Guidebook on Registering Property in Malaysia.pdf

GUIDEBOOK on REGISTERING PROPERTY in MALAYSIASTEP 3 Redemption StatementJohari needs to settle all of his outstanding loan to his bank before he can sell his Property toHakimi. The SPA will address the arrangement to the effect that Johari’s outstanding loan to hisbank will be paid by Hakimi or Hakimi’s end-financier (Bank). Such payment which will form partof the purchase price is known as the “Redemption Amount”.• Johari’s lawyer will proceed to request for a Redemption Statement from Johari’s bank.• Johari’s bank will, upon receiving such a request issue a Redemption Statement usuallywithin 2 working days in favour of Hakimi (if cash purchase) or in favour of Hakimi’s bank (ifpurchase with Loan) as set out in Diagram 6.22• The Redemption Statement will specify the Redemption Amount and the deadline for payment.• Johari’s bank will impose nominal charges for the issuance of the Redemption Statement.This request is normally made after Hakimi has obtained his loan.PartiesBankLawyer (acting for the seller /financier) and SellerProcess• Receives letter requesting for redemption statement• Checks account status• Checks system for legal financial status of customer• Cross references with the security document in regardsto the property description• Computes redemption sum• Issues redemption statement• Debits account for service charge• Lawyer receives letter• Seller receives c.c. letter together with debit adviceDiagram 6 - Obtaining Redemption Statement in Straightforward CasesBefore Hakimi’s bank releases Hakimi’s loan, Hakimi is to settle the difference between thepurchase price and the loan granted by Hakimi’s bank (the Differential Sum).In Hakimi’s case, if the loan is RM 500,000.00, the differential sum is RM 22,000.00 as derivedfrom the following calculation.Purchase Price RM 580,000.00Loan Amount Less (-) RM 500,000.00Deposit Less (-) RM 58,000.00Differential Sum RM 22,000.00