A comparative analysis of assurance fund vis-à-vis title insurance: which offers better compensation for victims of land disputes in Malaysia?

ABSTRACT

Land transactions are fraught with risk because of the nuances of property law and conveyancing practices, as well as skyrocketing land prices. This is demonstrated by the frequent occurrences of land title disputes which often leads to unsatisfactory litigation consequences for landowners. However, some landowners may be able to seek compensation through title insurance or assurance funds. This article explores the differences between assurance funds and title insurance by analysing the benefits and weaknesses of both as implemented in various jurisdictions. This research is critical for developing countries, such as Malaysia which is currently considering implementing a practical and effective scheme, to serve as a buffer against land-related litigation.

KEYWORDS:

• Assurance fund
• compensation
• land administration
• title insurance
• torrens

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are openly available in figshare at https://doi.org/10.6084/m9.figshare.14451681.v1.

Notes

1. Boonsom Bonyanit v Adorna Properties Sdn Bhd [1990] 3 MLJ 444.

2. Adorna Properties Sdn Bhd v Boonsom Boonyanit [2001] 1 MLJ 241.

3. Tan Ying Hong v Tan Sian Sang [2010] 2 MLJ 1.

4. Section 131(2) of the Real Property Act 1900 No 25 [NSW].

5. Section 129(2)(f)(i) of the Real Property Act 1900 No 25 [NSW].

6. Public Bank Bhd v Pengarah Tanah dan Galian & Anor [1990] 2 MLJ 510.

7. Se Ching Thian and Ors v Maybank Berhad and Ors [2011] MLJU 62.

8. Pemungut Hasil Tanah, Kota Tinggi v United Malayan Banking Corp Bhd [1981] 2 MLJ 264.

9. For example, see – Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd (2003) 59 NSWLR 452.

10. Section 156 (5) of the Land Titles Act.

11. Section 151 (2) of the Land Titles Act.

12. Section 151 (3) of the Land Titles Act.

13. (57 Pa. 161).

14. Kinski v. Archway Motel 21 Wn. App. 555 (Wash. Ct. App. 1978)

15. Federal Deposit Insurance Corporation v. The Mortgage Zone, Inc. (E.D.N.Y., Oct. 12. 2010).

16. Philadelphia Indemnity Insurance Company v. Chicago Title Insurance Company, 771 F.3d 391 (7th Cir. 2014).

17. Section 129(1)(f) of the Real Property Act 1900 No 25. [NSW].

18. See for example – Richard Malanjum CJ’s judgment in Pushpaleela a/p R Selvarajah & Anor v Rajamani d/o Meyappa Chettiar and other appeals [2019] 2 MLJ 553.

19. See Leong Chye @ Sze Leong Chye & Anor v United Overseas Bank (Malaysia) Bhd and another appeal [2021] MLJU 739.

Additional information

Funding

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.