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Sale and
Purchase of Houses
Source: The Malaysian Bar
http://www.malaysianbar.org.my/content/view/1382/218/
1. Information which a buyer should obtain when buying a house
1. Does it have a
separate title?
2. Take a photocopy of the title.
3. Get a photocopy of :-
(a) current
quit rent receipt;
(b) current assessment receipt.
4. Make sure you
deal with owner of house or his duly authorised agent. (such authority
should be in writing). Any other person will not be able to make any binding
commitment to you.
5.1. If the house/apartment does not have any title, then get evidence of
the seller's ownership i.e. a copy of the Sale & Purchase Agreement (SPA)
made by the seller with the developer when he purchased the house/apartment.
5.2. If the seller is a Second/ Third hand owner, then he would have to give
you:-
(a) 1st SPA
made by 1st owner with developer;
(b) 2nd SPA made between 1st owner and seller, (if 2nd hand); and
(c) 3rd SPA between 2nd owner and 3rd owner seller, (if 3rd hand).
as proof that the
seller is the owner of the house/apartment.
6. Did the seller take a loan to buy the property?
For most cases, the answer is "yes". In such a case, you should get the
seller to provide you with the bank's statement of how much he still owes
the bank (redemption statement). With the redemption statement, you would
know how much money you can release to the seller and how much is to be paid
to his bank to obtain a discharge of the property from the bank.
2. Information relevant to apartment
1) Maintenance and other charges that need to be paid to
developer/management committee. You should check that seller is up to date
with his payments and there are no arrears due to developer/management
corporation.
2) If the apartment has no strata title, the seller must get the consent of
the Developer to assign the unit to you. Developers may charge
"administrative charges" to give such consent. Such Charges are now
regulated by the latest amendment to the Housing Development (Control And
Licensing) Regulations 1989 by the inclusion of regulation 11A which reads
as follows:-
11 A.
Consent to assignment.
(1) Subject to sub regulation (2), where in the sale of a housing
accommodation to which no separate or strata title has been issued, no
housing developer shall impose any administrative fee or any fee by
whatever name called upon any purchaser or subsequent purchaser for giving
his consent, if required, for such purchaser to resell the housing
accommodation if such fee shall exceed zero point five per centum (0.5%)
of the purchase price or five hundred ringgit, whichever is the lower.
(2) No housing developer shall collect any fee by whatever name called for
giving his consent to any purchaser or subsequent purchaser of a housing
accommodation to assign his rights and benefits to and in the contract of
sale to any financial institution providing a loan for such purchaser to
finance or part finance the purchase of the housing accommodation.
(3) Where in the sale of a housing accommodation to which no separate
title has been issued, a housing developer shall execute the instrument of
title within twenty one (21) days from the date the separate title is
subsequently issued and received by the housing developer from the
Appropriate Authority and thereafter forward the same to the purchaser who
shall execute the instrument of transfer within twenty one (21) days from
the receipt of the same from the housing developer.
(4) This regulation shall have effect notwithstanding anything to the
contrary in any agreement.
Note by
HBA : Housing Development (Control & Licensing) Act has been amended and
enforced from 12.04.2008
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22D. Assignment.
(1) For the avoidance of any
doubt, an absolute assignment in writing, under the hand of the assignor
of the housing accommodation, not purporting to be by way of charge
only, of the proprietary right or interest in the housing accommodation
and the legal chose in action in the sale and purchase agreement in
respect of a housing accommodation, of which express notice in writing
has been given to the housing developer by the assignor in the manner
set out in subsection (2) shall be deemed to have been effectual in law
to pass and transfer the proprietary right, interest, chose in action
and all legal and other remedies for the same to the assignee, from the
date of the receipt of such notice by the housing developer, and the
concurrence of the housing developer shall not be required. |
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(2) Subject to subsection (8), every notice of
assignment given to the housing developer pursuant to subsection (1)
shall be delivered by the assignor or his solicitors to the housing
developer at or after the completion of the sale and purchase between
the assignor and the new purchaser of the housing accommodation and
shall be accompanied by- |
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(a) duly stamped sale and
purchase agreement between the assignor and the new purchaser of the
housing accommodation, if any; |
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(b) duly executed deed of
absolute assignment between the assignor and the new purchaser of the
housing accommodation together, if applicable, with a letter of
undertaking from the new purchaser or the new purchaser's financier, as
the case may be, to deliver the duly stamped deed of absolute assignment
within fourteen days after the same has been stamped; |
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(c) full payment of all sums
and outgoings due to the housing developer under the sale and purchase
agreement. |
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(3) A housing developer shall
keep and maintain an up-to-date, proper and accurate register of all
purchasers of the housing accommodation until separate or strata titles
for all the housing accommodation in the housing development have been
issued by the appropriate authority and registered in the names of all
the purchasers of the housing accommodation in that housing development. |
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(4) The housing developer shall
provide all necessary and accurate confirmation of the records in the
register whenever requested by a purchaser of the housing accommodation
or his solicitors or his financier or his financier's solicitors subject
to a payment of a fee not exceeding fifty ringgit or such amount as may
be prescribed from time to time for meeting every request for
confirmation in respect of all of the following: |
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(a) full particulars of the
housing accommodation; |
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(b) the postal address of the
housing accommodation; |
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(c) the current purchaser of the
housing accommodation; |
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(d) the current chargee or
assignee of the housing accommodation; |
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(e) the total amount due to the
developer under the sale and purchase agreement as at the date of the
confirmation; and |
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(f) such other matter as may be
prescribed from time to time. |
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(5) Any person who requires any
consent from a housing developer to any absolute assignment or
assignment by way of charge in contravention of subsection (2) shall be
guilty of an offence and shall, on conviction, be liable to a fine which
shall not be less than fifty thousand ringgit but which shall not exceed
one hundred thousand ringgit or to imprisonment for a term not exceeding
three years or to both. |
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(6)
Any housing developer who- |
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(a) requires any consent to any
absolute assignment in contravention of subsection (1); |
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(b) imposes any condition to any
absolute assignment or assignment by way of charge including requiring
the new purchaser to execute any additional agreement or make any other
payment in contravention of this section; |
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(c) fails to comply with
subsection (3); or |
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(d) fails or refuses to provide
any confirmation in contravention of subsection (4) or imposes any
condition or any other fee in respect of any matter arising from
subsection (4), shall be guilty of an offence and shall, on conviction,
be liable to a fine which shall not be less than fifty thousand ringgit
but which shall not exceed one hundred thousand ringgit or to
imprisonment for a term not exceeding three years or to both. |
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(7) For the purpose of this
section, references to "new purchaser" wherever appearing shall include
a purchaser's financier or any beneficiary under the estate of a
deceased purchaser or an assignee under an absolute assignment whether
with or without consideration. |
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(8) The expression "completion
of the sale and purchase" in subsection (2) in relation to a deed of
absolute assignment executed in favour of a purchaser's financier or any
beneficiary under the estate of a deceased purchaser or an assignee
under an absolute assignment whether with or without consideration not
in pursuance of a sale and purchase agreement shall mean the date of
that deed of absolute assignment in which case paragraph (2)(a)
shall not apply. |
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(9) This section shall apply to
any housing accommodation where separate or strata title for the housing
accommodation has not been issued by the appropriate authority. |
3. Housing
Schemes that are developed by Statutory bodies e.g. Penang Development
Corporation (PDC), Perda, PKNS, etc
1) The SPA of such schemes may have restriction on the buyer selling the
property i.e. it could not be sold within a stipulated period or without the
consent of the government.
2) The title to the property may have restrictions. (the restrictions could
be read from the title or search of the title) e.g. property cannot be
transferred or charged without State consent.
3) The consent application may take a few months to be approved.
4. Documents you need to sign
1) Sale & Purchase Agreement;
2) CKHT form (form required to be submitted by Vendor and Purchaser to
Inland Revenue Board Malaysia
3) Stamp Duty form;
4) Transfer form 14A. (If title is issued);
5) Deed of Assignment (if title is not issued).
5. The process involved in getting you registered as the owner of the
property (in cases where title is issued)
1) Both seller and buyer sign transfer form 14A.
2) Lawyer sends transfer form to Stamp Office for adjudication to ascertain
how much stamp duty is to be paid.
3) Stamp Office then stamps 'transfer form' for a nominal value of RM10.00
and returns transfer form to lawyer.
4) Stamp Office then informs Valuation Department of transaction. Valuation
Department then values property and informs Stamp Office of valuation.
5) Stamp Office then issues PDS form to the lawyer. Buyer is normally given
three (3) to four (4) weeks to pay stamp duty failing which, a penalty would
be imposed.
6) Lawyer collects stamp duty from purchaser and proceeds to stamp transfer
form. It may take about a week for the Stamp Office to return the lawyer the
duly endorsed form. After stamping transfer form, lawyer presents the
transfer form to the Land Registry/Office for registration. On presentation,
you would be the registered owner of the property. However it may take
several months (depending on which Land Office) before the physical title is
returned by the Land Registry/Office. With the computerization process
recently implemented in all Land Offices/ Registries in the country, the
process is expected to be shortened.
If you obtain a loan from a bank to buy the property, the title would be
sent to the bank. You should get a photocopy of the title from the lawyer
for your record.
6. How is stamp duty calculated?
For the transfer/assignment (if no individual title is issued), based on the
adjudicated value by the Stamp Office:
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Amount charge (RM) |
Percentage |
Duty (RM) |
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On the First |
100,000.00 |
1% |
1,000.00 |
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On the Following |
400,000.00 |
2% |
8,000.00 |
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More than |
500,000.00 |
3% |
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For Charge
Stamp duty on a Charge is RM5.00 per RM1,000/- or part thereof of the loan
amount e.g. Loan of RM100,000/-, stamp duty is RM 500/- on the original. The
stamp duty per copy of the document is RM10/-.
The assessed value is the value assessed by the Valuation Office based on
the purchase price or the market value of the property, whichever is higher.
7. Appointment of Lawyers
1. You have the right to appoint a lawyer of your choice to act for you in
any transaction whether it is a purchase from a developer or an individual.
After all, legal fees etc, are borne by you. You should ascertain that:-
(a) he is a lawyer;
(b) that he has a valid practising certificate for the current year.
Verification of the above can be done with the Bar Council.
Each party to the transaction is advised to retain separate lawyers to
protect their respective interests.
A lawyer can:
(a) advise, prepare and /or vet documents such as SPA, deed of assignment,
deed of reassignment, deed of mutual covenants, deed of reassignment and
loan document. However, the SPA for purchases of residential properties
from a developer is a standard form agreement fixed by law;
(b) conduct land, bankruptcy/insolvency and company searches to ensure
that there are no surprises, such as a different registered owner,
encumbrances (charges, caveats), conditions or restrictions on the title
(important for a buyer), or that a party is bankrupt/insolvent;
(c) if there is an individual title, to enter a private caveat to freeze
all dealings in the property until it is transferred to the buyer;
(d) send documents/instruments to the Stamp Office for adjudication and
arrange for their stamping;
(e) act as stakeholder, to hold all money paid, retain 5% of the purchase
price for the purpose of Real Property Gains Tax; and/or to hold the
balance of the purchase price;
(f) prepare and witness the execution of statutory forms;
(g) for a sub-sale where the individual title has not been issued, get the
consent of the developer to the sale of the property to the new buyer and
to undertake the registration of the property in the name of the new
buyer. The lawyer should also get an undertaking from the developer not to
further encumber the property, and for a development project with a master
title, a letter of disclaimer from the chargee of the master title
confirming no right or interest in the individual property;
(h) if the buyer takes a loan, get a letter of undertaking from the
lender. The undertaking will include an undertaking that it will not
foreclose the property if the loan, interest, etc has been repaid/paid;
and
(i) present the transfer (Form 14A) and if applicable, the charge (Form
16A) for registration at the land office.
Can a lawyer act for the seller, buyer and the buyer's lender?
A lawyer may only act for one party in one transaction, but may witness
the execution of any documents/instruments by any party. A sale and purchase
is one transaction and a loan is another separate transaction. Therefore a
lawyer can act for a seller or buyer, and also a lender or borrower.
However, the solicitor concerned should have regard to any possible conflict
of interest situation.
Lawyers are bound by the Solicitors' Remuneration Order 1991 (SRO) and
there are scale fees for all conveyancing transactions and secured banking
transactions done by a lawyer.
Lawyers are not allowed to give any discount. If any lawyer gives a
discount on the scale fees, he could face disciplinary action.
There are fixed scales for lawyers' fees if you, as a seller or buyer,
engage a lawyer. (stated herein is for fees only and does not include
disbursements).
8. Lawyers' Fees
Solicitors Remuneration
Order 2006 (click to view or download)
9. House Seller's Guide
Documents/ information you must provide buyer/buyer's solicitors
(a) Copies of
your previous Sale & Purchase Agreement and Loan Agreement/Title.
(b) Current year quit rent receipt.
(c) Current year assessment receipt.
(d) Redemption Statement from your bank (if you have charged your house to
the bank).
(e) Letter of Undertaking to purchaser's bank to refund purchaser's bank
loan released to you in the event the transfer/deed of assignment signed
by you in favour of purchaser cannot be registered/is defective.
(f) Income Tax file reference number.
10. CKHT
form (required to be submitted by Vendor and Purchaser to Inland Revenue
Department under provisions of the Real Property Gains Tax Act 1976 (Act
169)(RPGT))
(1) Under the RPGT Act, you have to submit CKHT form 1 (for seller) and CKHT
form 2 (for buyer) within 30 days from date of your Sale & Purchase
Agreement.
(2) You can fill in the form and submit it yourself, or instruct the legal
firm acting in the Sale & Purchase Agreement to fill and submit same for
you, in which case you would have to pay its professional fees. If you
submit the form on your own, you must provide evidence of such submission to
the purchaser's solicitors i.e. an acknowledgment of receipt of the form by
the Inland Revenue Department.
(3) Some material information needed to be included in the form:-
(a) your income
tax reference number;
(b) copy of your previous Sale & Purchase Agreement to prove the price at
which you bought your house;
(c) your IC No. and correspondence address;
(d) expenses which you want to claim as deductions:-
e.g. receipt for your legal fees and disbursements incurred to buy your
house;
receipt for renovations done to house and receipts for agent's commission,
etc.
(4) An individual
is entitled to claim exemption from RPGT in respect of the disposal of one
private residence only in his lifetime.
Please consult your tax consultant on matters relating to RPGT.
11. Utility deposits
Make sure you make arrangements with purchaser to obtain refund of the
remaining deposits i.e. water, electricity, telephone etc.
12. For Apartments
Make sure you make arrangements to obtain the refund of deposits which you
have paid the developer. You would be required to provide the necessary
original receipts to obtain the refund.
13. Notification of Change of Ownership of House/Apartment to Local
Authority i.e. Majlis Perbandaran.
You or your lawyer must notify the Local Authority of any change in the
ownership of any house/apartment so that its assessment record could be
updated. It is an offence if you fail to notify the relevant authority.
14. Receipt of Balance Purchase Price
Generally, there would be a short time lapse between the payment of the
balance purchase price by the purchaser to your lawyer and the date when you
receive the balance purchase price from your lawyer depending on the
completion of documentation. Please seek clarification from your lawyer. |
