Raffles made Hussein sultan without the regalia, and in 1897 a court ruled his grandsons' palace land belonged to the Crown

When Sultan Mahmud Shah III of Johor-Riau died in 1812, his court installed his younger son Abdul Rahman instead of the elder, Hussein^†. The royal regalia stayed with the late sultan's consort, Engku Puteri Hamidah, and by custom no sultan was valid without them^†. On 6 February 1819 Stamford Raffles signed a treaty with Hussein as Sultan of Johor, paying him 5,000 Spanish dollars a year for a British trading post at Singapore. Engku Puteri refused to hand the regalia to Hussein; the Dutch took them from her by force in October 1822 and installed Abdul Rahman instead^†. The East India Company set aside about 23 hectares at Kampong Glam for Hussein "and his heirs and successors". Hussein died at Malacca in 1835. His son Sultan Ali built the present Istana, finished in 1843, and died in 1877. Ali's eldest son Tunku Allum collected the rents and supported the family until his death in 1891. His heirs then sued one another over the land. On 23 December 1897 the Court of Appeal ruled that the land was Crown land, occupied "without legal right or title". The Sultan Hussain Ordinance of 1904 replaced the land with annuities. In 1999 the scheme was reset at S$350,000 a year for 30 years from 1 March 2000, payable only to family members already receiving it. The Istana became the Malay Heritage Centre in 2005 and a national monument in 2015.