Property Law in Malaysia: Perfection of Transfer

Introduction

Many buyers of the strata properties, such as apartments, condominiums, town houses, duplexes, flats, and commercial buildings, whether they bought directly from the developer or other properties’ owners, were often shocked by their lawyers’ calls subsequent to the completion of transaction for perfection of transfer; and perfection of charge if they were taking a bank loan to finance the purchase. 

Either procedures, will have to be done at the buyers’ own cost, be it legal fee, stamp duty and other miscellaneous charges or disbursements. 

This happened because when these buyers bought their properties, the strata titles to the properties have yet to be issued or delivered to the buyers. This is evident by them only entering into a deed of assignment (by way of transfer) as proof of their ownership.

The truth is, in Malaysia, the ultimate proof of our ownership to a property is the title or strata title instead of a deed of assignment (by way of transfer). A title or strata title is also called as ‘Geran’ or ‘Grant’ by many Malaysians.

Once there is the issuance of the strata title under the developer’s name, the perfection of transfer can then be processed by transferring the strata title unto the property’s owner name. 

Normally, the developer would write to the buyers and suggested them to go to a designated lawyer to deal with the process.

Be that as it may, buyers can actually appoint their own lawyer of choice in dealing with the same.

Obligation on Developer to Ensure Strata Title issued upon Delivery of Vacant Possession with effect from 1 July 2015

Post 1st of July 2015, such hidden process and cost in buying a strata properties are very much alleviated by virtue of the Housing Development (Control and Licensing) (Amendment) Regulations 2015 (‘the 2015 Regulations’) which set to further improve the rights and interests of house buyers.

It is now stated in the statutory sale and purchase agreement under the 2015 Regulations, i.e. Schedule H (used for property under construction) and Schedule J (used for completed property), that the manner of delivery of vacant possession to the buyer has been amended in which the buyer must be furnished with the Certificate of Completion and Compliance (‘CCC’) and strata title, failing which the developer will have to pay late delivery interest to the buyers.

Unless, the developer had obtained a written certification issued by the Controller of Housing from the National Housing Department to exempt the furnishing of strata title when deliver vacant possession. In which case, the Controller of Housing would impose a time frame for developer to ensure the delivery of strata title, normally 4 to 6 months’ time after the delivery of vacant possession.

The net effect is, perfection of transfer can be done upon delivery of vacant possession after the 1st of July 2015.

As compared to the statutory sale and purchase agreement prior to 1st of July 2015, such provision does not exist, thus issuance of strata title could be a matter of 2, 5, or even 10 years, depending on the developer’s initiative to apply for it.

Legal Fee for Perfection of Transfer

The legal fee for perfection of transfer is regulated under the Solicitors Remuneration Order 2005 (as amended), with effect from 15th March 2017, depending on the property’s purchase price or ‘consideration’ as follows. The mandatory scaled legal fee is subject to either 75% statutory deduction the appointed lawyer is also the previous lawyer representing the buyer in his/her purchase or 50% if it is not:-