Guidebook on Registering Property in Malaysia.pdf
Guidebook on Registering Property in Malaysia.pdf
Guidebook on Registering Property in Malaysia.pdf
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GUIDEBOOK <strong>on</strong> REGISTERING PROPERTY <strong>in</strong> MALAYSIAWALKING THROUGH THE SYSTEMA. <strong>Property</strong> with Title (Freehold, Leasehold)The case given here is for the purpose of illustrati<strong>on</strong> <strong>on</strong>ly. The names and vital <strong>in</strong>formati<strong>on</strong>menti<strong>on</strong>ed are fictitious and attached for ease of understand<strong>in</strong>g.20Johari (“Seller”) is the owner of a double-storey terrace house <strong>in</strong> Kuala Lumpur(“<strong>Property</strong>”) who <strong>in</strong>tends to sell it to Hakimi (“Buyer”) for RM 580,000.00(“Purchase Price”). To formalise the purchase, Hakimi will pay Johari an earnestdeposit equivalent to 2% of the Purchase Price. A formal Sale and PurchaseAgreement (“SPA”) will usually be signed by both parties with<strong>in</strong> 14 days thereafter.Up<strong>on</strong> receipt of the earnest deposit, Johari will give a photocopy of the <strong>in</strong>dividualtitle (Appendix 1) to Hakimi as proof of Johari’s ownership to the <strong>Property</strong>. Hakimiwill then appo<strong>in</strong>t a solicitor to c<strong>on</strong>duct the necessary search and prepare thedraft SPA. The terms and c<strong>on</strong>diti<strong>on</strong>s of the SPA usually provide that a deposit of10% (“Deposit”) shall be payable up<strong>on</strong> executi<strong>on</strong> of the SPA. As 2% is alreadypaid, the balance 8% will be paid <strong>on</strong> sign<strong>in</strong>g the SPA.The balance 90% of the purchase price (“Balance Purchase Price”) shall be paidwith<strong>in</strong> 3 m<strong>on</strong>ths from the date of the SPA. An extensi<strong>on</strong> period of 1 m<strong>on</strong>th isgiven if Hakimi is unable to pay Johari with<strong>in</strong> the 3 m<strong>on</strong>ths. An <strong>in</strong>terest raterang<strong>in</strong>g from 8% to 10% is usually chargeable for the extensi<strong>on</strong> period.Hakimi will appo<strong>in</strong>t a lawyer to represent him to c<strong>on</strong>duct the sale transacti<strong>on</strong> whowill ensure that the terms and c<strong>on</strong>diti<strong>on</strong>s of the SPA are favourable to Hakimi andhis rights are also well protected. Simultaneously, Hakimi will also approach aBank to apply for a loan (“Loan”) to partly f<strong>in</strong>ance his purchase of the <strong>Property</strong>.The lawyer act<strong>in</strong>g for Hakimi will, <strong>in</strong> the usual course of events, proceed to c<strong>on</strong>duct thefollow<strong>in</strong>g searches:-• A private land search <strong>on</strong> the <strong>in</strong>dividual title at the Land Office / Registry;• Bankruptcy searches <strong>on</strong> both Johari and Hakimi; and• W<strong>in</strong>d<strong>in</strong>g-up search (if Buyer / Seller is a company).