Buying & Selling Properties in Malaysia

The perception that Conveyancing deals are straight forward is so far off target. It is remarkable sometimes how much Legal Firms involved in Conveyancing matters have to endure months of land administration issues and for fees below RM2,000.00

Clients sometimes fail to see that the volume and content of the work a lawyer has to do in Conveyancing deals are virtually the same irrespective the value of the Sale. A 10 million dollar Bungalow sale and a RM80,000 apartment deal, has similar problems and headaches to sort out.

Whilst the work may be the same, but it is not 'easy' same, but 'difficult' same. I hope that explains the situation in simple English.

Clients opine that work which is almost the same from one file to another, means it is easy. That is far from the truth, as even if the work is fairly similar, but if the similarity involves cumbersome paperwork and tiresome redtape at Land Office, the similarity is the only saving grace to the lawyer dealing that matter, knowing the work involved can be arduous and laborious.

An example we can offer here is this. If Mr X, a foreigner, buys Property at RM300,000-00 from Madam Y. And if the scenario involved a Leasehold Property (with restrictions) which requires consent from the Land Office, and the Property is sitting on a Master Title which is just about to be sub-divided into smaller individual title for each property in that Development project. So what will the Lawyer likely face?

This is just a possible scenario for the lawyer acting for Mr X the foreign purchaser:-

1. The consent from the Foreign Investment Committee (FIC) is required.

2. Once that consent is obtained, the Lawyer would have to apply for consent from the Local Authority under Section 433B of the National Land Code to allow a non-Malaysian to buy a Malaysian Property.

3. In the meantime, the Lawyer would have to also apply for consent from the same Land Office to obtain the necessary consent since the Property involved is a Leasehold Property with restrictions.

4. If Madam Y the owner, owes a Bank a loan, then the Lawyer would have to deal with Madam Y's Bank for redemption. If Madam Y has her own lawyer, Mr X's lawyer would then have to deal with Madam's Y's lawyer instead.

5. If Mr X is buying the property, financed by a Bank, then relevant and necessary undertakings must be extracted from all relevant parties.

6. If the process goes well and fine, the Lawyer would have to sort out the adjudication of Stamp Duty for Mr X to pay to transfer the title of that property from Madam Y to Mr X, through the Deed of Assignment between 2 parties

7. Since the Property involved is just about to be subdivided, the Lawyer would have to deal with the Developer involved. One pertinent question is, can the Developer do a direct transfer to the new buyer, Mr X, so as to avoid a double transfer ie, from Developer, subdivided and transfered to Madam Y, and then transfer again to Mr X?

This is just some of the work the Lawyer would have to deal. As you can see, it is not as straight forward as one think. And the amazing thing is that the Professional Legal Fee for all that work is RM2,550-00 (not taking into account service tax etc etc).