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).

Blogging & Defamation Laws

Blogging is a new phenomenon that has swept cyber space for the last 5 years or so. In fact calling it 'new' is not so accurate anymore, but the fact that new Blogs appear on a daily basis, and people seems to love to Blog about everything and anything under the sun, seems to suggest that there are still many people who are just discovering the use of blogging.

We have received enquiries before about Defamation and Blogging and our research of the law has lead us to this summary:-

1. That, one can be sued for defaming another on the Blog. It does not mean if you blog and defame, you get away with it.

2. A blogger must take precaution when writing, not to lower the estimation of other people about that person you are writing about. In another form, one may say you should not attack a person's character to the point that this person's reputation is adversely affected.

3. What about people leaving defamatory comments on the Blog? The position of the law at the moment, is not very clear, though cases have suggested that you can still be sued for defamation for 'publishing' the comment. We would strongly urge bloggers to moderate the Blog.

4. What about having exclusion clauses on the Blog? The Exclusion of liability clause will give notice to other people that your responsibility if limited, but the Courts have concluded in many cases that despite the existense of the Exclusion Clauses, one can still be liable for defamation.

If you are facing a defamation action for this, you may rely of a few Defenses, like fair comment, privilege etc.

To some extent defamation suits against bloggers can curtail free speech, but free speech must always be curtailed by common sense and good will. One should be responsible when blogging. If you dont wish to see some blogger defame you, you should not defame someone else.

For more information and more reading materials on this, you should read this comments on this Blog:-

http://www.xes.cx/MT/archives/2009/01/minimising_the_risks_in_bloggi.html

The law may change every now and then, and our summary above is base on our research till December 2008. Thanks.

How much do I have to pay for a Sale & Purchase Agreement of a Property?

The question above is a common question a legal firm receives from their clients.

Much have been said about the No-discount Rule of the Legal Fees for Sale & Purchase Agreements (SPA) and also Loan Agreements in Malaysia. Unlike Litigation Fees, Legal Fees for SPA and Loans are governed by Rules of the Bar Council, referred to as the Solicitors' Remuneration Order 2005 (SRO).

The intention of enforcing a fixed rule is to, inter alia, ensure:-

1. Customers know how much they have to pay and not be misled by lawyers;

2. That lawyers compete on quality of work as compared as to quantum of discount. The fact remains where large discounts are given, the quality of legal work for Conveyancing matters will deteriorate

Of course, there are arguments to the contrary, that lawyers are entitled to give discounts, particularly premised on supply & demand rules. Also, quarters who wish to vary the legal fees, contend that some Conveyancing transactions incur more working hours and the lawyer should be entitled to charge more.

However, as the Rules stand at the moment, potential property buyers/sellers out there should take note that legal fee is fixed. We append below the Fixed Scale Fee imposed by the Bar Council in the SRO, which this Firm is committed to adhere to. The Legal Fee depends on the value of the property, and the Fee will be calculated on a percentage of that value.

Value Legal Fee

First RM150,000 - 1%

Next RM850,000 - 0.7%

Next RM2,000,000 - 0.6%

Next RM2,000,000 - 0.5%

Next RM2,500,000 - 0.4%

Above RM7,500,000 - negotiable on the excess (but not exceeding 0.4% of that excess)

For more information of the SRO, please click the link below to the Malaysian Bar website:-

http://www.malaysianbar.org.my/index.php?option=com_docman&task=doc_view&gid=545&Itemid=332