Is Freehold really free to hold? A look at Singapore’s land rights and legislations

The short answer is a no – Because of the Land Acquisition Act that allows the State to acquire land for public or certain specific purposes. There have been challenges to reverse or to seek for a higher compensation – so here examine the history, case studies and some probable improvement that can be made. This article piece is an individual assignment for my Masters in Real Estate Programme. 

Introduction

The Land Acquisition Act in Singapore can be traced back to 1857. Since then, we have evolved from a sparsely populated British Colony to a high-density cosmopolitan City State. With these changes, Freehold land/property which are perceived by landowners to be able to hold forever became a treasured possession as the Government’s Land Sale are on leasehold tenure.

As our Nation and Public’s needs will continue to change, I would like to examine the historical needs for the Land Acquisition Act in Singapore, some legal cases that came before the Singapore Court and the difficulties faced before sharing what are some potential ways to fine-tune the Act for a fairer outcome especially for the Freehold landowners.  

History of the Land Acquisition Act in Singapore

We can look back at this Act which begins in 1857 when Singapore was governed by the East India Company. The Indian Act VI by the Legislative Council of India which covers Singapore along with the rest of the Straits Settlements will have the condition inserted on any grant or lease of Land to its subject that the land could be acquired should there be a need for public works like roads, canal and railways.[1] However, this was drafted without a clear guideline on how land valuations and the landowners’ right to compensation were determined. The Act was updated in 1870 to include factors in determining compensation which formed the foundation for the Straits Settlement Ordinance No VI in 1890.[2]

In 1955, when the Government’s focus was to acquire land for new towns and flats to be built, an Ordinance was passed whereby compensation for the acquired land was benchmark based on the value of the properties of a statutory date 22 April 1955.[3]

This was amended further in 1959 when Singapore attained self-government and upon review by a Select Committee, which was then replaced by the Land Acquisition Act in 1966. The focus at that time after a year from Singapore’s independence, is to develop public infrastructure rapidly for the Public which was financially heavy during its Nation-building years.[4] The focus of compensation was that the landowners who were mostly a small group of individuals was not to benefit from the development which has taken place using public funds and that the compensation should not exceed the valuation of the land before the government develop the area. Additionally, the compensation will be based on whichever value was based on the lower – either the date of when the land was gazetted or the statutory date. Amendments were made in the 1970s to consolidate and fine-tune this principle.

Noting the huge discrepancy of prevailing market value and that as of the stated statutory date, it was mitigated by adjusting the statutory dates through the years with the duration between each amendment being shortened to reflect the fast-moving property prices.[5] The government was also mindful that if the wider public’s interest was affected such as in 1995, they only acquired a land size of 17.5ha in Woodlands two weeks after the amendment to the statutory date. Should the acquisition happened before the amendment, the landowners which were public-listed who bought the land in 1993, 1994, 1995 would likely have suffered a huge loss and along with it, the Public who had invested in them would be greatly affected as well.[6]

There were no major changes from 1995 to 2007, as property prices had dropped significantly due to the 1997 Asian Financial Crisis as well as the Severe Acute Respiratory Syndrome (“SARS”) in 2003 henceforth the owners were compensated based on the prevailing market value which was lowered than that at the statutory date.[7]

A major change happened in 2007 where from 12 February 2007, compensation will be based on prevailing market value a willing purchaser would pay as at the date when the land is acquired. This was undertaken as a recognition that much of land are now owned by the Public as compared to the 1970s or 1980s. Provisions that were obsoleted such as “fire site’’, ‘burial ground”, “2-year-rule” and “7-year-rule” were repealed.[8]

In 2014 “better levy” (which for some cases resulting in $1 compensation previously such as Chuan Park Condominium[9]) where increment in value due to developments in the area of the acquired had to be taken off the final compensation was removed. On top of that, the amendment also allowed the Management Corporation of Strata-titled developments to represent individual unit owners when the common property is acquired – this minimised inconvenience to individual unit owners and accelerate the process of acquisition and compensation.[10]

Legal Challenges

Through the years, there were several legal challenges towards the Land Acquisition Act that were brought to court contesting on the selection of land acquisition, the motive as well as the compensation. 

In the case of Jin Long Si Temple, several devotees felt it was not fair that their site was acquired but not that of two other religion-affiliated land nearby. It went all the way to the Court of Appeals, where decision in High Court which found that the devotees did not locus standi to bring the action and that they were guilty of inordinate delay were reversed. [11]  However the decision that the authorities did not act in violation of Articles 12(1) of the Constitution of the Republic of Singapore stood and the land was acquired. A positive outcome for the devotees could pose challenge for the government in acquiring land in the future as landowners could evoke the Constitution to prevent their land from acquired.  

In the case of Teng Fuh Holdings Pte Ltd, the appellants attempted to quash the Land Acquisition as the State did not redevelop the land twenty-three years after acquisition. Even though the Court of Appeal felt that “a reasonable argument could have been made”, the application was dismissed as it should be made within six months from 26 February 1983 where the land was acquired.[12] Here, the difficulty lies that there is a fixed timeline for application, while at the same time being mindful of many other factors that could have hinder the Government from carrying out the redevelopment plans.

In the case of Ng Boo Tan, the argument was that the road widening line has caused a depreciation of value as the compensation were derived from transactions that were also impacted by Road line Plan.[13] This was also dismissed as firstly negative Pointe Gourde was not explicitly stated in the Land Acquisition Act and that basis of how the valuation had been derived was fair.[14] A positive outcome for appellant and/or negative Pointe Gourde were in the compensation could result in landowners seeking compensations even if their land were not acquired if the value of their land declined due to zoning/rezoning set upon by the government.

Potential fairer outcome for Freehold owners

With the Land Transport Masterplan 2040 which will explore additional MRT lines[15], the Population White Paper that projected a population of 6.9mil by 2030[16] as well as grappling the impact of Climate Change, it is inevitable that more land acquisition will take place with more people impacted. Below are some of the potential fine-tune that I would like to suggest:

1. Social Impact Assessment and proactive engagement to stakeholders

A pre-acquisition social impact assessment could be conducted should several criteria be met (e.g. if the land acquired is of certain size and/or usage) similar to what India has instituted as part of their Land Acquisition Act could be introduced.[17] This study could be made easily available to the Public as well as active engagement to the various stakeholders beyond just the legal owners to highlight all the due considerations both the positive and negative as well as the rationale behind the acquisition. This could be important as it ensures correct, accurate information in the era where online falsehood and misinformation are rampant.

2. Principle of compensation

The principle for compensation could mirror that in the Land Titles (Strata) Act which states that a proprietor “shall be taken to have incurred a financial loss if the proceeds of sale for his flat, after any deduction allowed by the General Division of the High Court, are less than the price he paid for his flat”.[18] This principle could form the foundation for any potential compensation or appeal to the appeal board.

3. 5-years window period for future claims for compensation for Freehold properties

In a scenario of the Freehold Thomson 800 condo[19], where only part of the land was acquired, there could be differing impact on individual units especially if the Land Acquisition brought undesirable factors such as noise (closer to road, removal of trees), smell (relocation of bin centre).  Again, this could run in tandem with the principle of compensation highlighted above.

Referencing to the Teng Fuh Holdings Pte Ltd case, unhappiness could arise if the land but did not redevelop it while the value of the land might continue to rise during that period and the aggravation could be worsen if rent were charged to the landowner.[20] However, at the same time, it might not be reasonable to expect the Government to redevelop all land acquired immediately especially if there would be changes to the Nation’s priority such crisis and/or pandemic.[21] I would feel 5-year would be a good timeline for affected landowners to either file for quashing order and/or further compensation if the land is left undeveloped instead of 6-month as highlighted in the case. 5-year also mirrored the time as with Stamp Duties Act where Developers (in this case, the State) would not get their ABSD remission if they did not complete the construction after 5 years from when they bought the land.[22]
4. Availability of underground data and other information that could affect valuation

Currently, Road Line plan/Railway Protection Plan in Integrated Land Information Service (INLIS), land usage and plot ratio in the URA Masterplan are made available to the Public so that potential buyers/sellers will take into them into account when transacting these properties. The structural foundation as well as the underground information including soil/clay condition, potential future usage (acknowledging that URA has signalled this intend)[23] can be made available for public access. This will allow buyer to make a more informed decisions (if there are potential risk of similar acquisition as in the case of Hock Kee House[24] and 68-74 Thomson Road[25] should future developments occur) and in turn allow market value to be adjusted on a “Willing seller, Willing buyer” taking the above into account especially for Freehold land/properties which generally has a premium over leasehold land/properties.

Conclusion

Here we have examined how the Land Acquisition Act has evolved with time. While various legal challenges had been filed, the outcome were not favourable to the appellants due to various implications that they might create for future land acquisition by the Government. The suggestions might not prevent all landowners especially Freehold one to feel any sense of unfairness but it might provide critical information for their property decision, their (including the stakeholders) interest are being considered and they were given time to seek rectification should they wish to seek it.

ANNEX

Statues

1. Land Acquisition Act
2. Land Title (Strata) Act
3. Stamp Duties Act
4. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (India) Act

Case Law

1. Eng Foong Ho v Attorney-General [2009]
2. Teng Fuh Holdings Pte Ltd v Collector of Land Revenue (2007)
3. Ng Boo Tan v Collector of Land Revenue [2002]
4. The Management Corporation Strata Title Plan No. 2504 And Collector of Land Revnue, Appeals Board (2014)

Articles/Journals

1. Bryan C, Vincent H, Lee Koon T, Manimegalai V, (2010), Complusory Acquisition of Land in Singapore, A Fair Regime?
2. Feily S, Are you compensated fairly in land acquisition?, (2017), https://www.edgeprop.sg/property-news/are-you-compensated-fairly-land-acquisition
3. Joo, L. C. (1968). COMPULSORY LAND ACQUISITION IN SINGAPORE. Malaya Law Review, 10(1), 1–28.
4. Wendy T, Arlina A, 18 June 2003, The Straits Time, $1 – That’s how much land big enough for 17 carparks is worth
5. Ryan J, 4 important lessons from the Thomson Road Building Demolition. Yes, It’s about En-bloc, (2021) https://stackedhomes.com/editorial/4-important-lessons-from-the-thomson-road-building-demolition/#gs.colpgp

Others

1. Land Transport Masterplan 2040
2. Population White Paper 2013
3. Arup, URA, (2018) Underground Development – A benchmarking study to explore international best practices in underground space management

[1] Ng Boo Tan v Collector of Land Revenue [2002] 4 SLR 495 at [17].

[2] Ng Boo Tan v Collector of Land Revenue [2002] 4 SLR 495 at [18].

[3] Land Acquisition Ordinance (Cap 248, 1955 Rev Ed), as amended by Land Acquisition (Amendment) Ordinance, 1964 (No 1 of 1964).

[4][4] N Khublall, Compulsory Land Acquisition – Singapore and Malaysia (Butterworths, 2nd Ed, 1994) at p 11.

[5] Singapore Parliamentary Debates, Official Report (26 February 1993) vol 60 at col 536 (Prof S Jayakumar, Minister for Law).

[6] Tan Kim Song, “Wafer fabrication park in Woodlands to get more land”, The Straits Times (14 October 1995).

[7] Singapore Parliamentary Debates, Official Report (15 August 2003) vol 76 at col 2459 (Assoc Prof Ho Peng Kee, Senior Minister of State for Law).

[8] Singapore Parliamentary Debates, Official Report (11 April 2007) vol 83 at col 500 (Prof S Jayakumar, Deputy Prime Minister and Minister for Law).

[9] Arlina Arshad & Wendy Tan, “$1 – That’s how much land big enough for 17 carparks is worth”, The Straits Times (18 June 2003)

[10] Singapore Parliamentary Speeches, (05 August 2004) Second Reading Speech by Senior Minister of State for Law, Indranee Rajah SC, on the Land Acquisition (Amendment) Bill

[11] Eng Foong Ho v Attorney-General [2009] 2 SLR 542.

[12] Teng Fuh Holdings Pte Ltd v Collector of Land Revenue [2007] 2 SLR 568 at [41]

[13] Ng Boo Tan v Collector of Land Revenue [2002] 4 SLR 495 at [18].

[14] Ng Boo Tan v Collector of Land Revenue [2002] 4 SLR 495 at [5].

[15] Land Transport Masterplan 2040 pg 17

[16] Population White Paper 2013 Executive Summary Pg 7

[17] Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Social Impact Assessment and Consent) Rules, 2014

[18] Land Title (Strata) Act. Section 84D Subsection 5(a)

[19] The Management Corporation Strata Title Plan No. 2504  And The Collector of Land Revenue (2012) Land Acquisition Act Appeal Board

[20] Teng Fuh Holdings Pte Ltd v Collector of Land Revenue (2007) 2 SLR 568

[21] Singapore Parliamentary Debates, Official Report (11 April 2007) vol 83 at col 376 (Prof S Jayakumar, Deputy Prime Minister and Minister for Law).

[22] Stamp Duties Act (Remission of ABSD) Rules 2013 Sect 3 (2) (c)

[23] https://www.ura.gov.sg/Corporate/Get-Involved/Plan-Our-Future-SG/Innovative-Urban-Solutions/Underground-space

[24] https://www.sla.gov.sg/articles/press-releases/2005/joint-press-release-by-lta-bca-and-sla-on-hock-kee-house

[25] https://stackedhomes.com/editorial/4-important-lessons-from-the-thomson-road-building-demolition/#gs.clz2a0