CONTENTS
■ Sale and Purchase
■ Caveat
■ Charge
■ Lease and Tenancy
Introduction
■ Conveyancing 转易 is the act of transferring the legal title in a property from one person to another
■ To ensure that the purchaser secures the title with all the rights that run with the land.
Overview of Property Law in Malaysia
■ The land registration system: the State Land Offices and coordinated by the Department of Land and Mines.
■ Properties can be either:
(a) Freehold – held in perpetuity
(b) Leasehold – land owned by the state and leases are for a term of usually for 30, 60 or 99 years.
(c) Malay Reserved Land – the buying and any subsequent changing of ownership is restricted to Bumiputeras only.
Title
■ Freehold or leasehold properties are either issued with:
(a) Master Title –more than one unit of property is constructed. Eg. registered in the name of the developer. The developer may submit an application for subdivision of the master title.
(b) Individual Title – issued under the NLC for land, houses, commercial properties that are commonly not multi-storey; or
(c) Strata Title – issued under the Strata Titles Act. Issued for multi-storey buildings e.g. apartments, condominiums, commercial properties and now even for houses in gated and guarded communities.
S&P Transactions
■ The conveyancer to gather all the relevant facts and information before drafting the S&P agreement.
■ To give appropriate advice
■ To establish whether the purchaser intends to purchase the property form the developer or sub-sale transaction.
Buying with Cash or Loan
■ The cash purchaser:
1. To procure written confirmation from the D to ensure the property is free from encumbrances.
2. In the event that the property is charged, shall request from the D’s bank a redemption statement cum letter of undertaking before paying for the purchase price.
3. The purchaserpay the redemption sum directly to the developer’s bank and subsequently request the bank to acknowledge receipt of the payment via a letter of disclaimer.
■ The Loan Purchaser:
■ Who pays for the property with a bank loan.
■ It is subject to the bank’s own internal and credit assessment guidelines.
Overview Of The Sale Process
■ Offer to Purchase
■ Payment of first 10% of Purchase Price
■ Signing of the (SPA), Deed of Mutual Covenant (DMC) (if applicable), MOT (if sub-divided title issued)
■ For non-Malaysian, they are required to seek approval from Economic Planning Unit (“EPU”) (if applicable) and consent from the State Authority
■ Accepting the bank’s LO and signing the loan documents
■ Payment of the balance PP either by cash or loan
■ Delivery of Vacant Possession
■ (Within 24 month for Schedule G or 36 months for Schedule H)
Property from the Developer
■ S&P shall be in accordance with Housing Developers (Control&Licensing) Act 1966
■ If landed prop: Schedule G
■ If subdivided building eg. apartment or landed strata: Schedule H
■ Defect Liability Period: 24 months
■ Management Corp: Joint Management Body formed under the Building and Common Property (Maintenance and Management) Act 2007.
Sub-Sale Transaction
■ It is governed by the law of contract.
■ T&C of the S&P need to be negotiated between the parties.
■ The payment of purchase price is usually made within 3 months from date of SPA provided that no restriction of interest on the title.
Preliminary Issue to be Considered
■ Property with an individual issue document of title landed or strata
■ Property without title, has yet to be issued.
■ Leasehold or freehold
■ Subjected to any restrictions, liens, caveats, and charges.
■ Individual purchaser or multiple purchasers
■ Foreigners
Preliminary Searches
■ Land title
■ Bankruptcy search
■ Other searches
■ Bank Statement: if property is still under bank financing.
Land Title Search
■ To ascertain:
■ The existing proprietor of the property
■ Property is encumbered or not
■ Any restriction in interest
■ Any type of caveat
■ Land acquisition
■ Freehold or leasehold
■ If leasehold, expiry date of the lease
■ Chargee of the prop
Bankruptcy and Winding-up Search
■ Search on the vendor- if bankrupt, unable to sell. OA would stop into the vendor’s shoes.
■ Search on the company.
■ Register and Search at (cost at RM12):
■ www.e-services.com.my ■ www.myeg.com.my ■ www.rilek.com.my
Company Search
■ To ascertain who the directors and shareholders of the co.
■ Registered address and business address.
Drafting the S&P Property with Title
■ Parties to the Agreement
■ Recitals
■ Deposit sum
■ Condition precedent
■ Mode of payment
■ Time Period
Drafting of the S&P without title
■ Essential preliminaries
■ Recital (bacaan)
■ Mode of Payment
■ Documentation and execution of documents
■ RPGT
■ Redemption of the property
■ Lodgment of private caveat by purchaser
■ Non-perfection of the deed of assignment
■ Documentation and execution of documents affecting the transfer
■ Procedure for redemption 赎回 form the existing chargee.
■ Release of monies of balance purchase price
■ Supervening Events 超级事件
■ Vacant possession
■ Miscellaneous clauses
Stamp Duty
■ Stamp Act 1949=is levied by the govt on instruments of transfer.
■ Property transaction= ad valorem (according to the value)
■ MOT and DOA:
■ 1st RM100k=1%
■ RM100,001-RM500,000= 2%
■ Any amount excess of RM500k=3%
■ Charge: Loan sum=0.5% each copy=RM10.
RPGT
■ Gains from disposal of residential and commercial properties are taxed under the RPGT.
■ Objective: to control speculation in landed property and to curb any excessive rise in real prop.
■ It depends on the holding period of real properties.
■ Exemptions:
■transfer between husband and wife;
■transfer between parent and child; and
■transfer between grandparent and grandchild.
Caveat
■ Caveat is endorsed on the Issue Document of title
■ Notice to the world that the person entering the caveat has a claim to an interest in the land.
■ Prohibits any further dealing on the said land
Caveat
■ Private caveat: S 323 of NLC
■ Lien Holder’s Caveat: s 322, if there is an issued document of title which has been deposited as security for loan. Form 19A
■ Trust caveat: s 332, may be entered by the R upon application by the trustees. Form 19E (Perpetual unless it is cancelled by the R.)
■ Registrar Caveat: S 329 (1), liable (bertanggungjawab) to pay compensation if suffers damage or loss arising from the wrongful entry of the private caveat.
How to Lodge Caveat
■ S 323 and 324 of the NLC:
■ Form 19B which has to be attested.
■ Private Caveat will bind the land for a period of 6 yrs.
■ Wong Kuan Tan v Gambut Dev Sdn Bhd
■ The caveator must satisfy the court that he had caveatable interest in the land
■ Mexaland Dev Sdn Bhd & Ors v Score Option Sdn Bhd & Ors
■ Merely relying on the Joint-venture agreement did not confer a caveatable interest.
Conditions to extend the Caveat
■ 1. Sufficient grounds for caveat- The onus of proof is on the caveator.
■ Kumpulan Sua Betong Sdn Bhd v Dataran Segar Sdn Bhd
■ A. The applicant must satisfy that he has a ‘caveatable interest’ in the land.
■ B. the evidence
■ C. to show on the balance of convenience
■ Urethane Systems Sdn Bhd v Quek Yak Kang
■ No caveatable interest as the claim was based on monetary loss. ■
Withdrawal of a private caveat
■ S 327
■ 1. by the caveator: s 325: Form 19G
■ 2. by the Registrar: s 326: Form 19C
■ 3. by an order given by the court.
Removal of Caveat
■ S 325: by giving notice in form 19G and paying the prescribed fee.
Removal of Caveat
■ By the Registrar: S 326 of the NLC
■ Procedure: Form 19H and pay the prescribed fee
■ Upon receiving, the Registrar will serve a notice of intended removal in Form 19C
■ To extend Private Caveat: s326C for an extension order to the court.
Removal of the Caveat
■ By the Court: S 327 of the NLC
■ The only parties are caveatee and caveator “the aggrieved parties”.
■ Luggage Distributors M Sdn Bhd v Tan Hor Teng & Anor
■ If grounds are insufficient, the caveat must be removed.
Charge
■ Security over the land.
■ Must be registered in the land office in order to be valid, enforceable and binding.
■ The chargee has the right to apply for an order to foreclose the land.
Entering a Charge
■ S 241 NLC, a charge may be entered on the whole but not a part only or the whole but not a part only of any undivided share or any lease.
■ Form 16A- to secure the repayment of a debt.
■ For a company to register: File in the form 34 of the Companies Act 1965 within 30 days of the creation of charge pursuant to S 108.
■ The registration of charge will create indefeasible interest for the chargee.
Chargee to apply for order for sale
■ The chargee has the right to sell the property in the event the chargor is unable to repay the debt.
■ S 254 (1):
■ Breach for at least 1 month or such alternative period as specified in the chargee;
■ The chargor must be served a notice in Form 16D
■ Upon the expiry of the such notice, the chargee would have the right to apply for an order for sale of the land
■ S 255: Payable on demand- Form 16E- 1 month still not paid- order for sale without F 16D.
The Tribunal for Home buyer Claims
■ Easier, cheaper and faster means of dispute resolution.
■ a) Aclaim is filed no later than 12 months from the date of:
■ (i) issue of the Certificate of Compliance of the property; or
■ (ii) the expiry date of the defect liability period as set out in the SPA.
■ b) The SPA-housing accommodation built in a residential area.
■ c) Each claim does not exceed RM50,000 per cause of action unless
■ (i) the claimant agrees to forgo the balance of the claim; or
■ (ii) the acquiescence of the developer is obtained in writing for the matter to be heard at the Tribunal.
■ d) SPA is signed before 1 December 2002 can also be considered provided the claims fulfill the criteria stated above;
Tenancy and Lease
■ Lease: the lessee holds an estate in the land during the term of the lease. An interest or estate in land confers the lessee with ownership of the leasehold estate during the term of the lease.
■ S 5 of the NLC: lease- registered lease or sublease of alienated land.
■ S 213 tenancy exempt form registration=
■ 1. tenancy or subtenancy for a term not exceeding 3 years- s 223
■ 2. tenancy or subtenancy not exceeding 1 year- previous land law .
Differences between a Tenancy and a Lease
■ Lease:
■ must be registered under s 222 (1) of the NLC
■ Exceeding 3 years
■ Where any sub-lease relates to a part only of any alienated landnot exceed 30 yrs.
■ Tenancy:
■ Less than 3 years, s 213
■ Subtenancy must not exceed 3 yrs and/or the tenancy period
Differences between a Tenancy and a Lease
■ Lease:
■ must be registered under s 222 (1) of the NLC
■ Exceeding 3 years
■ Where any sub-lease relates to a part only of any alienated landnot exceed 30 yrs.
■ Tenancy:
■ Less than 3 years, s 213
■ Subtenancy must not exceed 3 yrs and/or the tenancy period
Tenancy Agreement
■ S 223 (2): may be created verbally or in writing
■ Identify the landlord and tenant correctly
■ The verify that the landlord is the actual proprietor
■ All proprietors, to execute the Tenancy Agreement
■ Inquire :
1. deposit sum
2. utilities deposit
3. the sewerage deposit.
■ Duration: not exceed 3 years.
■ Extension of tenancy period
■ Identify use of premise
■ Termination of the agreement
Case Study
Adorna Properties Sdn Bhd v Bonsoom Boonyanit (2001)
■ FC, Eusoff Chin, Wan Adnan, Abu Mansor Ali.
■ A purchaser in good faith and for valuable consideration is excluded from the application of the substantive provision of s 340 (3).
■ Such registered proprietor obtains immediate indefeasible title to the lands.
■ Even if the instrument of transfer was forged, the respondent nevertheless obtained an indefeasible title.
Tan Ying Hong v Tan Sian San &Ors
■ FC revisited the Adorna case. (Tun Zaki, Alauddin Mohd Sheriff, Arifin Zakaria, Zulkifli Ahmad Makinudin, James Foong).
■ Adorna is no longer good law and in fact wrong, uncertain, unjust or outmoded or obsolete.
■ The bench in the Adorna case had miscontrued s340 and applied s 340(2) which led to erroneous conclusion.
■ The court restored protection to original landowners from losing their properties to forgers.
Kump Sua Betong Sdn Bhd v Dataran Segar Sdn Bhd (1992) 1
■ SC (Jemuri Serjan, Gunn Chit Tuan, Charles).
■ An appeal from a judgment of the HC claiming the removal of a private caveat.
■ The HC granted the application to remove the caveat.
■ The SC allowed the appeal and the order is set aside.
■ The SC laid down the principals that a caveator has to show to the R when his private caveat is challenged.
Linggi Plantations Ltd v Jagathesan (1972)
■ PC (Lord Hailsham, Lord Hodson, Lord Cross)
■ Whetherr a vendor was entitled to forfeit a deposit paid on a contract following its noncompletion by the purchaser.
■ The terms of an agreement are to discover therefrom the intention of the parties.
■ When the ct decided on the issues of liquidated damages, rules of equity provide that the sum provided in the contract should in substance be genuine pre-estimate of the damages likely to be suffered and not a penalty
