BWBB 3043 BANKING SECURITIES

STUDY CASE ON THE ISSUES AND IMPORTANCE OF CAVEAT

INTRODUCTION

According to the Cambridge dictionary, the definition of caveat is a reminder to consider something before taking any further action, or a statement that limits a more general statement.

Based on what is enshrined in the National Land Code (Act 56 1965), Caveat is divided into 4, namely:

1) Registrar's Caveats - Caveats entered (registered) by the Land Registrar on the Document of Title

2) Private Caveats (Private Caveats) - Caveats that can be entered by individuals or private bodies that have an interest in a particular land.

3) Lien-Holders 'Caveats-Caveats entered by an individual or a body which holds title documents as collateral for a specific purpose such as lending (e.g. a bank).

4) Trust Caveats - These caveats are only entered by the Registrar against any land or interest owned by an individual or body as a trustee.

Each caveat has a specific duration. the following are the periods for each caveat:

1)Caveat Registrar - Determined by the title registrar

2) Personal Caveat - 6 years

3) Caveat Holder (Lien) - Revoked by the mortgagee, Revoked by the Registrar when the debt has been fully settled or when the land is sold by order of sale.

4) Trust Caveat - will remain in force until revoked by the Registrar upon application by the trustee & the person entitled under the trust.

There are few things that can be caveated.

(a) the whole land,

(b) unresolved shares and

(c) interest in land

Means on the land title deed is recorded a statement about

the existence of this caveat

The importance of caveats is for preventing landowners from making a business. It also can be a protective equipment to protect the interests of caveat entrants temporarily until his claim is settled at court. And lastly, it can be a notice tool where it can warn the public states the caveat entrant has an interest in the land concerned. However, this caveat is only temporary and not yet final, it is a temporary prisoner awaiting word break from the Court.

IDENTIFY THE DIFFERENT TYPES OF CAVEAT

There are few things that can be identified for each caveat which is purpose and circumstances.

Registrar caveat :

(a)To prevent fraud in transactions such as fraud, misrepresentation and misuse of forms.

(b)To protect the interests of:-

(i) Federal Government and State Government in terms of claims debts, land revenuearrears and loan repayments.

(ii) children, insane persons or known persons not in the Country at the time.

(c) To guarantee the repayment of loans to the government Federal and State such as housing loans.

(d) To correct errors occurring in title documents or other instruments relating to land and its interests. S. 320 (1).

As for the Private Caveat, it is more clear and more obvious. This kind of caveat can be entered by any individual who has a personal stake in the title to the land, regardless of whether it isn't theirs. Models are individuals who have put aside halfway installment of an installment for the buy or individuals who have an enrolled rent concurrence on the land. Be that as it may, this private caveat doesn't block different issues from happening over such title like certain supports. Private caveat will naturally void following 6 years.

For the term of lien holder caveat, an application to enter a caveat must be accompanied by issue title documents or duplicate lease along with payment designated. Upon receipt of the application, the registrar shall record the time of receipt and as soon as possible;

(a) enter the caveat applied for and

(b) deliver Form 19 A to the landowner or holder lease.

The inclusion of this caveat shall take effect with the endorsement on the relevant document, signed and sealed together with a statement stating:

(a) whether this caveat binds the ground,

(b) the name of the person or body entering the caveat,

(c) the effective period and

(d) the file reference in question.

Trust caveats may be entered by the Registrar on any land or interest held by any person or body 'As a trustee' on application:-

(i) the trustee at the time in respect of any land or interest.

(ii) the person or body who first transferred any land or interest to the holder trust.

(iii) the person or body creating any interest for the benefit of the trustee.

ANALYZE THE ISSUE IN CAVEAT

The issue in caveat is about the fraud. The fraud can be made in any type of land. Fraud is an issue that always occured in Malaysia and it also is one of the main issues in the caveat. The caveat can make a person fraudulent the land of the owner even though never sold the land to other people. The fraudster can fraud through pretending the identity of the owner and doing the transaction as an owner without the consent of the actual owner. It could make other people believe that the fraudster is the owner without any doubt. For example, the fraud can be found in the case that happened in Malaysia which about the Taiwanese Businessman Chen Wei Pin's land has been registered as the private caveat by the Zen Zaman Sdn Bhd although it did not sell the land. From the cases can know that the fraud is easily occurred although never do the any transaction regarding the transfer or sold the interest and ownership of an asset. The fraudster can easily copy a document and can enter a caveat easily without any permission of the owner. Hence, it will bring a lot of problems and issues to the society especially for the owner of the land and it could make the owner become flustered and uneasy.

Caveat can be entered easily by any individual is one of the issues in caveat. Caveat is easily registered or entered by any individual claim that has rights in the land without any document evidence. Caveat can be registered in order to protect the claim to an interest in a land and there is no need for any document evidence provided by the registrants. Hence, it could bring a lot of issues and problems to the land owner because it will not need the proof by the owner. For instance, the case of Yeap Joo Kim v. Ong Choo Ean is about the plaintiff suing the defendant due to the defendant not being the beneficiary of the land but she already registered the caveat for four years. The defendant, who is one of the beneficiary's wife stated that she had lent some money to her husband and the husband was verbally admitting trust in his inheritance. In this case, there was no documented evidence that the defendant's husband entrusted her estate including the land and all of this said by the defendant verbally. Therefore, the court removes the caveat that the defendant does not fulfill the requirement by the government which has nothing to do withthe land.

QUESTION 1: BASED ON THE CASE STUDY ABOVE, IDENTIFY THE SOME SOLUTIONS OF THE CAVEAT(50 MARKS)