Sabah Land Ordinance: Native Title & Land Tenure

What the Sabah Land Ordinance is

Land in Sabah is governed by the Sabah Land Ordinance (Cap. 68), a body of law that stands completely apart from the National Land Code that applies to Peninsular Malaysia. Where most of the country shares a single, federal land code, Sabah administers its own land system with its own categories, its own registers and its own rules about who can own what. This is one of the clearest examples of how land tenure in Sabah simply does not map onto the rest of Malaysia.

The practical effect is that the words you might use to describe land elsewhere in Malaysia do not always carry over. Sabah has tenure categories — most notably Native Title and Native Customary Rights — that exist to recognise the position of Sabah natives, alongside more familiar leasehold arrangements for everyone else. Understanding which category a piece of land falls under is the first thing any buyer, occupier or heir needs to establish, because the category shapes how the land can be used, transferred and inherited.

Land tenure categories

The Sabah Land Ordinance recognises several distinct categories of land tenure. Each one answers a different question about how land is held and by whom. The main categories are:

• Native Title (NT) — title to native land under Part IV, recorded in the district Native Title Register. Non-natives may not buy it except with the Minister's written permission (s.64 and s.17).
• Native Customary Rights (NCR) — rights to land defined in section 15, such as customary tenure, fruit-tree land, recent cultivation, burial grounds and shrines.
• Country Lease — a lease of up to 99 years over country land outside declared town boundaries (Part II, s.48). Land alienated under Part II may be used only for agricultural purposes unless the Minister permits otherwise (s.54).
• Town Lease — a lease of up to 99 years over Town Land inside declared town boundaries, normally alienated by public auction (Part III, ss.55 and 57).
• State Land — land not reserved for a public purpose and not leased, granted or lawfully occupied, including forfeited or surrendered land (s.4).

Section numbers are from the consolidated Land Ordinance (Cap. 68) published by the State Attorney-General's Chambers (checked 7 October 2026).

These categories are not interchangeable. A plot held under Native Title behaves very differently from one held under Country Lease, especially when it comes to who may acquire it. Knowing the category tells you, at a glance, whether land is reserved for natives, available to companies, or still in the hands of the state.

Native Title and Native Customary Rights

Native Title (NT) is title to native land under Part IV of the Ordinance. Customary tenure confers a permanent, heritable and transferable right of use and occupancy (s.66), and a Register of Native Titles is kept in each district (s.67). Part IV applies only to land held by natives, and no non-native may buy such land or take a charge over it except under section 17 (s.64). Section 17 forbids dealings in land between natives and non-natives without the Minister's written permission. On a holder's death, succession is decided under the Administration of Native and Small Estates Ordinance (s.74) (Land Ordinance (Cap. 68), checked 7 October 2026).

Native Customary Rights (NCR) address a different situation. Section 15 defines them as land possessed by customary tenure; land planted with fruit trees numbering 50 or more per hectare; isolated fruit trees, sago, rotan or other useful plants the claimant planted or kept up; grazing land kept stocked; land cultivated or built on within three years; burial grounds or shrines; and usual rights of way to any of these. Under section 16, established NCR are dealt with by money compensation or by a grant of title under Part IV (Land Ordinance (Cap. 68), checked 7 October 2026). NCR is a recognised category under Sabah law, and questions about the extent and recognition of NCR are the subject of ongoing legal cases heard in Sabah's courts. The key point for general readers is simply that NCR is a real, recognised form of right under the Ordinance, distinct from formal Native Title, and that disputes over it are resolved through the legal system rather than informally.

NCR land in the national plans: the 13th Malaysia Plan reports that, as at June 2025, 68,765 hectares of NCR land had been surveyed for income-generating activities, involving 36,368 beneficiaries. For 2026–2030, under a strategy for Anak Negeri Sabah and Bumiputera Sarawak, it promises NCR land survey, gazettement and issuance of titles; commercial premises and access to financing for business; and a state-level integrated economic framework and action plan (13th Malaysia Plan, pp.3-17 and 3-19 to 3-20). For the sections of the Ordinance that define NCR, and what the plan means for landowners, see NCR land and the Anak Negeri Sabah strategy.

Country Lease, Town Lease and State Land

For land held by non-natives and companies, the Ordinance provides leasehold categories. A Country Lease is granted over country land, meaning land outside the boundaries of a declared town, for up to 99 years (s.48). Land alienated under Part II may be used only for agricultural purposes unless the Minister gives permission and sets new terms (s.54). It is the usual route by which non-natives and companies hold rural or suburban land. A Town Lease applies to Town Land inside declared town boundaries. Town Land is normally alienated by public auction unless the Cabinet authorises otherwise (s.55), and each Town Lease runs for up to 99 years (s.57). Both are leases rather than native title, which is what allows them to be held by parties who are not Sabah natives.

Behind these private holdings sits State Land: land not reserved for a public purpose and not leased, granted or lawfully occupied, including land forfeited for breach of conditions or surrendered to the Government (s.4). State Land is the pool from which new alienations are made, and it remains under the control of the state until it is formally granted out under one of the Ordinance's categories. Together, these leasehold and state categories sit alongside Native Title and NCR to make up Sabah's complete tenure picture.

Native courts and customary matters

Closely related to native land is Sabah's system of native courts, set up under the Native Courts Enactment 1992. Native Courts hear breaches of native law or custom where all parties are natives, and native law cases on betrothal, marriage, divorce, adoption, guardianship, custody, maintenance and succession (s.6). They have no jurisdiction over matters belonging to the Syariah or civil courts (s.9) (Native Courts Enactment 1992, checked 7 October 2026). They give Sabah's indigenous communities — Kadazan-Dusun, Bajau, Murut and others — a way to resolve family and customary matters under their own adat rather than only through the general courts.

Under the 1992 Enactment the courts form three tiers: the Native Court, chaired by a District Chief; the District Native Court, chaired by the District Officer; and the Native Court of Appeal, chaired by a Judge (ss.3 to 5). In July 2026 the State Assembly passed the Native Courts Bill 2026, which replaces the 1992 Enactment with a District Native Court, a High Native Court and a Native Court of Appeal, to be brought in gradually, with existing cases continuing under the old law (Malay Mail, checked 7 October 2026). This structure means customary disputes have a recognised path through the system, with appeals possible, while remaining grounded in adat. Because inheritance under adat can directly affect native land, the native courts and the Land Ordinance often touch on the same families and the same plots.

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