Transfer ownership of strata titles or be fined
23/06/2007 Published in IProperty By National House Buyers Association
When one condo unit owner was asked on why she has not
taken action to transfer the strata title for her unit from the developer to
herself, she replied that she has not decided to whom or the charity
organization she wants
the property to be registered in. This is an extreme case
of naivety when this particular owner thinks there she can take her own
sweet time to affect the transfer. Other owners gave excuses of not having
prepared the cash for the transfer costs, while some say there are in the
process of selling their units.
The good news for developers and management corporations
tired of owners taking their time to transfer ownership of strata titles is
that the Strata Titles Act, 1985 has been amended to include a deadline for
such transfers as well as making it an offence for non-compliance.
This is the newly included section in the Strata Titles
Act, 1985 from 1st April, 2007 (the operation date of the Strata Titles
(Amendment) Act 2007):
40A. Transfer of ownership of strata titles
(1) Any original proprietor or any person or body
appointed by a court of competent jurisdiction shall execute the transfer
of strata titles to the parcel proprietors within twelve months from the
date of issue of strata titles by the Land Administrator or any extended
period approved by the Director upon the opening of the strata register.
(2) Any purchaser shall execute complete documents
of transfer of strata titles within twelve months or any extended period
approved by the Director from the date of notice of transfer of strata
titles issued by the original proprietor or from the date of purchase of
the parcel, whichever is the later.
(3) Any original proprietor or any person or body
appointed by a court of competent jurisdiction or any purchaser who fails
to comply with subsection (1) or (2) shall be guilty of an offence and
shall, on conviction, be liable to a fine of not less than one thousand
ringgit and not more than ten thousand ringgit per parcel.
As you can see from the above, the purchaser and also the
original proprietor (developer or land owner) shall be guilty of an offence
liable to fines of RM1,000 to RM10,000 per parcel (f convicted) if the
transfers are not executed within the stipulated period. This is reason
enough for owners to quickly execute the transfer once they have received
the notice of the issuance of strata titles from the developer.
How do you know when strata titles are issued?
For primary properties, the strata titles are first
issued to the developer or land proprietor. Once issued, the developer
will write to inform the purchaser, the purchaser's solicitor as well as
the end financier. Normally, the notice will include instructions on the
developer's solicitor's information, amounts to be paid or utility
deposits to be transferred as well as a copy of the title and accessory
parcel (if any).
What is the process to transfer the ownership of strata title?
Developer and purchaser sign Memorandum of Transfer ('MOT') form (Form
14A, National Land Code)
Lawyer sends MOT to Stamp Office for adjudication to ascertain how
much stamp duty is to be paid. Stamp Office then stamps MOT for a
nominal value of RM10.00 (being adjudication fee) and returns MOT to
Valuation Department then values property and informs Stamp Office of
valuation amount. Stamp Office then issues the notice (PDS 14) of the
stamp duty payable based on the said valuation. Lawyer collects stamp
duty from purchaser and proceeds to stamp MOT. A penalty is imposed if
the instrument is not stamped within the stipulated 30 days from the
date of the notice.
After stamping MOT, lawyer presents the MOT and charge instrument
(Form 16A) (for properties charged to a bank), to the Land
Registry/Office for registration. On presentation, a presentation
number would be allocated. It would take an approximate 6 to 9 months
or earlier with the recent implementation of the Computerization
System of Strata Titles.
Once the transfer is registered, you would receive the strata title
from your lawyer. If the property is charged to a bank, the title
would be sent to the bank. You should get a photocopy of the title
from the lawyer for your record.
What are the documents that you must provide to your lawyer?
- Copies of all present and previous Sale & Purchase Agreements (if
you are not the first purchaser, to show proof that you are the last
buyer in the chain).
- Copies of present and previous Loan Agreement, Deed of Assignment,
Deed of Receipt and Re-assignment (if any).
- Strata Title (from the developer)
- Current year quit rent receipt.
- Current year assessment receipt.
What is the estimate amount to set aside for the effectual transfer
Normally, the two main cost of the transfer is the stamp duty and the
legal fees shown below.
The stamp duty is a revenue payable when an application is made to
register changes to a certificate of title or ownership.
1. How stamp duty is calculated
On the first RM100,000
RM1.00 for every RM100 or fractional part of RM100
On any amount in excess of RM100,000 but not
RM2.00 for every RM100 or fractional part of RM100
On any amount in excess of RM500,000
RM3.00 for every RM100 or fractional part of RM100
This means if your property value is RM60,000 the stamp
duty would be RM600 and for a property valued at RM350,000 the stamp duty
would be RM6,000. There usually is a time lapsed from the purchase till the
issuance of the strata titles. At the time of transfer, direct purchasers
from developers usually pay the consideration value (the purchase price) of
the property, whereas subsequent purchasers would have paid the stamp duty
based on market value adjudicated by the Valuation Department.
For purchasers who have paid the full duties on the Deed
of Assignment in sub-sale agreements, the stamp duty is a nominal sum of
RM10.00. This has to be verified by the Stamp Office from the Deed of
Assignment bearing the original stamped impression which also carries a
2. How legal fees for transfer of ownership of strata title is
|Consideration or Adjudicated Value
||Scale of Fees
||Purchases under the Housing
Development (Control & Licensing) Act
||Transfer legal fees (if using same
||Transfer legal fees (if using a
lawyer who is not the SPA lawyer)
|For the first RM 150,000
||1.0 % (minimum fee RM300)
||25% of applicable scale fee from either
Column 1 or 2 (subject to a minimum of RM200)
||50% of applicable scale fee from either
Column 1 or 2 (subject to a minimum of RM200)
|More than RM7,500,00
||Negotiable (but shall not exceed 0.4%)
|RM45,000 or below
|RM45,001 to RM100,000
||75% of scale fee
|RM100,001 to RM500,000
||70% of scale fee
|RM500,001 and above
||65% of scale fee
Note: The table above is compiled from the
Solicitors Remuneration Order 2006 under the Legal Profession Act 1976. The
fees might change so it is best that you check with your lawyer or the
Malaysian Bar Council at www.malaysianbar.org.my on the latest updated
As an example for a property valued at RM350,000 (bought
from a housing developer) the legal fees for transfer using the same Sale &
Purchase Agreement transaction lawyer would be RM656.25.
What happens after the strata title is registered in
You are now the legal owner of the property. The
developer will have to call for the First Annual General Meeting when an
estimate one-quarter of the total owners have transferred the ownership of
strata titles. This meeting marks the day, the developer hand over the
ownership of the common property and land to the Management Corporation
(MC) as well as relinquish control of the management & maintenance to the
MC represented by the Management Council elected from members of the MC.