Land, under the Federal Constitution of Malaysia, is a State matter. As such it is crucial for the survival of a State, both financially and politically. Given limited resources, land forms one of the State's most important assets and sources of revenue. From annual rents imposed on all alienated lands the State generates its largest share of land revenue and regulates the administration of rent collection through the provisions of the National Land Code. Politically, land also symbolises the sovereignty and inherent power of a State Authority within a Federal arrangement. But whether or not this in theory matches reality, is the concern of this study. Just as it has been in the past, land will always be an important ingredient in a State's finances in the foreseeable future. Revenue from land rent has contributed a lot to the infra-structural development of the country. It is difficult to imagine a State relinquishing its hold over land matters unless there exists a more viable alternative. Evidence suggests that currently returns from land rent form a meagre percentage of a State's total revenue and therefore, are not commensurate with the strength of its jurisdiction in the constitution. To make matters worse, whilst the State's debt increases, rent arrears keep accumulating over the years. Retrieving information from primary sources and documentary evidences, and extracting data from interview and observations of selected Land Offices at work, this study attempts to examine the possible causes of rent defaults and recurring arrears in Peninsular Malaysia by focusing on some of the socio-legal and administrative aspects of the problem.