May 10, 2011

Property Transaction in Malaysia - Part 1

 
One of the most common question that I am usually asked is how long does a property transaction takes. There is no straight answer to this question as the answer depends on a few factors :-

1) Who do you buy the property from? - If your answer is from a housing developer, then the answer can be found in the Housing Development (Control and Licensing) Act 1966. In this Act, it has been decided long ago when it came into force, a housing developer has 2 years to complete a property which has a title (called landed property once) and 3 years to complete a property without title (narrowed to strata property only once). However, if you buy a secondhand property from another person (which can be a company or an individual), the transaction can be more complicated and take a timeframe of 3 months to more than one year. It will further be complicated if the transaction involves auction property and the auctioneer is a financial institution;

2) Are you buying the property in cash or financing it with a housing loan? - When you buy from a developer, you will be billed according to how much has the property being built. If you can pay in cash, you can budget the time and the amount that you need to release according to the progress of the property being built. If you are taking a housing loan, what you have to worry is the amount that you have borrowed is released according to the billing, in which if the timeframe of 21 days is not followed, you may be charged with interest;


3) What type is your property? - Despite the belief all properties are created equal, that is rarely the case even if the property is situated within the same area. A landed property with an individual title is different from a landed property without title. A strata property with title is different from a landed property with title. A property with title, with a requirement for a consent to transfer, is different from a property with title, without a requirement for a consent to transfer. Each type has its idiosyncrasies and laws which govern how each type of property is transferred from one party to another;

4) Where is your property situated? - In Malaysia, as each states govern their own land law, it makes all the differences if your property is situated in Selangor or Kelantan. If your property has a requirement where you need to get a consent to transfer from the state government when you want to transfer from one party to another, it will take longer in one state than another. In Selangor, there was one time where each land office has a different application form and not all application form are created the same;


5) Who is the lawyer handling your case? - Last and not least, although many may not believe it, the choice of lawyer is important. As I always have and will always do, I advise them to check each and every lawyer they are or will be dealing with the Bar Council which has an updated website to the very day a lawyer is suspended or struck of the roll. However, as each service given by each lawyer or legal firm is subjective, you can only hope the lawyers recommended by the housing developers or that cousin who opened up his or her own legal firm can serve you in your property legal need. Especially if you are buying property in the secondary market or from an auction;

These are just guidelines but in my 12 years of practice, are true to a certain extent. Am trying to put this list into my book with more details.

3 comments:

building services in london said...

In its latest report for the Malaysian property sector, the research house said it remained particularly bullish on residential properties as house prices were likely to trend higher and volumes would scale new highs.Thanks for sharing the information.

kruel74 said...

With record breaking housing prices, people need to understand more when they buy property in Malaysia. Will update more

property finders london said...

I like the report.This site is growing more and more interesting with every new post..

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