Introduction
In Sarawak, the leasing of land and premises—whether for residential, commercial, or agricultural purposes—is governed by specific legal frameworks that differ somewhat from those in Peninsular Malaysia. Land matters in Sarawak fall under the jurisdiction of the state, and are primarily regulated by the Sarawak Land Code (Cap. 81). This article explains the key elements of a lease arrangement, the contents and importance of a lease agreement, and the process of registering a Memorandum of Sublease in Sarawak, with the Land and Survey Department of Sarawak.
Legal meanings of the terms “lease” and ”sublease” in Sarawak Land Code (Cap. 81)
In the Sarawak Land Code (Cap. 81), the terms ”lease“ and ”sublease“ have distinct legal meanings and implications, which can be summarized as follows for the purpose of general understanding on the context of this article:
- Lease (Under Sarawak Land Code)
- Definition: A lease is a grant of land by the Sarawak government to an individual or entity for a specified period (e.g., 60 or 99 years).
- Legal Nature:
- The leaseholder (lessee) holds rights directly from the state.
- Governed under Section 13 of the Sarawak Land Code (Cap. 81).
- The lease is registered under the Land Registry of Sarawak.
- Key Features:
- The lessee has exclusive possession of the land.
- Can transfer, mortgage, or assign the lease (subject to the prescribed conditions).
- Upon expiry, the land reverts to the state unless renewed.
2. Sublease (Under Sarawak Land Code (Cap. 81))
- Definition: A sublease is an agreement where a leaseholder (lessee) grants part or all of their leasehold rights to another party (sublessee) for a shorter period.
- Legal Nature:
- The original leaseholder retains the master lease but creates a subordinate interest.
- Governed under Sections 158-168 of the Sarawak Land Code (Cap. 81).
- Requires consent from the Land and Survey Department if the original lease terms impose restrictions.
- Key Features:
- The sublessee’s rights are dependent on the original lease.
- If the main lease expires or is terminated, the sublease also ends.
- Commonly used in commercial properties, agriculture, or long-term rentals.
3. The concept of ‘Alienated Land’ Under Sarawak Land Code (Cap. 81)
In Sarawak, alienated land refers to State land that has been lawfully granted (alienated) by the State Authority to an individual or entity for private ownership, subject to conditions, restrictions, and tenure set out in a title document. The following are the summaries of points for the ‘alienation of land’ as per the Sarawak Land Code (Cap. 81):
| Feature | Description |
| Ownership Title | The registered proprietor receives a document of title, such as a Lease of State Land or Provisional Lease. |
| State Authority Involvement | Alienation must be approved by the Director of Lands and Surveys, on behalf of the Majlis Mesyuarat Kerajaan Negeri (MMKN) (State Cabinet). |
| Term of Title | Usually for a term of 60 years or 99 years, depending on the category (e.g., residential, commercial, industrial, agricultural). |
| Conditions | The land is subject to express and implied conditions, such as use restrictions (e.g., only for agriculture), and requirements to develop within a certain time. |
| Premium and Rent | The proprietor must pay land premium (one-time) and annual land rent. |
| Dealings Permitted | The land can be leased, charged, transferred, or subleased, subject to restrictions and registration under the Land Code. |
For the purpose of this article, the term ‘lease’ shall be read as the leasing of a duly owned land by the registered proprietor (lessor) to the lessee.
Lease Arrangements in Sarawak
A lease is a legal arrangement where the lessor (landowner) grants the lessee (tenant) the right to occupy and use land or premises for a specified period and consideration (usually rent). In Sarawak, the term “lease” typically applies to a tenure exceeding one (1) year, while tenancies for a year or less are usually regarded as licenses or tenancies at will.
Types of Lease in Sarawak
- State leases – issued by the government, often for development or agricultural purposes.
- Private leases – created between private parties, usually under a registered title.
- Subleases – where a lessee grants part of their leased interest to another party.
Leases exceeding one (1) year must be in writing and registered to be enforceable under the Sarawak Land Code (Cap. 81).
Essentials of a Lease Agreement
A Lease Agreement is a formal contract outlining the terms and conditions agreed upon by the lessor and lessee. It is both a legal and commercial document that governs the rights, obligations, and expectations of both parties.
Key elements typically included in a lease agreement:
- Parties to the agreement (lessor and lessee)
- Description of the leased property
- Duration of the lease (term)
- Rental amount and payment schedule
- Use of the property (e.g., residential, commercial)
- Maintenance and repair responsibilities
- Termination clauses and renewal options
- Covenants and restrictions
For leases intended to be registered, the agreement must also include a plan of the leased area, especially for subleases of part of a land title.
Registration of Form L – Memorandum of Sublease in Sarawak for the formal recordation of the Lease Arrangement/Agreement
In Sarawak, a Memorandum of Sublease (Form L) must be registered with the Land and Survey Department of Sarawak if the lease is for more than one (1) year. Registration will accord the following:-
- Gives legal recognition and enforceability to the lease.
- Protects the interest of the lessee against third-party claims.
- Ensures transparency of land dealings.
For an ease of understanding, the following is the scenario applicable for this matter:
Scenario A: XYZ Sdn. Bhd. is leasing land from ABC Sdn. Bhd.
- Who is the lessor? ABC Sdn. Bhd. (registered landowner)
- Who is the lessee? XYZ Sdn. Bhd.
✅ In this case, it is correct to refer to the document as a “Lease Agreement”.
✅ For registration, the solicitors in charge must use Form L – Memorandum of Sublease, of the Sarawak Land Code (Cap. 81).
✅ In the event of any irrevocable POA being appointed and registered by the ABC Sdn. Bhd. for such leased land, such registered irrevocable POA’s party (for eg. GHI Sdn. Bhd.) can sign the Lease Agreement and Form L on behalf of ABC Sdn. Bhd. (if GHI Sdn. Bhd. is explicitly allowed so in the registered POA), while maintaining the lessor’s name as ABC Sdn. Bhd. in such documents/instruments.
The following are the general procedures on registering the Memorandum of Sublease (Form L) with the Land and Survey Department of Sarawak:
- Consent from Director of Land and Survey Department of Sarawak: If applicable
- Execution of Lease Agreement: Must be signed and stamped.
- Preparation of Form L – Memorandum of Sublease: As prescribed by the Sarawak Land Code (Cap. 81).
- Submission to Land and Survey Office: Along with supporting documents such as:
- Original title
- Stamped lease agreement
- Identification documents of parties
- Payment of prescribed fees
- Other required documentation (Section 18 if any, etc)
- Registration and Endorsement: Upon approval, the lease will be duly recorded in the Registry of Land and Survey Department of Sarawak.
The registration process may vary slightly depending on the type of title (e.g., Native Title, Lease of State Land) and location within Sarawak.
Conclusion
Lease arrangements in Sarawak are a common means of facilitating land use and development, but they must comply with the requirements of the Sarawak Land Code (Cap. 81). A well-drafted lease agreement is vital to avoid disputes, and the registration of the Form L – Memorandum of Sublease is essential to secure the rights of the lessee.
As land laws in Sarawak are state-specific and can be complex, parties entering into lease / sublease arrangements are strongly advised to consult with legal professionals familiar with Sarawak land administration to ensure proper compliance and protection of interests.
