Planning and compensation practices in Peninsular Malaysia are governed by several acts and involve consideration of land value and other losses. Local planning is guided by structure plans at the state level and local plans that determine allowable land uses. New local plans can impact alienated lands by upgrading or downzoning uses, with implications for compensation. The Town and Country Planning Act provides for compensation resulting from planning controls like purchase notices or declarations of development areas. The National Heritage Act also addresses compensation for heritage preservation actions. New compensatory tools proposed include transferable development rights to mitigate losses from land preservation and compensation for adjacent lands affected by public works projects.

1. PLANNING AND COMPENSATION
AT LOCAL PLANNING IN
PENINSULAR MALAYSIA
Conference on Urban Planning and
Management in Malaysia; Accomplishments,
Challenges and Way Forward
8 November, 2012
Organised by Malaysian Institute of Planners & Partnering Universities
Paper Presenter: MOHD ANUAR A. WAHAB
anuarhab@yahoo.com

2. Contents
 Introduction
 Purposes of Compulsory Land Acquisition
 Compensation Consideration – Land value and other losses
 Statutory Development Plan System at the Local Level
 Impact of New Local Plans on Alienated Lands –Planning Outcomes ,
Reviews and Implications
 Planning Control, Adversity and Compensation under Town and Country
Planning Act 1976 (Act 172) & Act 267
 Preservation, Conservation Action Impacting Compensation Under The
National Heritage Act 2005 (Act 645)
 Planning Action Impacting Compensation in Land Acquisition Act
 New Compensatory Tools for Consideration
 Conclusions

3. Introduction
 Aspects of compensation
 Legal powers
 Outright compulsory acquisition
for whole or part of land
 Acquisition for way-leave or
easement right
 Affected interests in land
excluding tenant at will, squatters
and encroachers
 Adjacent lands not linked to the
acquired lands are not
compensated
Sources
Forward Planning,
Control and
Implementation
Mitigation Strategy
Curative Measure
Balancing Act-
Private Interest &
Public Interest

4. Purposes of Compulsory Land
Acquisition
 3(1)a Public Purpose
 All alienated lands can be
acquired for public
purposes
 Public purpose are broad
and defined by case law
 3(1)b & 3(1)c for utility,
economic and other uses
(mining, residential, agricultural,
commercial, industrial,
recreational)
 Alienated lands granted/with
benefit of development
approval not permitted to be
acquired under these
headings except for public
utility
 Landowners given
opportunity to participate in
the project
Principal Statute: Land Acquisition Act 1960
(Act 486)

5. Compensation Consideration
Principles of
Compensation
Equivalence
Equity
Highest and Best Use
and Value to the
Owner
Legality

6. Zoninghigherorder
useatmaterialdate
Approved
Development
Construction
Completed
Time/
Years
NBUV
EUV
RUV 1
RUV 2
RUV 3
COMPENSATION FOR LAND VALUEMarket Value RM
``
EUV : Existing Use Value
RUV : Redevelopment
Use Value
NBUV : Non Beneficial
Use Value
Under the Land Acquisition Act 1960 (as amended), compensation for
land value could be on the basis of EUV, RUV, or
NBUV as planning is material consideration. Under Town
& Country Planning Act 1976 (as amended), acquired under purchase notice
(adverse planning) land value should be EUV or RUV. NBUV to be ignored

7. `Land Taken`
Compensation for Other Losses
Set off for Betterment
Severance Loss
Injurious Affection Loss
Removal Costs
Accommodation Works
Ex Gratia (outside legal provision)
Before Compulsory Acquisition After Compulsory Acquisition Injurious
affection/removal
cost
Severance Loss
Severance loss
Betterment

8. Statutory Development Plan System
at the Local Level
• National Physical Plan
• National Policies and Strategic Concerns1
• State Structure Plans, Regional Plans
• State Policies and Strategic Concerns2
• District Local Plans, Special Area Plans
• Local planning and control, detailed
planning, concerns and guidelines
• Local planning implementation &
instruments
3

9. Status of District Local Plan Coverage 2011
Land (National Land Code
1965, State Land
Rules)
Planning (Town and
Country Planning
Act 1976, Federal
Territory (Planning)
Act 1982 and
Rules)
Building and Infrastructure
(Street, Building
Drainage Act 1974,
Uniform Building
By Law)
Impact, Management and
Other Controls e.g.
EQA, National
Heritage Act 2005
etc
(EIA, TIA, RSA, SIA)
DEVELOPMENT
CONTROL

10. Impact of New Local Plans on Alienated
Lands – Planning Outcomes, Reviews and
Implications
 Upgrading to a more valuable land use
 Variations in the planning details.
 Sustaining the status quo
 Downzoning the land use to be less
valuable
 Downzoning the land use to a public use,
that is non beneficial to the landowner
and with nominal private value
 The impacts of allowable land
uses/developments on
adjoining/adjacent lands.
EXTENSION OF
DEVELOPMENT
AREAS
RENEWAL OR IN
FILL OF AREAS
INCREASING
DENSITY OR
INTENSITY OF
DEVELOPMENT
AREAS
ESTABLISHMENT
OF NEW OR LEAP
FROG
DEVELOPMENT
AREAS
PRESERVATION
OR
CONSERVATION
OF AREAS
Development Right
Development/Redevelopment
Value

11. Planning Control, Adversity and
Compensation under Town and Country
Planning Act 1976 (Act 172) & Act 267
PLANNING CONTROL & ADVERSITY
 Compensation for Requisition Notice
 Preservation and Conservation
 Compensation for Declaration of Development
Areas
 Compensation for Tree Preservation Order
 Compensation for non beneficial use-Purchase
Notice
 Lands for public use and reserves

13. Preservation, Conservation Action Impacting
Compensation Under The National Heritage Act
2005 (Act 645)
 Alienated site of natural and cultural heritage including buffer
areas (200 metres) as heritage site and listing under the National
Heritage Register
 Compensation for damages due to site entry and investigations
 Compensation for purchase or lease
 Compensation for compulsory acquisition
 Compensation for arrangements-costs of works and damages
If site under conservation zoning or heritage site listing, the effect
must be considered when acquired for the intended heritage site or
buffer area

14. Planning Action Impacting
Compensation in Land Acquisition Act
Market Value- Existing Use
 Land owner worse off for
land subject to adverse
planning
Market Value- Development Use
 Landowner gets full
potential value loss if
acquisition consequence to
Purchase Notice (TCPA 76)
Concept of market value –tied to
principles of market economics. Should
this be varied for lands significantly
valued by the community -to
compensate based on measured
community value (more than the
measure of market value)?

15. New Compensatory Tools For
Consideration
Transferable Development Rights
 Mitigate loss due to dictation for land
preservation and conservation
 To cover loss in development
/redevelopment right value
 Trading of development right value
and shifting this right for
implementation to another location
 Lower price to be paid compared to
purchase notice
 No monetary compensation to be
incurred by LPA
 Landowners acceptance for planning
adversity losses are covered/retaining
land ownership
Adjacent Land Right to Compensation
 Extension of recognition for
compensation of lands not connected
with the compulsory acquisition
 Compensation to lands injuriously
affected by public works/operation on
scheduled land e.g. causing blight,
significant uncommon effect.
 Paradigm shift in recognition of this
compensation
 Holistic look into ex gratia
compensation

17. Conclusions
 Limitation and Participation in Compulsory Land
Acquisition
 Loss of Development Right through the Use of the Land
 Loss Due to Injurious Affection Limiting the Value of the
Development Right
 Injury Loss to Adjacent Lands and Ex Gratia
Compensation
 Streamlining the Appeal
 Shortcomings provide uncertainty and difficult choices to
planners and implementers
 There is need to have administrative and political will in
extending compensatory devices

18. THANK YOU
Questions are welcome