State Lands Act & LBC
Implied Covenants · LBC · TOL · Road Reserves · Encroachment · Reversionary Interest · Compulsory Acquisition
1Implied Covenants & Conditions — Quick Reference
Already covered in P1-04 → Introduction to Land Law covers the full S.6 covenants (rent, landmarks, no burial, no assignment >7yr) and S.7 conditions (10% royalty, right to take materials, right of free access, forfeiture). Review P1-04 Section 6 for the complete list.
Two additional points from §1.6.1 that are testable:
⛏ Mineral Oil Reservation
In every SLG and State lease after 3 May 1907, the State reserves the right to enter the land to search for and extract mineral oil. If any is found and taken, the grantee or lessee is compensated for damages assessed by the Collector of Land Revenue.
🛣 Right of Way Reservation
The State reserves the right to mark out a road or way over the grantee's land to facilitate the Collector's access to the nearest public road. The owner bears the expense of making and maintaining any road so marked. Disputes are settled by the Collector of Land Revenue, whose decision is final.
📋 Assignee Bound Regardless of Notice
Any person who becomes a proprietor of land in Singapore is bound by the State's exceptions, reservations or covenants in the State grant or lease — regardless of whether they had actual or constructive notice. This applies to all grants and leases issued before, on or after 15 January 1981.
2Land Betterment Charge (LBC)
LBC is a tax on the increase in land value arising from a chargeable consent (e.g. planning permission) given in relation to the development of any land. It replaced Differential Premium (DP) and Development Charge (DC), effective 1 August 2022.
💰 When is LBC Payable?
When planning approval is obtained for a proposed development where the approved use and/or intensity exceeds that stated in the State Title (e.g. developing at higher plot ratio than originally allowed)
When a residential State lease is topped up (“Land Premium”) to the full term of 99 years — ABSD is also applicable on the top-up premium
📋 LBC Process
- Developer submits planning application or plan lodgement to URA
- If development increases land value, SLA issues a Liability Order (LO) stating LBC payable
- Payment to SLA within 1 month from date of LO
- No separate SLA application needed — SLA follows up directly once URA approves
📊 How LBC is Computed
LBC = Post-chargeable valuation minus Pre-chargeable valuation
- Post-chargeable: value based on proposed use/intensity in URA planning permission
- Pre-chargeable: value based on restrictive covenants in State title / last authorised development
- Computed using LBC Table of Rates — revised on 1 March & 1 September each year
3Temporary Occupation Licence (TOL)
A TOL is a licence issued by statutory boards (HDB, URA, SLA) for the temporary occupation of State land. It is NOT a lease — it gives personal permission without any interest in land.
🔄 Renewable TOL
Max 10 years per term (wef 18 Feb 2021)
For recurring uses:
- • Worksites & site offices
- • Signage & showflats
- • Temporary carparks & landscaping
- • Overhead bridges & underpasses (air/subterranean space)
- • Concrete batching plants & storage
❌ Non-Renewable TOL
Max 3 months · One-off events only
For one-off events (fixed duration):
- • Trade fairs & expositions
- • Night markets (Pasar Malam)
- • Chinese 7th month wayang
- • Mini fairs & carnivals
- • Can apply on a weekly basis
📋 Key TOL Conditions
- TOL cannot be assigned without written consent
- TOL ceases on death of the licensee
- Licensee cannot sublet except with written consent
- No permanent building or structure without prior written permission
- Licence fee payable before the licence is issued
- Regularisation of minor encroachments: annual fee long quoted at S$120 in industry references (brokerage materials). The SLA TOL Rate Table is reviewed periodically (latest update 1 April 2026) — verify the prevailing rate at sla.gov.sg before quoting clients.
4Reversionary Interest in State Leases
The State holds a reversionary interest throughout every State lease. At expiry, land returns to the State. But there are also four ways State land can revert before lease expiry:
| Scenario | Trigger | Outcome |
|---|---|---|
| Expiry (normal) | State lease term ends | Land reverts to State |
| Re-entry & Forfeiture | Breach of S.6/S.7 covenants | Collector of Land Revenue re-enters; lease forfeited |
| Abandonment | Grantee/lessee abandons land for 3+ years | Land automatically reverts to State |
| Unauthorized Use | Land granted for religious/charitable purposes used for other purposes without written consent of President | Land forfeited and vested in Government |
⚠ Exam note: Abandonment = 3 years
The 3-year abandonment rule applies to both the original grantee/lessee AND their successors. Once land has been abandoned for 3 years or more, the State may reclaim it. There is no warning notice required.
5Compulsory Acquisition of Land
The government has the power to compulsorily acquire land under the Land Acquisition Act. Since independence, more than 15,000 land parcels have been acquired — mostly for MRT, drainage, road widening, and urban redevelopment. Cabinet approves every single acquisition request.
💵 Statutory Compensation
Based on Open Market Value (OMV) — since 12 Feb 2007
Compensation is based on the Open Market Value (OMV) — what a willing purchaser would pay as at the date of gazette. This includes the value of the land's permitted use under the Master Plan (subject to density requirements, restrictive covenants, and Planning Act restrictions).
Before 2007 vs After 2007:
Before: Warehouse on commercially-zoned land → compensated at warehouse value (current use)
After: Same warehouse → compensated at OMV reflecting commercial zoning potential
📦 Additional Compensation
- • Reasonable moving expenses
- • Stamp & legal fees for replacement property (if business continues at new location)
- • No removal expenses if business discontinued after acquisition
- • Tenants with long leases or who improved property may file separate claims
🎁 Ex Gratia Payments
- • 1982: introduced for displaced homeowners (1 property only)
- • 1996: extended to shop house owners
- • 2001: extended to ALL property types; no cap on amount
- • Today: case-by-case for severe hardship (e.g. negative equity)
⚖ Appeals Board
A person dissatisfied with the statutory compensation awarded may appeal to the Appeals Board (Land Acquisition). This is the statutory recourse — not a civil court action.
6Road Reserves & Encroachment2027 · Explicit · 1.6.5 / 1.6.6
Road Reserves (Road Lines)
A road reserve(also called a “road line”) is a corridor of land set aside for future road widening or development. It is administered by the Land Transport Authority (LTA) under the Street Works Act.
Key Features
- Shown on the Road Line Plan (RLP) issued by LTA
- Land within the road reserve may still be privately owned
- Buildings/structures within the reserve cannot be rebuilt or substantially enlarged without LTA approval
- Setback and building line requirements apply
- A property straddled by a large reserve has reduced usable area and limited rebuilding rights
Estate Agency Implications
- Agent should advise buyer to check the Road Line Plan (RLP) before committing
- Road reserve reduces effective plot area and can prevent A&A works or rebuilding
- Compulsory acquisition for road widening → compensation at OMV
- Road reserve is a material fact that must be disclosed to buyers under CEA/CEPCC
Related: Drainage Reserve
A drainage reserve is a corridor along waterways maintained by PUB for drainage works. Similar to a road reserve — structures within it cannot be built or rebuilt without PUB approval. Also a material fact for disclosure.
Encroachment
Encroachmentoccurs when a structure (boundary wall, fence, roof eaves, foundation, retaining wall) extends beyond a property's legal boundary onto neighbouring land or State land.
| Type | How to Resolve | Key Point |
|---|---|---|
| Encroachment onto State land | Apply to SLA for a TOL (Temporary Occupation Licence) | Annual fee: S$120. TOL = permission only, no proprietary right. SLA may require removal anytime. |
| Encroachment onto private neighbour's land | Negotiate removal or purchase an easement / strip of land from neighbour | Constitutes trespass to land. Neighbour can seek injunction and mesne profits. |
| Overhanging branches / eaves | Neighbour may abate the nuisance (trim branches); or seek injunction | Constitutes both trespass to land (above surface) and nuisance. |
| Underground encroachment (piles, foundations) | Engineering survey required; may need structural indemnity from builder | Cuius est solum — ownership extends below ground as well as above. |
Due Diligence for Estate Agents
Estate agents should advise buyers to commission a land survey (boundary survey)before completion to detect any encroachments. The survey plan should be compared against the Certificate of Title to confirm the property's correct boundaries. Any encroachment discovered should be resolved before exercising the OTP or at least before legal completion.
7State Lands Protection Act 2022 (SLPA) — Cross-Reference2027 · New Act
State Lands Protection Act 2022 (SLPA)
The State Lands Protection Act 2022 (SLPA) consolidates and modernises the legal framework protecting State land from unauthorised use, occupation, structures, and damage. It is administered by the Singapore Land Authority (SLA). The Act is now explicitly listed in the 2027 RES syllabus— RES must recognise the statute name and SLA's enforcement role.
What SLPA covers
- Unauthorised occupation of State land (squatting, illegal use)
- Unauthorised structures on State land (extensions, fences, sheds, plantings)
- Damage to State land (vandalism, dumping, unauthorised excavation)
- SLA's power to issue removal & restoration notices, prosecute, and recover costs
Connection to Section 6 (Encroachment)
- Encroachment onto State land = now governed by SLPA + TOL regime
- Minor encroachments may be regularised via SLA TOL (S$120/year)
- Major or refused encroachments → SLA enforcement under SLPA
- Buyers inherit encroachment risk — SLA may serve notice post-completion
⚠ RES practice point
When marketing landed property near State land boundaries (road reserves, drainage reserves, vacant State plots), inspect for unauthorised extensions / fences / sheds that may have encroached. Disclose visible encroachment as a material fact. Buyers facing SLA enforcement notices post-completion bear the cost of removal and restoration.
Full coverage of SLPA in the wider regulatory context: see Paper 2 Unit 3.3.
📋 Quick Summary — Unit 1.6
Exam traps
- → LBC replaced DP AND DC (not just one of them). Collected by SLA, NOT URA.
- → ABSD applies when topping up residential lease to 99 years.
- → Renewable TOL: max 10 years (not unlimited). Non-renewable: max 3 months.
- → Abandonment: exactly 3 years (not 2, not 5).
- → Compulsory acquisition compensation: OMV since 12 Feb 2007 (remember the date).
- → Ex gratia extended to ALL property types only in 2001.
Section Quiz
12 questions · exam-style difficulty · 90 seconds per question
Section Quiz
Unit 1.6 — State Lands Act 1920
12 questions · 90 seconds each · exam-style difficulty