June 30, 2011

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

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