During the Covid-19 crisis, many would consider a “lockdown” as the key to fight the pandemic. We, however, believe that “self-help” is the strategy for people to navigate the materials most relevant to their particular area of legal concerns during this time.
This article aims to provide a practical guide for selling your home or other properties.
Each phase of the process is outlined below:-
1. Property Title/ Strata Title
If you decide to sell your house, the first action is to get your property title (for landed property) or strata title (for high rise property or some property in gated community) ready.
Or, a photocopy, at the very least, which is still kept by the bank as part of the security for repaying your housing loan.
If your property does not have a property title or strata title yet, then provide a set of all the documents of ownership including the present and previous Sale and Purchase Agreements (especially Deed of Assignment (by way of transfer)) and a set of all past and present loan documents (especially Deed of Assignment (by way of security)), if any.
2. Gather all the latest receipts of payment:-
(a) to bills, such as quit rent and assessment;
(b) to utilities, such as water, electricity, and sewerage; and
(c) to other services of the property, such as maintenance, sinking funds, insurance and gas, etc.
3. Length of Time
Selling a home in Malaysia normally takes 2 to 3 months, if it is a freehold property.
The process can take longer if your home is a leasehold property, or if you have not obtained the strata title from your developer via the process called Perfection of Transfer.
4. Real Property Gains Tax
You may need to pay Real Property Gains Tax when you sell (or ‘dispose of’) a home whereas the stamp duty for transfer is to be paid by the buyer. Your RPGT rates and exemptions can be found here.
5. Find a buyer yourself
You may make an offer for sale online ‘subject to contract’ (this means the price can still be negotiated) via several free online advertising platform, such as Facebook Marketplace or https://www.mudah.my/.
An offer for sale would normally contain:-
(a) the sale price;
(b) the property description (address and freehold or leasehold title);
(c) fixtures and fittings (like electronic items, furniture and curtains) which are included; and
(d) any legal encumbrances or rights, like bank’s charge or conditions about using the property.
6. Offer to Sale
Once you have secured a buyer and the buyer principally agreed to your offer after inspecting the house together, you may propose an earnest deposit (normally 3%) to be paid to you.
Next, have the offer for sale signed accordingly with the buyer upon collection of the earnest deposit to ensure the basic terms contained therein are agreed to and legally binding.
7. Sales Agreement
You may then hire a solicitor or conveyancer to draft the sale agreement (with basic terms in the offer for sale included) and negotiate the details of the agreement with the buyer’s solicitors or conveyancer.
The sale agreement would normally have to be signed within 14 working days from the date on which offer for sale was signed.
7. Binding of Agreement
When both the buyer and seller are happy with the contract, they can both sign final copies, stamp and send the documents to each other. The sale agreement is legally binding once this happens. At this stage, usually neither party can pull out without paying compensation.
8. Completion of Sale
To facilitate the completion of the sale, your solicitor or conveyancer will deal with the remaining checks: –
(a) Documents for transfer ownership are handed over to the buyer.
(b) Money transferred from the buyer or buyer’s financier to the seller.
(c) The seller moves out and leaves the property in the state agreed in the contract.
(d) The seller hands over the keys to the buyer.
(e) The property now belongs to the buyer.
If you are buying a home, you may be interested in our article: Property Law in Malaysia: a self-help guide for buying a home.
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