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 SYSTEMB. <strong>Property</strong> without 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.Note: The terms of the SPA are for illustrati<strong>on</strong> purposes <strong>on</strong>ly and mirror general terms normally forsimilar transacti<strong>on</strong>s. They may vary accord<strong>in</strong>g to the agreement between the buyer and seller asadvised by their respective lawyers.Johari (“Seller”) is the owner of a newly completed c<strong>on</strong>dom<strong>in</strong>ium unit <strong>in</strong> KualaLumpur (“<strong>Property</strong>”) and <strong>in</strong>tends to sell it to Hakimi (“Buyer”) for RM 280,000.00(“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”) is to be signed by both parties with<strong>in</strong> 14 days thereafter.29Up<strong>on</strong> receipt of the earnest deposit, Johari will give a photocopy of the SPAbetween him and the Developer (“Pr<strong>in</strong>cipal SPA”) to Hakimi as proof that Johari isthe beneficial owner of the <strong>Property</strong>. Hakimi will then appo<strong>in</strong>t a solicitor to c<strong>on</strong>ductthe necessary searches and prepare a draft SPA. The terms and c<strong>on</strong>diti<strong>on</strong>s ofthe SPA usually provide that a deposit of 10% (“Deposit”) shall be payable up<strong>on</strong>executi<strong>on</strong> of the SPA. As 2% is already paid, the balance 8% will be paid up<strong>on</strong>sign<strong>in</strong>g of the SPA.The balance 90% of the purchase price (“Balance Purchase Price”) is to 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 is givenif Hakimi is unable to pay Johari with<strong>in</strong> 3 m<strong>on</strong>ths. An <strong>in</strong>terest rate rang<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 protected. Simultaneously, Hakimi approaches a Bank to applyfor a loan (“Loan”) to partly f<strong>in</strong>ance the 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 the follow<strong>in</strong>gsearches:-• Private land search at the Land Office / Registry <strong>on</strong> the Master Title <strong>on</strong> which the parcel iserected;• Bankruptcy searches <strong>on</strong> both Johari and Hakimi; and• W<strong>in</strong>d<strong>in</strong>g-up search <strong>on</strong> the Buyer / Seller (if it’s a company), developer and land owner (ifdeveloper is not the land owner).