PA deeds to be converted into 60-year leases

Sunday, March 11, 2012

THE government's move to convert all property owned through power of attorney (PA) into temporary leases is aimed at increasing transparency in land ownership but PA will still be allowed in certain cases, said the Minister of Development yesterday.

In an interview with The Brunei Times, Yang Berhormat Pehin Orang Kaya Indera Pahlawan Dato Seri Setia Hj Suyoi Hj Osman explained that with the new regulations, all 47,000 deeds issued through PA will be converted to 60-year leases that must be registered with the Land Department. Previously, land and property deeds issued through PA were not required to be registered with the Department.

"A lease is more transparent. Ownership is very clear for the span of 60 years that they will own the land," said the minister on the sidelines of a meeting for the Eighth session of the Legislative Council (LegCo). "(Our objective) is more transparency. Anytime we can prevent the transfer of (land) to people who are not entitled to own these lands."

The move, announced on Thursday during a LegCo meeting, predominantly affects permanent residents and foreign investors who have used PA to purchase assets such as housing or land. Under Brunei law, only citizens are eligible to own land outright. PA is a written authorisation for an attorney to act on a person's behalf in private or business affairs.

The minister rebuffed suggestions that the new policy would deter foreign investment in Brunei, saying the 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.

The announcement of the new regulation, which closes a legal loophole for non-Bruneians to buy land, has caused a stir amongst the community and members of LegCo.

During yesterday's meeting of LegCo, YB Hj Ahmad Morshidi Pehin Orang Kaya Digadong Seri Diraja Dato Laila Utama Hj Abdul Rahman raised the issue of PA once again:

"On the issue of buying and selling property, most land owners who wish to sell their land choose their payment to be settled by a Memorandum of Transfer (MOT). If the PA is terminated, are there other ways to secure the purchase of property so that brokers will not use the settled payment, even though the request of ownership was not approved?" he asked.

The Minister of Development responded by saying full payment can be settled prior to the end of the 60-year lease or at the term's end, and the PA-issued deed can also be used as collateral with banks.

The decision to convert PAs into leases was made on October 1, 2011 after discussions between the Ministry of Development and the Attorney General's Chambers. Amendments to the Land Code are currently being drafted in order to enforce the policy. The Brunei Times