State Land, Land Betterment Charge, TOL and Encroachment

The State as ultimate landlord

The State alienates (disposes of) land in two main ways under the State Lands Act: a grant in perpetuity (a form of estate held forever, akin to freehold) and a State lease for a fixed term such as 99 or 999 years. In both, the State attaches implied covenants and conditions that bind the grantee or lessee. These typically govern how the land may be used and built on, prohibit certain acts without consent, and — critically for leases — reserve the State's right to have the land back at the end of the term.

• A grant in perpetuity confers an estate that does not expire, but still carries conditions (for example on use and on the State's continuing powers).
• A State lease confers possession for a defined term only, subject to covenants to pay rent, use the land for the permitted purpose, and yield up the land at the end.
• Breach of a fundamental condition can, in principle, expose the interest to forfeiture or re-entry by the State.

Reversionary interest in State leases

When the State grants a State lease, it keeps a reversionary interest: the right to have the land back when the term expires. At the end of a State lease the land reverts to the State, and the buildings on it generally revert too unless the lease is renewed or the term is topped up. This is why a diminishing lease matters so much to value — a flat on a 99-year lease with few years left is a wasting asset, and buyers, banks and the CPF Board treat remaining tenure as central. Advise clients that a short remaining lease affects financing, CPF usage and resale, and never imply that renewal is automatic; it is at the State's discretion.