status remains agricultural even after the sale.

With no boundary-breaking process and no process to change the land category from agricultural to residential, the Lot Lidi became illegal.

Erecting a building on the land, especially if the land is known to be agricultural, is an offense punishable under Section 125 of the NLC 1965.

Before purchasing any land, you are advised to:

1. Always ask for a copy of the land title to confirm the land ownership details. It is important to note that as a buyer, you are supposed to be the sole owner of the land unless you agree to split the ownership with your partner or kids. Your name must be clearly stated in the land title after completing the purchase.

2. Conduct a Land Search by verifying the status of the land with the relevant authority, such as Pejabat Tanah. Prospective owners of a plot of land must check the status of the land, whether it's residential, commercial, reserved, or agricultural.

A land title search is a process of finding the details and status of a piece of land. A land title search must be done at the state's Land Office, where the land you are interested in purchasing is located.

3. Take your time making decisions, as buying land is a substantial monetary decision and will affect your long-term possession of the assets, including your inheritance to your next of kin.

Remember that it is not worth it if, at the end of it, your spouse or kids will need to move out of the home that you built so dearly simply because you did not understand the importance of having a land title for the land that you have occupied for so long.

Highlight

1. Lot Lidi is not legal, and there is no land title for a buyer who has bought the land.

2. Even though Lot Lidi is cheaper, the risk of losing the land without any compensation is greater

3. Do not buy Lot Lidi even if you are tempted. Without legal ownership, the land will not be part of your inheritance.