Property transaction in Malaysia - Part 2

One of the idea I am toying with while writing the sequel to my book is the mapping of the many property transactions which are a staple of Malaysia property market. Again, this will be from the perspective of a lawyer and not from a housing developer, real estate agent or the authority (Malaysia's Taskforce to Facilitate Business called Pemudah has issued their own version). This is from years of experience and through what is garnered from the law of Malaysia.

I still don't know how I am going to present it in the book as my book is a question and answer series but here is a preview of the simplest property transaction in Malaysia. When a property buyer buys a property already issued with title from a housing developer and is paying it by cash. Am hoping for some feedback on this :

HOW DO YOU SUMMARISE

PURCHASE OF PROPERTY WITH TITLE

FROM A HOUSING DEVELOPER USING CASH

Purchaser pay 10% purchase price and sign Sale & Purchase Agreement

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Housing Developer signs

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Lawyer stamps the agreement and gives each party a copy of the agreement. Original copy should be handed over to the Purchaser

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Property is constructed according to the description of the property as provided in the Sale & Purchase Agreement. With each completion of the construction according to the Third Schedule of the Sale & Purchase Agreement, the Housing Developer will send a certification from his architect showing proof as such and request for payment to be made.

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Purchaser makes payment according to the progress claims send by the developer where the Purchaser has 14 days to do as such which can result in interest accrued if payment is late.

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Within 24 months, construction must be completed.

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When the property’s construction is 92.5% complete, upon fulfilling Clause 22 and 23 of the Sale & Purchase Agreement, vacant possession is handed over to the Purchaser and the Housing Developer can request for another payment to be made. Purchaser can now move in into his new property

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Housing Developer must deliver to the Purchaser the original individual title deed of the property with a valid and registrable Memorandum of Transfer. Purchaser must then register the property at the relevant land office and pay the full stamp duty as determined by Lembaga Hasil Dalam Negeri. Payment of 2.5% of the property can then be made by the Purchaser to the housing developer.

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The warranty period for the property will last for 24 months but payment of the final balance purchase price of 5% must be made to the lawyer(s) appointed by the Housing Developer as the stakeholder for the payment. Within this period, claim for any defect can be made and paid for by this stakeholder money as provided under Clause 25 of the Sale & Purchase Agreement

How did I published my first book?

The books I wrote

I saw a tweet yesterday by @self_publish : Instead of "I Published a Book," Tell "the Story Behind the Story". Interesting tweet right? And it made me realised the one common question by anyone who got to know me through social media as an author. I actually never think of myself as a great author and there is a valid reason for this. I always do badly in my grammar. I will always need a good editor. After I published my first book, I realised the point of having editors and how infuriating is an editor's job.

So, how did I published my first book?

I did write about it long ago but it was more of an announcement with a bit of the stories of how the book got published. The blogposts are; I wrote a book and now someone wants to publish it : the story of how proud I was that someone like Azizi Ali, a property investment writer wanted to publish my book; Before you buy that house ask your lawyer this : which was a draft of what the book is finally was and Writing workshop : the second blogpost ever for this blog which was the story of the writing workshop by Azizi Ali which led to him publishing my book. As they say, to have a blog is to keep a diary. If the journey is writing, I consider this blog as the map which charts it. It is where I drafted, mapped out and it is also where I sharpen my writing skill.

If you read any of the blogposts I listed above, it would show how I started my writing journey by going to the workshop offered by Azizi Ali. And if you go further back, you will get to know how I decided to go to that workshop as I thought I was already at a plateau which was a comfort zone in terms of work. I was thinking as I have read Azizi Ali's book since early 2000, I might as well learn something new on how to write a book by attending his workshop. I went to attend his workshop and then I went one step further. I pitched an idea for a book to him. A book which I know how to write and is about the lifeblood of my business : the conveyance of property in Malaysia, specifically on the function of lawyers.

With Azizi Ali, the man who decided to publish my book

After I went to the workshop on how to write books, I started writing. It was thwarted by my discovery of blogging. I became an avid blogger and I learned how to better my writing. I write on various issues about law and even wrote a few fictions spurred by events in my own life. I would post a blogpost every day. It took its toll on my book. I set to write my book in 2008 but by August 2009, I was still writing. When I got to know about a book by another lawyer writing within the same vein being published by Azizi Ali's publishing company, True Wealth Sdn Bhd in September 2009, I finally took the initiative by locking myself in my house for nearly a week, finalised the draft for the book and sent it to my publisher. That was the start of the editing process which saw the English version of the book to be published on 31st January 2010. The Bahasa Malaysia version took a much shorter time to write as I translated it myself and it was finally out by 1st May 2010. 

I guess what finally motivated me to finish writing is the need to beat another person from writing what I had in mind first. I never realised that True Wealth may talk to other writers out there who can write a similar title like mine. When it was published, I found out it was on Number 6 in a well-known local bookstore chain : MPH Bookstore. It is still being sold and can be bought online through that store or through my publisher, True Wealth online store : Book Planet. 

The lesson I learned is this from blogging and writing : Although I was engrossed in self-publishing myself on the internet, it didn't give me any returns unlike the two versions of my book which have been a form of marketing for my legal firm.

That, in itself, as they say, is another story....

Can I not make a stand?

For the past two weeks, the word on the street of Malaysia is the Bersih 2.0 which is the sequel to the Bersih demonstration which was organised in 2007. With the help of Wikipedia entry on Bersih 2007, it is done then to hand over a list of demand to our King, the Yang di-Pertuan Agung, considered as the highest authority in a democratic Malaysia. Some say, it was initially started by Hindraf, a group of the minority Indians who were demanding government to elevate their way of life for the better.

The rally was done through word of mouths and short messaging system which was the equivalent of Twitter in those days. Red herrings were used for the group to confuse the authority. The end result, due to the clashes between the protesters and the authority,  you can described the Bersih rally in 2007 in one word : Chaos. The end result they say is the biggest lost the Barisan Nasional government ever had in the General Election 2008.

That is what I know about Bersih (some which is there in the Wikipedia link and some from conversations I had with friends). And I did not participate. As I told my friends and on Twitter, what I remembered about the Bersih rally in 2007 is the joke being told in most of the show by Douglas Lim, a famous Malaysian comedian. It is the Malay and the Indians being the people in the rally but the Chinese couldn't be found as they are the one making money as they are the one selling the yellow t-shirts which were worn by the protesters that day.

And now they are going to do a Bersih 2.0 on 9th of July. Led by the former President of the Bar Council. From what I gather at the start, there was no political element. Just that the opposition was a part of it. Then it became a rallying point for the opposition. Then suddenly there was a road-show to gather support. Then it became global as similar rally is supposed to be done in New York (if I am not mistaken). It was like a Wow! How big can this thing go event. Will we see a Thailand type of revolution which does not go anywhere or like Egypt or Bahrain or Yemen? That is only the Bersih part of it. How about these other two opposing rally by Perkasa-led NGOs and UMNO Youth. Can someone say "Collision course"?

Or will the government managed to contain it? Interesting is the least descriptive word for anyone who is watching the event unfold on the sideline. They have remanded a bunch of people and they have just charged people with trying to restart the communist movement in Malaysia again. The word being used to charge them is "Waging war against the King" which was used once and resulted in an army-like Al-Mau'nah leaders to be hanged and imprisoned for life. The Prime Minister, the Deputy Prime Minister, the Internal Affairs Minister, the police and various people have issued warning and even issued threats to the rally organiser, to say the least.

People say as a lawyer, you need to be opinionated and you must fight for justice. Yes, that is what people expect a lawyer to be. I was a criminal lawyer once. It was during the most interesting time to in Malaysia politics. The firing of Anwar Ibrahim, the then Deputy Prime Minister and the supposed revolutions which comes after it. Hear the sarcasm in my words. I didn't involved myself in any of the street revolutions happening weekly then. So were most of my friends who are opinionated lawyers too living in Seremban. Although my then business partner was a member of the opposition. Although it was interesting to be there. And I am still a lawyer who considered lawyering as my profession. Am I a bad lawyer to not fight for a cause but just do my job?

So, I post this question on Twitter today : Can I support free speech but not #Bersih?

Here's my conversation on Twitter after I posted that question yesterday. I am using acronyms to protect the identity of all the tweeters who were conversing with me :

JL : Me too RT @kruel74: Can I support free speech but not #Bersih?

RF : Me too. I'm not supporting traffic jams + unnecessary bad press either. “@kruel74: Can I support free speech but not #Bersih?”

ML : @kruel74 isn't that the fundamental of democracy? We supporting what wr want to support?

SG :Yes, why not. I'm having a change of heart too about #Bersih. RT @kruel74: Can I support free speech but not #Bersih?
JZ : Interesting Q! RT @kruel74: Can I support free speech but not #Bersih?

S : @kruel74 but elections are not necessary clean so what are you doing about it?

LK : Free movement lah, boss. U dun support BERSIH's 8 requests, eg no corruption, clean elections, etc ?

RF :  XD Hence, the irony of "Bersih". Fighting something dirty with something that will cause a bigger mess.

S :  @kruel74 hmmm i always thought these inconveniences are to be suffered once in a while for the greater good :) :p

RF : @kruel74 Haha...wish they were well planned. Prefer a higher conspiracy of justice more than an annual show ;p

B : @kruel74 so how you think they should fight it so it will not turn into bigger mess?

S : @kruel74 hmmm i always thought these inconveniences are to be suffered once in a while for the greater good :) :p

B : @kruel74 I am alway wary of the 'greater good' part, depending on who, when, how it is said :P

CT : @kruel74 most of the time this "bigger mess" are police-led :D

RF :Takes two hands to clap :)

B : from what I experienced or watched in those rally clips, more like one hand forcing the other to clap

B : that is expected.

B : engaging each other despite some disagreements is a good sign of upholding free speech.

RF : Oh, the other hand clapped back, but it's not a desired response XD

B : hard to clap with unequal hands :P

RF : It's equal alright. Just not properly clapped XD

S : how it is equal? 1 of d hands definitely has more advantages. The body prefers it more to call d shot

B: This requires offline discussion la. Clearly 140 chars isn't enough.

R : i support free speech, n rights to assemble also. if police allow,sure no problem '@kruel74 Can I support free speech but not #Bersih' 

In between those conversation, I did inserted these conversations to probe further discussions :

@kruel74 : Just curious how free speech is wholehearted supported by some but selectively by others

@kruel74 I think fr this healthy discussion we can see there is a divide abt how change shud be made

@kruel74 : Online discourse is a start, logistically easy n more participants can join in or at least observe

The simple point I am to make here is that, some just think we already have a clean and fair election. Some think there's a problem with the system but marching around town is not the answer or the solution to repairing it. Some think we need to remind the government of the need to ensure a fair and just election. Some think that ballot boxes is the answer to the problem we are having and 2008 has shown the way by an unprecedented opposition wins over the government they can only dream about. Some just want it to be done and over with. Most actually to me are the silent majority which people keep on harping as the one who really matters.

Oh yes, this is also an opinion. Opinionated enough?

Joint Management Body / Committee Part 2

Continue from Joint Management Body / Committee First Part

The power to form and to govern the Joint Management Body comes from the Building and Common Property (Maintenance and Management) Act 2007. A Joint Management Body must be established within twelve months from the handover of vacant possession from the housing developer to the buyers. It is the responsibility of the housing developer to convene the first meeting which agenda has been spelled specifically in the Building and Common Property (Maintenance and Management) Act 2007 including how many quorum is needed for the meeting to be legal, the election of the office bearers, how much the maintenance charges to be charged to all buyers, taking over of insurance of the buildings from the housing developer and any matter in connection with the management and maintenance of the common property with the strata development. The Joint Management Body is a body corporate having perpetual succession and a common seal which needs to be registered with Commissioner of Buildings. It can sue and be sued. The Joint Management Body members are the developer and the buyers of the strata property.

The Joint Management Body will be managed by a Joint Management Committee or the office bearers which were selected at the first meeting which will act as the management for the whole strata development. The Joint Management Committee shall comprise of the housing developer and a minimum of five buyers and a maximum of twelve buyers. No one can hold office more than three years and a chairperson, a secretary and a treasurer shall be appointed among the committee members. The Joint Management Committee shall hold an Annual General Meeting every year and an Extraordinary General Meeting can be convened if a requisition in writing by one fourth of the buyers in the strata development or through a direction of the Commissioner or if the Joint Management Body thinks it is fit to do so. Basically, the duties and powers of the Joint Management Body are spelt out in the Building and Common Property (Maintenance and Management) Act 2007 which include the proper maintenance and spending of the building maintenance fund to manage the common property within the strata development, imposing, collecting and recover any charge on each units within the strata development, insuring the strata development and dealing with any insurance claims, keeping a record of all the buyers in the strata development, maintaining and auditing an account which relates to the building maintenance fund and to make, enforce and regulate the house rules to manage the strata development properly. 

To be continued where I will be commenting on the JMB / JMC

Joint Management Body / Committee

The Joint Management Body is only relevant to strata title development which has not been issued strata title. As individual title for strata housing development will only be issued a few years after the buyers get the vacant possession of the property, the management of the strata development will be in the hands of Joint Management Body.  Joint Management Body or its acronym known as JMB is still a very new concept in the Malaysian property landscape after the amendments to the Housing Development (Control and Licensing) Act 1966 and the introduction of the Building and Common Property (Maintenance and Management) Act 2007. Amendments were also done to a few other Acts of Parliament such as Strata Titles Act 1985, Street, Drainage and Building Act 1974 and Architect Act 1967, among others. Most of the amendments were   related to the final approval of a housing development and the management of strata development before strata titles is issued and a proper management is formed under the Strata Title Act 1985.

In order to understand the position of Joint Management Body, we need to see the law before the amendment. Before 2007, when the buyer of a strata property gets vacant possession, the management of the property will be in the hands of the housing developer who built the property. Until the strata title is issued, the buyer will pay maintenance charges and any other charges relevant to the property he bought to the management which is controlled by the housing developer. The management can be the housing developer itself or contracted out to asset management companies with licensed to do so. The management of a strata title property, using the money received from the buyers of the strata property will in turn manage the common facilities within the compound of the property. They will also pay third parties to insure the strata property, collect rubbish and ensure there is water being supplied to each unit of the strata property. All these responsibilities are spelt out in an agreement between the housing developer and the buyers called Deed of Mutual Covenant. When individual strata titles are issued to most buyers of the strata property, the management will then be passed to a body called Management Corporation.

As the arrangement before 2007 brought around a lot of problems for the buyers and even the management, which is basically the housing developer, through feedbacks received from all stakeholders, the government decided, a proper management comprising of the housing developer and the buyers need to be emplaced to manage strata property which has not been issued strata titles for each unit yet. That is where Joint Management Body comes in. Joint Management Body is the management which comes into existence within one year of handing over of vacant possession of a strata property until the issuance of strata titles to owners of the strata property. Joint Management Body also has a government body to manage it and settle any dispute arising out of managing the strata property. As most disputes by buyers of strata property are the buyers’ complain on bad management of the strata development by the housing developer and as for the housing developers on the lack of awareness of the buyers on their responsibilities when they live in a strata development, the amendments in 2007 tried to address these matters.

....to be continued in Part 2

7th World Islamic Economic Forum (a post mortem)

I am now back in the office after more than a week in Kazakhstan for the 7th World Islamic Economic Forum. Imagine my surprise when most of my social media friends are interested whether the Prime Minister was really marrying off her daughter than anything about his presence at the Forum or any of the bilateral meets he was in. That's politics I guess, which I am not a part of at all unlike those few personalities like Khairy Jamaludin whom I hung out with as we were attending events at the Palace of Independence, the venue for the Forum.

As a delegate of the 7th WIEF, what did I managed to garner? Some will say attending forums like this are a waste of time and will cost you a bomb. Some forums could be said to have caused me a dent but this one is considered the lesser of all those other forums. My real cost was the flight tickets I had to forked out. It would have been cheaper if not for the late confirmation by other Malaysian delegates which would have gotten us a cheaper deal for the flight tickets from Air Astana (the only Kazakhstan's national carrier). As for my accommodation, let just say I knew a few persons who allowed me to bunk-in with them. The fee of USD500 which are charged on any delegates

The 7th WIEF consisted of 3 days. On Day 1, it was the Young Leaders Network Forum and the Women Entrepreneurs Forum together with the Marketplace. The Young Leaders Network Forum targets those who wants to connect and meet with all those Muslims who have made it as CEOs and have been contributing to Muslims growth worldwide. We have speakers from Malaysia, Kazakhstan, banks, corporations, individuals, artistes, coordinators and NGOs. The Women Entrepreneurs Forum did the same but the issues are skewed towards women. These two forums finished in the afternoon at 5pm but most of the delegates stayed for the whole 3 days.

As for the Marketplace, showcase by visual artistes and performance are shown. Here are some of those performance :

Day 2 : Grand Opening by President of Kazakhstan, keynote speeches by Prime Minister of Malaysia, Vice President of Indonesia, President of Djibouti, Prime Minister of Azerbaijan and President of Islamic Development Bank. It was chaired by Tun Musa Hitam, the Chairman of World Islamic Economic Forum. Then the forums started in the afternoon and you had to make a choice of either going to two plenary sessions with regards to various topics or go to see more performances and talks about arts.

Day 3 : There were only plenary sessions which included one topic close to my heart as an Islamic finance practitioner entitled 'Islamic Banking : Raising the Bar'. They also had some scientific discussion about food safety, food security, halal industry and a few others. 

What I managed to gain :

1) Contacts from those who travel from Malaysia with me as we are stuck in the same airplanes, airports, hotels and conference halls;

2) Meet and greet with personalities I can only imagine trying to meet in Malaysia like ex-Prime Ministers, Ministers, television personalities, singers and such;

3) Meeting foreign delegates whom I either managed to garner businesses from or connect with clients of mine who were also there at the same time;

4) Promoting my books either among delegates or dignitaries;

5) To a lesser extent, manage to get to know new culture (and food);

6) Actually had a mini-reunion with a few of my schoolmates who have now become Malaysia foreign service officers;

Was it worth? Short answer : Yes. Long answer : Depends on what I do with all the contacts I have found there.

Here's the link to my book fanpage to see whom I have given my book to :

Malaysian personalities and my book

Islamic economy is all about risk

In 4 more days, I will be flying to a foreign land called Kazakhstan to attend the 7th World Islamic Economic Forum. I have heard of Kazakhstan but I never dream I will ever go there. Let us not start on the Borat references when people mentioned Kazakhstan. As there are a few of my friends going there, with their separate reasons, and most of them are on Twitter, we have been discussing what we may find there. It seems that one common theme we found out is that they have a very close relationship with horses. They ride them, use them in their everyday live and they even eat horse meat.

However, let us look at why at Islamic finance and Kazakhstan. Why would anyone would want to bring something new to a new frontier? Wouldn't it be risky if something goes wrong? Why don't we compete for a piece of the pie in London or New York? Or maybe even Singapore? At least, all these countries have the facility which will help Islamic financial institutions to gain footings and spread out. Anyone who knows about the politics of Islamic finance (yes, there is politics when you want to establish a strong foothold as the hub of anything to do with finance) will know why.

Malaysia has long want to establish itself as an Islamic finance hub. Our nearest competitor was once Bahrain. However, all those old-moneyed financial hubs like London, New York and Singapore wanted the oil-dollar which is synonym with Islamic finance. Kazakhstan is a new frontier. No one actually know what to expect from this country. What people know is that they were part of the former Soviet Union and they have oil. So, why don't Malaysia take a risk and market our expertise as the expert in Islamic finance. And no one can deny that as we have a lot to offer in Islamic finance. It is much like the trip I did to South Korea with an Islamic bank in Malaysia which is trying to introduce Islamic finance to South Korea.

Where do we stand in Islamic finance? We have Malaysia Islamic Finance Center which is basically a one-stop center for anything to do with Islamic finance. My second degree which comes from International Center for Education in Islamic Finance (INCEIF) is also a MIFC initiatives. Banks and other financial institutions have opened and are opening branches in Malaysia as fast as our Central Bank can issue them. Our own banks have forayed into other market and even our food franchises like KFC has break into new markets like India and Cambodia. And yes, also the World Islamic Economic Forum which is in its 7th year.

World Islamic Economic Forum wants to be the platform like World Economic Forum is. Group discussion, place for announcement of new initiatives for Islamic finance, roundtable discussion among the Islamic finance players either on the government level, authority level and Islamic financial institution level. It was held in Kuala Lumpur last year and I attended most of the forums. Other than forums, it also showcase talents like painters, musicians, filmmakers, artistes and thinkers in Islamic world under the Marketplace. That is why my friend Altimet, who can be considered as the Malaysian feel-good rapper with songs like Syukur and Kotarayaku, is going there too.

It is important to note that Islamic economy is not just limited to Islamic finance. Islamic economy include everyday commerce, food, creative endeavors and every commodities which conventional economy also trade in as long as it doesn't deal with anything prohibited by Islam like alcoholic drinks, pigs or any other things not allowed under Islam, free from any elements of riba', gharar and maisir. It must also be based on real economy in contrast of making money out of nothing such as speculation. The short version of Islamic finance principal is 'No Risk, No Gain'.

This time around as we are there while we are attending the forums, observing showcases and basically being in the thick of things, you can follow us on Twitter, Facebook and other social media links which you can add us on through the links below (just hoping we can get good internet connection) :

Links for updates :

Facebook : kruel74 Facebook
                   Ask The Lawyer Facebook page
                   Khairul, Suhaila & Hazlina Facebook page
                   Altimet Facebook page

Twitter : @kruel74 Twitter page
               @altimet Twitter page

And to know more about the 7th World Islamic Economic Forum, here is the link to their website : 7th WIEF.