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FAQ & Knowledge

Have a question? Here are answers to our most frequently asked questions, plus ways for you to request information if your question is not among them.

FAQ Disclaimer:
While every effort has been made to ensure the accuracy and reliability of this material, the information contained in these pages was obtained from sources believed to be reliable, but www.hba.org.my does not guarantee the information is complete or accurate, or up to date. The information contained is for informational purposes only and should not be construed as advice on facts specific to the reader.

  1. Sale & Purchase

    Q: What is the process & the fees involved in the sale and purchase of a house?

    Q: The developer is charging me late payment interest which is not my fault. What should I do?

    Q: Can I sell my property that has not been issued with a Certificate of Fitness for Occupation?

    Q: Cancellation of booking and seeking refund of fees paid.

    Q: Consent / administration fees for refinancing or re-selling - do I have to pay for it?


    Q: Properties at Auctions - I intend to purchase a property at an auction. What should I be aware of?

    Q: Purchasing 'ready with CF', will I be protected by the Housing Act?

    K: Purchasing a sub-sale apartment without strata titles and the developer has gone 'bankrupt'

     

  2. Fees & Charges
     

    K: Lawyer's fees - Solicitors Remuneration Order 2006
     

    K: Stamp duty - Computation of Stamp Duty for Transfer of Real Estate
     

  3. Vacant Possession

    Q: I have received vacant possession but till now, there is still no sight of the CFO. What should I do?
     

  4. Lawyers

    Q: Why do I need to use my own lawyer?

    Q: The lawyer is charging me a certain amount for legal fees, is this amount correct?
     

  5. Defects

    Q: Defects liability period - how to make your claims

    Q: Water intrusion (leakage) from upper unit - condo management not helping because 'defects liability period' is over so they say - what can I do?
     

  6. Insurance

    Q: Both the developer and my end-financier are billing me for the fire insurance - why should I pay double?

    Q: What is MRTA?

    Q: What is fire insurance for strata titled properties and the Management Corporation?
     

  7. Late Delivery

    Q: Can I claim LAD until the date when electricity supply is actually provided?

    Q: Late Delivery Claims - My developer has offered verbally to only pay 50% of my claims which I do not agree. What should I do?

     

  8. Tribunal for Homebuyer Claims

    Q:  Where can I find information on the Housing Tribunal?
     

  9. Starting a Buyers' Group / JMB / Management Corporation

    Q:
    How do I start a residents association/group/committee?
     

  10. Information

    Q: Where can I find information on a developer of a new project?

    Q: Where can I get more information on Housing Loans & Loan Packages?

    K: What is the difference between leasehold and freehold tenure?
     

  11. Condo Management & Maintenance - how to form JMB or MC?

    Q: I own a unit in a condo/subdivided building where many of it's owners are refusing to pay for the maintenance because the property is not properly maintain. What can I do to ensure that the building is better maintained & managed?
     

  12. What is the meaning of ... ?

    Q1: What are the differences between leasehold and freehold tenure?

    A:
    Click here to view  the explanation.

    Q2: What is CF, CCC, LAD, Strata Titles, etc?

    A: 
    For definitions used in statutes, check here.
     

  13. Public announcements
     

    (1) Changes to laws, rules & regulations
     

    (2) Stamp Duty Waivers
     

    (3) EPF withdrawals
     

    (4) Real Property Gain Tax (RPGT)

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1. Sale & Purchase

Q: What is the process & the fees involved in the sale and purchase of a house?

A: Check out this detailed information from the Malaysian Bar Council.

Q: The developer is charging me late payment interest which is not my fault. What should I do?

A:
All payments under the Sale and Purchase Agreement (SPA) must be paid within the time frame specified in the agreement. Otherwise, the developer has a right to charge interest on late payments. Unless you can prove that the reason the progressive payments were late was because of the financier, lawyer or even the developer, you will have to foot the bill. Lawyers and financiers dealing with conveyancing work are familiar with the time frames within which they have to work to prevent buyers from footing additional interest on late payments.

Clause 9 (2)  - Interest on late payments - in the regulated Sale Contracts Schedules H or G states the following:

... (2) The Vendor shall not be entitled to charge interest on late payment in respect of any instalment if the delay in payment of such instalments is due to any one or more of the following:-
(a) the relevant progressive claim notice referred to in the Third Schedule hereto furnished by the Vendor to the Purchaser and/or the Financier is not complete or not in compliance to the requirement of Clause 4(2) herein;
(b) in the event the said Land is encumbered to any bank(s) and/or financial institution(s) by the Vendor, such bank(s) and/or financial institution(s) shall delay of fail to issue and deliver the redemption statement and undertaking letter in respect of the said Lot to the Purchaser or the Financier;
(c) in the event the said Land is encumbered to any bank(s) and/or financial institution(s) by the Vendor, the Financier shall refuse to release the relevant portion of the Loan equivalent to the progressive payment due on the ground that such progressive payment is insufficient to settle the full redemption sum payable in respect of the said Lot."


You should try to obtain a chronology of events which caused the delay to help you understand who delayed the payments, whether it is the lawyer, financiers or developer. If possible try and find another lawyer dealing with conveyancing issues to advise you. If you know which party is at fault, you can demand that he foot the bill. However, you may have to pay the developer under protest first in order for you to claim your money back from the party at fault. Otherwise, the longer you delay, the more interest you will have to pay. If the party at fault refuses to pay you, you may then have to seek legal redress either through the Financial Mediation Bureau for banks, Malaysian Bar Council for lawyers and the Tribunal for Homebuyer's Claims for the developer.

Q: Can I sell my property that has not been issued with a Certificate of Fitness for Occupation?

A:
Yes, properties can be transacted without CFO. However, without CFO it might hamper the buyer from securing a bank loan.

Q: Cancellation of booking and seeking refund of fees paid.

A:
The Housing Regulations for buying off-plan from housing developers do not allow for 'booking' fees, so potential buyers should be aware of this and only get your 10% down payment ready when you are sure of purchasing. There is no cooling-off period unless it is in writing. A booking fee is an offer to purchase. Many buyers do not realise that a signed offer to purchase is legally binding once the seller has accepted the offer.

It is the same situation if one is buying previously owned property, once you have signed an offer to purchase and pay an earnest deposit, you lose your deposit if you change your mind about buying the property.  Cancellation will cost you part of your booking fees if not all.  You should consult your lawyer first before parting with a single cent and not be rushed into paying a deposit, no matter how small the amount is.

Q: Consent / administration fees for refinancing or re-selling - do I have to pay for it?

A: 
Check out this article by Roger Tan which gives a detail explanation on what the seller or buyer has to do.

Q & A on amended housing law - 18/05/2007 The Sun By Roger Tan (Chairman of the Conveyancing Practice Committee, Malaysian Bar Council)

Q: Properties at Auctions - I intend to purchase a property at an auction. What should I be aware of?

A:
Normally, properties at auctions are sold on a  'as-is-where-is' basis. No guarantee is given on Vacant Possession and titles. Sometimes, it is not possible to inspect the interior of the property, but to rely on information given which is itself a risk that the bidder has to take.

Steps to take:

  1. Inspect the subject property and make enquiries with the neigbours.

  2. Conduct an official title search on the Master Title or separate title, if available, at the relevant Land Office and check with the Local Council and Land Office for arrears on the assessment tax and quit rent, respectively.

  3. Enquire from the Developer/Landowner and/or other relevant authorities on the terms of consent to the sale  Check also for arrears of service charges, quit rent, utility bills, etc.

  4. Obtain a copy of the Proclamation of Sale from the Auctioneer and ensure that you understand all the terms & conditions stated in the Condition of Sale prior to the auction.

  5. Appoint a lawyer to advise you prior to making a bid.

More information:

  • Auction caution 11/03/2008 The Star Articles of Law By BHAG SINGH
    Properties sold at an auction may appear to be cheap. But buyers need to understand the various aspects that could indirectly hike up the price.

  • Making a bid at a public auction 30/06/2006 The Sun - Law & Realty By Andrew Wong
    Generally, there are two types of public property auctions taking place in Malaysia, and anyone who intends to bid at a public auction should know what additional costs he may have to incur, over and above the purchase price.

  • Bid Smart NST Property Times 30 October 2004 issue -By Lydia Gomez
    When bidding at an auction, it is best that you conduct an inspection prior to buying the property you want.

  • Fine tuning public auctions 22/03/2003 NST-PROP By Salleh Buang
    When the National Land Code, 1965 was amended recently, many thought it was merely to effect a shift in policy announced earlier by the Prime Minister.

Q: Purchasing 'ready with CF', will I be protected by the Housing Act?

A:
If you are purchasing a housing accommodation unit that is 'ready with CF', it is not covered under the new HDA as it is deemed completed whilst the ones under the ACT are those under construction and sold 'off the plans'.

Q: Purchasing a sub-sale apartment without strata titles and the developer has gone 'bankrupt'

A:
You can anticipate lots of problems when a developer of your property is insolvent as there are outstanding matters in the original contract of sale (between the previous buyer and developer). It is best that you seek legal advice if you intend to go ahead with your purchase.

These are some of the problems to expect:

  • disruption of maintenance & management services;

  • if the applications for strata titles have not been made in accordingly -  you might end up having to pay for the application of the strata title yourself;

  • difficulties in completing legal documentations eg. re-financing, re-sale etc;

  • having to deal with a third party ie Liquidators or Receivers or Insolvency Department, who has stepped into the shoes of the developer by court orders.

  • in the case of a re-sale, financiers may be reluctant to finance such purchase.

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2. Fees & Charges
(Read No 13 for Public Announcements on changes / waivers)

K: Lawyer's fees - Solicitors Remuneration Order 2006 or check with the Malaysian Bar Council for the latest Order.

K: Stamp duty - Computation of Stamp Duty for Transfer of Real Estate

K: Real Property Gain Tax - Read announcement on waivers

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3. Vacant Possession

Q: I have received vacant possession but till now, there is still no sight of the CFO. What should I do?

A:
These are the steps that you may take:

i. Check with the developer and the issuing local authorities on the cause of the delay.
ii. If you are not satisfied with the response that you have been given, you may make a complaint to the Ministry of Housing and Local Government together with the following documents:

a) a copy of the notice of handover of vacant possession
b) a copy of the certificate of completion issued by the Architect
c) a copy of the letter from the local authorities regarding the issue of CFO

iii. Form an action group with other affected buyers for a cohesive voice and also to share task and to show how concerned and serious this group of affected purchasers in wanting to move into their homes.
iv. Check if similar complaints on the same project has been received and also on whether an action group for that particular project has been formed and if not, to learn on the steps on how to form one

How to check : Check here for groups formed; Join HBA's Online Forum or Contact Us.

4. Lawyers

Q: Why do I need to use my own lawyer?

A:  The first rule of conveyancing is 'buyer must engage own lawyer'. Consult a lawyer right from the start and not after you have paid the deposits. Reasons to use your own lawyer:

Under the law you are deemed to have read and understood every document you signed. Furthermore, promises made by the seller or someone else about the deal may not be enforceable if the promises are not in writing.

Lawyers cannot represent both Vendor & Purchaser - if you are using the Vendor's panel lawyer, often, when disputes happen, the lawyer is unlikely to represent you against their bigger client.

A lawyer in general practice will be able to complete your purchase; however, lawyers with a focused real estate practice may prove a better tool if you are unsure of what to do, or have complications in your purchase agreement or mortgage. While you may think that you cannot afford the services of your own lawyer, consider whether you can afford not to.

More information
:

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5. Defects

Q: Defects liability period - how to make your claims

A: If you find any defects in the property after receiving vacant possession, make sure you submit the defects list in writing to the developer within 18 or 24 months (whichever is applicable)  from the date of vacant possession. The developer will have 30 days from the date of receipt of your list to rectify the defects. If the developer fails to rectify within the stated time, you can then engage someone else to do the rectification works and charge the costs (through the stakeholder lawyer who is holding the 5% purchase price) to the developer provided you have given another 14 days' notice to notify the developer of your intention.

Since 5% of the purchase price is being retained as stake holder's fund, we urge complainants to give written notice to the stakeholder lawyer to withhold release of the said sum until and unless the complainant is satisfied with the remedial and repair works by the Developer.

Sample Letter:

More information:

Q: Water intrusion (leakage) from upper unit - condo management not helping because 'defects liability period' is over so they say - what can I do?


A: The Developer or the Management Corporation has a duty to maintain common properties such as pipes which are used in common by two owners or more and individual owners have a duty to maintain their own units. You will have to first determine the owners of the defective items which is the source of the water seepage. The following options can then be considered, if the items are not common property.

a) approach the neighbour for assistance and cooperation. You will need it to gain access to rectify the water leakage from your neighbour's unit. Find out from the neighbour if they have done any renovation to their unit that may have caused the leakage.

b) study your Deed of Mutual Covenant (DMC) or House Rules on the subject. The maintenance and upkeep of properties in a condo are normally identified and defined in the DMC or House Rules. For eg. there might be a covenant that  neighbours' sharing walls, ceiling/floors etc also share the cost for repairs. In the event that your neighbour is not cooperative, you will need the management to help you 'manage' the neighbour according to the mutual covenants of the condo. However, it makes sense that the source of the water seepage has to be repaired by the unit owner first.

c) normally there is another clause in the DMC or House Rules, that says "unit owners are to keep their unit in good condition so as not to inconvenience other owners" or some wordings to that effect. Ask the management to assist you.

d) Get a quotation from your contractor, so that you know the price that you will need to pay in the event that the neighbour is not cooperative.

e) If you are still not satisfied that you will have to end up footing the bill, consider getting a lawyer to study your case. However, you will have to consider whether it is worth paying legal fees or paying for the repairs yourself.

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6. Insurance

Q: Both the developer and my end-financier are billing me for the fire insurance - why should I pay  double?


A: The House Owner/Fire Insurance policy
This policy provides coverage for your property against natural disasters such as flood, fire, riot, strike and malicious damage. For properties with strata titles such as apartments or condominiums, you need not buy the insurance because the Management Corporation (MC) would have taken up insurance on the entire building. You should ensure that you obtain the sub-certificate of the Master Policy issued by the insurance company from the MC and present it to the financial institution. This is necessary so that the financial institution is aware that the property has been insured and will not buy another fire insurance on your property. In such a case, you will be required to assign your rights under the policy to the financial institution.
Source: www.bankinginfo.com.my

Q: What is fire insurance for strata titled properties and the Management Corporation?


Check out this FAQ from Persatuan Insuran Am Malaysia

Q: What is MRTA?


A
: The Mortgage Life Assurance or MRTA
This type of policy provides for full settlement of the outstanding balance of the housing loan with the financial institution, in the event of total permanent disability or death of the borrower. Premiums can usually be included in the loan amount, and the repayment period of the premium is usually spread over the loan tenure. The premium is only incurred once. There are no monthly or yearly premiums to be paid. In the event of early termination of housing loan, you will generally have the option to request for a refund of the premium for the balance of the unexpired period or to continue the insurance coverage.
Source: www.bankinginfo.com.my

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7. Late Delivery

Q: Can I claim LAD until the date when electricity supply is actually provided?

A
:
Please read and understand the definition of "ready for connection" in your Sale and Purchase Agreement. Thereafter, write to TNB for their written confirmation as to where the fault is and the party that is attributing to the delay of supply being available. With the documentary evidence, you could then substantiate your claim that the Developer has prematurely delivered vacant possession to you and thus your claim for LAD.

Q: Late Delivery Claims - My developer has offered verbally to only pay 50% of my claims which I do not agree. What should I do?

A: Your rights and entitlement is contained in your Sale and Purchase Agreement. First of all, you should make your demand in writing immediately upon receiving notice for handover of vacant possession. If you do not know how to go about writing a demand letter, you may use our sample as a guideline. If you are not satisfied with the response from the developer whether verbal or written,  you may then seek legal recourse. If your claim is below RM50,000, you may check further to see if other conditions falls under the jurisdiction of the Tribunal for Homebuyer Claims. Otherwise, you may seek redress at the Civil Courts. For more information on the Tribunal, see FAQ below.

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8. Tribunal for Homebuyer Claims

Q: Where can I find information on the Housing Tribunal?

A: You can check out the link from the Ministry of Housing & Local Government - Tribunal Tuntutan Pembeli Rumah or check the laws & regulations regarding the Tribunal - Housing Act / Housing Development (Tribunal for Homebuyer Claims) Regulations 2002.

For the addresses of the Tribunals, check here.

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9. Starting a Buyers' Group / JMB / Management Corporation

Q: How do I start a residents association/group/committee?

A: There is no necessity for strata title property owners to register a residents' association as the Building & Common Property (Maintenance & Management) Act 2007 allows for the joint formation of a Joint Management Body while waiting for the Management Corporation (see answer to Question 10) to be formed. If there are other reasons for forming one, for eg, non-strata title property owners or where vacant possession has not been handed over, the articles below may help you form one.

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10. Information

Q1: Where can I find information on a developer of a new project?

A: There is no one stop centre for a study of a developer's record. The main reason is that big corporations tend to set up a subsidiary for every project. There are also instances where the development project is a one time venture that the company/individual undertakes. You will have to do some investigative work to get the information you want. We suggest the following places to check.

a) if the parent company is listed - you can check with www.klse.com.my for the background and for all the subsidiaries of the company. Read also all announcements for litigation news and public reports.

b) if the company is licensed by the Ministry of Housing and Local Government - you may check from www.kpkt.gov.my - Idaman Web - however the information is only restricted to the subsidiary company and there is limited information on past performances and in many cases, there are blank information not updated by the Ministry.

c) you can subscribe to www.emedia.com.my - to check for news on all related subsidiary companies of the parent company to find out if there are complaints from buyers as far back as 1991.

d) you can ask the developer themselves for the names of the projects they have claimed to developed - so that you can go look for yourself and maybe contact some of the past buyers for feedback. If the developers are very proud of their past projects,  they would gladly give you reference.

e) check also from websites eg, http://www.ipsofactoj.com or www.kehakiman.gov.my . These sites provide case laws if the parent company or any of their subsidiary has been involved with law suits with the buyers.

However, this is just the initial checking step. There are pros & cons of buying new from a developer. The pitfalls of buying 'off-plan' is just too numerous to mention here. We can only advise you that the reliability of any project and its developer is the honest desire of the developers to complete the project within the time frame and with minimum defects. We hope you have browsed our website to read about the pitfalls others have experienced. For a start, we have a publication that you can purchase.
 

Further Reading:
Information pays - 25/10/2003 NST-PROP
 

Q: Where can I get more information on Housing Loans & Loan Packages?
A: Go to www.bankinginfo.com.my

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11. Condo Management & Maintenance - how to form JMB or MC?

Q: I own a unit in a condo/subdivided building where many of it's owners are refusing to pay for the maintenance because the property is not properly maintain. What can I do to ensure that the condo is better maintained & managed?


A:
Check out the following links on the Building & Common Property (Maintenance & Management) Act that is in operation from 12 April 2007. The developer has 12 months from that date to call for the first meeting to form the Joint Management Body. This is good for apartments like yours where strata titles are not issued yet.

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12. What is the meaning of ... ?

Q1: What are the differences between leasehold and freehold tenure?
A:
Click here to view  the explanation.

Q2: What is CF, CCC, LAD, Strata Titles, etc?
A: 
For definitions used in statutes, check here.

Back to the Top

13. Public Announcements

(1) Changes to laws, rules & regulations

  • Changes in the Solicitors’ Remuneration Order

  • Only New Projects To Follow New CFO System 13/04/2007 Bernama
    PETALING JAYA, April 13 (Bernama) -- New projects from now on will be subjected to the Certificate of Compliance and Completion (CCC) system which replaces the Certificate of Fitness for Occupancy (CFO), Housing and Local Government Minister Datuk Seri Ong Ka Ting said today.

  • CCC Ensures Full Accountability, Says Ong 14/04/2007 Bernama
    KUALA LUMPUR, April 13 (Bernama) -- The parties that issue the Certificate of Compliance and Completion (CCC) for building projects will be held accountable for its safety forever, said Housing and Local Government Minister Datuk Seri Ong Ka Ting.

  • Developers Of High-rise Buildings Can Seal Properties Of Tenants 14/04/2007 Bernama
    KUALA LUMPUR, April 14 (Bernama) -- The assets of owners and tenants of units in high-rise buildings such as condominiums, office buildings and shopping centres who refuse to settle maintenance charges can now be sealed.

(2) Stamp Duty Waivers

(3) EPF withdrawals
  • EPF To Announce Details On New Housing Withdrawal In December 07/09/2007 Bernama.com
    KUALA LUMPUR, Sept 7 (Bernama) -- The Employees Provident Fund (EPF) will announce details on the new monthly housing withdrawal in December.

  • Easing burden for property buyers 08/09/2007 The Star
    M. RAGENI has one “headache” less now. She will be able to use part of her monthly salary for other expenses with the announcement that EPF contributors will be allowed to make monthly withdrawals from their Account Two for housing loan repayment.

  • Housing loan scheme won’t affect EPF earnings 08/09/2007 The Star By SIM LEOI LEOI
    PUTRAJAYA: The freeing of RM9.6bil in Employees Provident Fund contributions to pay for the purchase of homes by the public will not affect the earnings of the body.

  • EPF withdrawals to go into members’ bank accounts 12/09/2007 The Star By IZATUN SHARI
    KUALA LUMPUR: The EPF monthly withdrawal for reducing housing loans will be credited directly into the contributor's personal bank account and not to the lending bank.

  • Groups: Credit EPF savings to banks, not personal accounts 12/09/2007 The Star
    KUALA LUMPUR: Several organisations want the monthly withdrawals from the EPF Account 2 to be credited to the financial institution from which the housing loan was taken instead of to the contributor's personal account.

  • EPF scheme to help members save more for retirement 23/10/2007 The Star By PAUL CHOO
    KUALA LUMPUR: All Employees Provident Fund contributors will, from Feb 1, be able to withdraw part of their funds and channel them to approved investment programmes.

  • 55 before spouse can claim savings 23/10/2007 The Star
    KUALA LUMPUR: Beginning June 1 next year, any claim on a deceased spouse’s Employers Provident Fund savings will only be paid once the claimant reaches the age of 55. 

  • New ruling only applies in divorce cases, says EPF 24/10/2007 The Star
    PETALING JAYA: A person who succeeds in claiming the Employees Provident Fund savings of a spouse in a divorce case will only be able to get the money when the claimant reaches age 55.

(4) Real Property Gain Tax (RPGT)
  • Major boost for high end property 23/03/2007 The Star By KEITH HIEW
    PETALING JAYA: Prime Minister Datuk Seri Abdullah Ahmad Badawi, who announced the scrapping of the real property gains tax (RPGT) from April 1, hopes the move would “inject more excitement and dynamism to both the property and financial sectors.”

  • Property tax exemption a double-edged sword 14/04/2007 The Star CURRENT TAX MATTER By DR JEYAPALAN KASIPILLAI
    While exempting property transactions from real property gains tax (RPGT) will provide a boost to the real estate sector, the move may also spur greater market speculation. In view of this, the Government’s move to exempt rather than repeal RPGT may provide a safety net over the long term.

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