|Sale & Purchase of Houses|
|Wednesday, 13 April 2005 10:07am|
1. Information which a buyer should obtain when buying a house
1. Does it have a separate title?
2. Take a photocopy of the title.
3. Get a photocopy of :-
4. Make sure you deal with owner of house or his duly authorised agent. (such authority should be in writing). Any other person will not be able to make any binding commitment to you.
5.1. If the house/apartment does not have any title, then get evidence of the seller's ownership i.e. a copy of the Sale & Purchase Agreement (SPA) made by the seller with the developer when he purchased the house/apartment
5.2. If the seller is a Second/ Third hand owner, then he would have to give you:-
as proof that the seller is the owner of the house/apartment.
6. Did the seller take a loan to buy the property?
For most cases, the answer is "yes". In such a case, you should get the seller to provide you with the bank's statement of how much he still owes the bank (redemption statement). With the redemption statement, you would know how much money you can release to the seller and how much is to be paid to his bank to obtain a discharge of the property from the bank.
2. Information relevant to apartment
1) Maintenance and other charges that need to be paid to developer/management committee. You should check that seller is up to date with his payments and there are no arrears due to developer/management committee.
2) If the apartment has no strata title, the purchaser must notify the Developer of the assignment after the completion of the sale.
3. Housing Schemes that are developed by Statutory bodies e.g. Penang Development Corporation (PDC), Perda, PKNS, etc
1) The SPA of such schemes may have restriction on the buyer selling the property i.e. it could not be sold within a stipulated period or without the consent of the government.
2) The title to the property may have restrictions. (the restrictions could be read from the title or search of the title) e.g. property cannot be transferred or charged without State consent.
3) The consent application may take a few months to be approved.
4. Documents you need to sign
1) Sale & Purchase Agreement;
2) CKHT form (form required to be submitted by Vendor and Purchaser to Inland Revenue Department) (now exempted)
3) Stamp Duty form;
4) Transfer form 14A. (If title is issued);
5) Deed of Assignment (if title is not issued).
5. The process involved in getting you registered as the owner of the property (in cases where title is issued)
1) Both seller and buyer sign transfer form 14A.
2) Lawyer sends transfer form to Stamp Office for adjudication to ascertain how much stamp duty is to be paid.
3) Stamp Office then stamps 'transfer form' for a nominal value of RM10.00 and returns transfer form to lawyer.
4) Stamp Office then informs Valuation Department of transaction. Valuation Department then values property and informs Stamp Office of valuation.
5) Stamp Office then issues PDS form to the lawyer. Buyer is normally given three (3) to four (4) weeks to pay stamp duty failing which, a penalty would be imposed.
6) Lawyer collects stamp duty from purchaser and proceeds to stamp transfer form. It may take about a week for the Stamp Office to return the lawyer the duly endorsed form. After stamping transfer form, lawyer presents the transfer form to the Land Registry/Office for registration. On presentation, you would be the registered owner of the property. However it may take several months (depending on which Land Office) before the physical title is returned by the Land Registry/Office. With the computerization process recently implemented in all Land Offices/ Registries in the country, the process is expected to be shortened.
If you obtain a loan from a bank to buy the property, the title would be sent to the bank. You should get a photocopy of the title from the lawyer for your record.
6. How is stamp duty calculated?
For the transfer/assignment (if no individual title is issued), based on the adjudicated value by the Stamp Office:
Stamp duty on a Charge is RM5.00 per RM1,000/- or part thereof of the loan amount e.g. Loan of RM100,000/-, stamp duty is RM 500/- on the original. The stamp duty per copy of the document is RM10/-.
The assessed value is the value assessed by the Valuation Office based on the purchase price or the market value of the property, whichever is higher.7. Appointment of Lawyers
1. You have the right to appoint a lawyer of your choice to act for you in any transaction whether it is a purchase from a developer or an individual. After all, legal fees etc, are borne by you. You should ascertain that:-
Verification of the above can be done with the Bar Council.
Each party to the transaction is advised to retain separate lawyers to protect their respective interests.
A lawyer can:
Can a lawyer act for the seller, buyer and the buyer's lender?
A lawyer may only act for one party in one transaction, but may witness the execution of any documents/instruments by any party. A sale and purchase is one transaction and a loan is another separate transaction. Therefore a lawyer can act for a seller or buyer, and also a lender or borrower. However, the solicitor concerned should have regard to any possible conflict of interest situation.
Lawyers are bound by the Solicitors' Remuneration Order 1991 (SRO) and there are scale fees for all conveyancing transactions and secured banking transactions done by a lawyer.
Lawyers are not allowed to give any discount. If any lawyer gives a discount on the scale fees, he could face disciplinary action.
There are fixed scales for lawyers' fees if you, as a seller or buyer, engage a lawyer. (stated herein is for fees only and does not include disbursements).
8. Lawyers' Fees
Click here for the scale of professional fees chargeable by lawyers.
9. House Seller's Guide
Documents/ information you must provide buyer/buyer's solicitors
10. Utility deposits
Make sure you make arrangements with purchaser to obtain refund of the remaining deposits i.e. water, electricity, telephone etc.
11. For Apartments
Make sure you make arrangements to obtain the refund of deposits which you have paid the developer. You would be required to provide the necessary original receipts to obtain the refund.
12. Notification of Change of Ownership of House/Apartment to Local Authority i.e. Majlis Perbandaran.
You or your lawyer must notify the Local Authority of any change in the ownership of any house/apartment so that its assessment record could be updated. It is an offence if you fail to notify the relevant authority.
13. Receipt of Balance Purchase Price
Generally, there would be a short time lapse between the payment of the balance purchase price by the purchaser to your lawyer and the date when you receive the balance purchase price from your lawyer depending on the completion of documentation. Please seek clarification from your lawyer.