Cheaper legal fees spells good
news for buyers
But they should engage their own lawyers to protect their interest
Jan 14: House buyers have welcomed the "significantly lower" legal fees for
standard Sale and Purchase Agreements (SPAs) which came into effect on Jan
1, 2006 under the Solicitor's Remuneration Order 2006.
The order, made under the Legal Profession Act, replaces the Solicitor's
Remuneration Order 1991.
In welcoming the move, the National Buyers Association (HBA), which has
pressed for a revision of the scale of fees payable to lawyers for housing
transactions, said the new rates will benefit those purchasing properties
that are regulated under the Housing Development (Control and Licensing) Act
"It will make ownership more affordable, and put to rest the generalised 'No
discount rule' that was implemented across the board for all conveyancing
practices," said HBA's secretary-general Chang Kim Loong (picture).
The fees for a standard SPA and the related financing documentation has been
reduced to a fixed sum of RM250 for property costing up to RM45,000. For
those costing more than RM45,000 but less than RM100,000, a 25 per cent
rebate has been introduced.
In the case of property costing more than RM100,000 but less than RM500,000,
a 30 per cent discount is permitted, while for unit of more than RM500,000,
it is 35 per cent.
Prior to this, purchasers of property worth RM300,000, would have to pay a
fee of RM2,500 made up by one per cent of the first RM150,000 and 0.7 per
cent for the next RM150,000.
However, with the 30 per cent rebate this is now slashed to RM1,785.
HBA's Chang said with the savings, more buyers should engage their own
lawyers to protect their interest, when entering into a purchase.
One lawyer, he said, cannot represent both the vendor and the purchaser. If
the buyer is using the vendor's or developer's panel lawyer, the lawyer is
not likely to represent the buyer against the bigger corporate client.
"Purchasing property is a big investment and buyers should make provisions
for legal fees to appoint their own lawyer in order to avoid problems later.
"While they may think that they cannot afford the services of their own
lawyer, consider whether they can afford not to. There is no such thing as
'free' or 'subsidised' legal fees... it is the strategy of the developer, a
gimmick to entice buyers and generate sales," he said.