1

Sale & Purchase transactions in Malaysia - 3 types

Transaction with
developer not
Sub-sale transaction regulated by the HDA transaction
Housing
Development Act
No fixed terms & Regulated under Act
conditions - to be No fixed terms & 118 & 1989
negotiated by conditions – usually Regulations –
parties. dictated by prescribed contract
developer. of sale

Vendor’s solicitors to
prepare/supply SPA
unless otherwise
mutually agreed,
and solicitor
preparing SPA shall
not charge for
supplying SPA*
Developer’s
solicitors to Purchaser’s
prepare/supply SPA solicitors entitled to
unless otherwise complete set of SPA
mutually agreed, & all annexures from
and solicitor housing developer,
preparing SPA shall free of charge [Reg.
not charge for 11(4)]
supplying SPA*

*BC Ruling 16.01(7) 2

Different stages in a sub-sale transaction

• Is client buying or
selling?
Pre-contract
• Buying from
developer or a sub-
sale? Contract • After
completion,
includes
• Property with or • After registration
without title issued? execution of
SPA until
• Investigations on completion Post-
parties and completion
property.

• Drawing up SPA (in

the case of a sub-
sale)
3
Pre-contract stage

Identify issues in
transaction

SPA Identify
parties to
transaction

Investigate
Option
parties

Survey & Investigate

inquiries title
4
WQ 8 - Identify the issues in this transaction
(written answer)

Gordon, the Gordon and Dennis

• Ho Chin Soon deceased’s eldest son now at your office
(deceased) approached by and both wants you
registered Dennis Tan, who to act for them in the
proprietor of oil wish to purchase the transaction.
palm estate in lands at RM50
Melaka. million.
Dennis wants to
deposit RM100,000
• Held under 2 titles in cash with you as
with total area of stakeholders, as sign
150 acres. of good faith.

5
Answer WQ 8 –
Identify issues in a sale & purchase transaction

1. Property registered in name of deceased. Gordon needs to apply for

letters of administration or grant of probate.

2. 150 acres of agriculture land - estate land. Approval of Estate Land

Board under s. 214A NLC.

3. RM50 million – EPU approval?

4. Can you act for both parties?

5. RM100,000 in cash. Suspicious transaction? Anti-Money Laundering

Act?

6. RM100,000 with you as stakeholders? What are the terms of

stakeholding?

6
WQ 9 – Identify parties & who you are acting for

Kahoot!

Can a solicitor act for both vendor and purchaser in the same
transaction?

7
Answer to WQ 9 – Identify parties & who you are acting
for

Solicitor shall not act for more than one party in a transaction
[Rule 7(1) SRO 2005]

8
WQ 10 – Identify parties & who you are acting for

Solicitor acts for a purchaser in sale and purchase transaction and

vendor is not represented by a solicitor.

Vendor’s property charged to a bank.

Can the purchaser’s solicitor act for the vendor in the discharge of
property from the bank?

Kahoot!

9
Answer to WQ 10 – Identify parties & who you are acting
for

In a discharge of charge, solicitor is acting for the bank.

Note: A solicitor may prepare certain documents for another party to the
transaction
[Rule 7(2) SRO 2005]

10
Investigate parties

Capacity
(Proprietor, beneficial owner, personal
representative, trustee, or agent)

NRIC search,
NRIC/Passport/Co. No. company search
Permanent address, address in bankruptcy
Malaysia, registered office. search/winding-up
search

Citizen or non- Income tax file

citizen reference number

11
WQ 11 - Investigate parties – Power of attorney

Vendor in your office and

claims to be acting under
a PA granted by registered
proprietor.

List out steps or actions

you need to take before
determining that PA is
valid for the transaction
(written answer)

12
Answer WQ 11 - power of attorney

Check that:

1. PA properly executed under Powers of Attorney Act 1949;

2. PA authenticated in appropriate form in First Schedule;

3. True copy marked by Registrar of High Court and deposited in his

office.
What if
4. True copy registered with the land registry. donor is no
longer alive
or is a
5. Is donor still alive or adjudicated a bankrupt? bankrupt?

13
Power of attorney - death or bankruptcy of donor

PA is revoked by death or What is effect

bankruptcy of Donor of PA given by
(s. 5 POA 1949) a company and
the company is
subsequently
wound-up?

But, an irrevocable PA
given for valuable
consideration shall not
revoked by death or Mid Quantum Sdn Bhd v PTG Kuala Lumpur
bankruptcy of Donor. [2018] 6 AMR 74 (HC – July 31, 2018)
“Bankruptcy of donor” with reference to a
company means winding-up of the company.
14
Investigate parties – Capacity - Personal representative

Vendor claim to be personal

representative of estate of
Is property still registered in
deceased proprietor.
name of deceased?

Personal representative – means

Or
the executor (in a case with a
will) or administrator (in a case
without will).* Transmitted to personal
representative under s. 346
National Land Code?
*S. 2, Probate and Administration
Act 1959.

15
WQ 12 – Sale by personal representative (written answer)

16
 Answer WQ 12 – Sale by personal representative

Administrator may not

dispose of property
without previous
permission of the Court
[s. 60(4)].

Any disposition in contravention is

voidable at instance of any person who
Executor may dispose of has an interest in the property
property subject to restrictions [s. 60(6)].
imposed by the will [s. 60(3)
Probate and Administration
Act 1959].

Can executor dispose of

property if restricted by a will?
17
WQ 13 - Investigate parties-Bankruptcy

Can a bankrupt sign a

sale and purchase
agreement to sell his
property and execute
an instrument of
transfer in favour of
the purchaser?
(written answer)

18
Answer WQ 13 – Bankrupt’s capacity to contract?

 A bankrupt does not lose his capacity to contract –

 if bankrupt’s land has not been transmitted to the OA under the NLC, the
bankrupt can pass good title to a bona fide purchaser or chargee;

 the OA shall not be able to defeat the title of the purchaser or chargee. (1)

 If a bankrupt transfers his interest in land to a person before any

transmission is registered by OA, the bankrupt’s interest,
notwithstanding his bankruptcy, will pass to that person. (2)

(1) Re: Kwan Chew Shen t/a Syarikat Kaaf (Official Assignee of the property of Kwan Chew
Shen, a bankrupt v. Citibank NA) [1987] 1 CLJ 314).
(2)Re: Chua Tin Hong Ex Parte Castrol (M) Sdn Bhd [1997] 3 CLJ Supp 174.

19
Investigate parties – Bankruptcy

 Doctrine of relation back – bankruptcy of a debtor shall be deemed to

have relation back to the time act of bankruptcy was committed.

 Under doctrine of relation back, OA’s title and rights over bankrupt’s
estates commence from time of act of bankruptcy.

 However, under s. 349(3) NLC - no land shall vest in the OA under any
adjudication of bankruptcy until it becomes registered in his name.

 Note the amendments made by the Bankruptcy (Amendment) Act 2017

[Act A1534 – Gazetted on 18/05/2017].

20
Investigate parties – Bankruptcy

 A charge created by bankrupt before any transmission was registered

by OA will pass good title and interest to the bank .[Hock Hua Bank
Bhd v Choo Meng Chiong & Anor [1999] 5 MLJ 312 (HC)]

 However, although OA had not been vested with legal title of

bankrupt’s property by transmission under NLC, land may be vested in
OA in equity - court declared that the transfer by bankrupt is void and
subsequent charges by the transferee were also void. [Pegawai Harta
Koh Liang Hee, Bankrap v. Koh Thong Chuan & Anor [1997] 2 CLJ
Supp 241 (HC)]

 So, if a title search shows that land is registered in name of

Vendor but a bankruptcy search on Vendor shows that he has
been adjudicated a bankrupt, how will you advise the purchaser ?

21
Investigate parties - approval required for company to
acquire or dispose property – S. 223 – Companies Act 2016

22
Investigate parties
Restrictions on non-citizens and foreign companies

A foreign company Part 33A NLC

includes a Malaysian - restrictions
company if 50% or in respect of
more of voting shares non-citizens
held by non-citizen and foreign
or foreign company companies.

A non-citizen is a
natural person who is
not a citizen of
Malaysia.

23
WQ 14 - Investigate parties- non-citizens &
foreign companies
Kahoot!

Can a non-citizen or a
foreign company
acquire any property in
Malaysia without State
Authority Approval?

24
Answer WQ14 -Approval of the State Authority – acquisition by
non-citizen or foreign company – s. 433B & s. 433E NLC.

Acquisition or Conveyance or

433E
Note recent amendments

433B
Latest
amendments dealing requires disposal under s.
to 433B NLC by application to be 433E requires
NLC made by acquirer. application to be
(Amendment) made by the
Act 2016], person conveying
where or disposing.
acquisition by
a non-citizen
or foreign
company of
any category of
land requires
approval of Be familiar with the
State guidelines applicable in
Authority. each State
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Government Policy – EPU replaced FIC
Latest EPU guidelines effective 01 March 2014

1. Transactions that Acquisition of residential

requires EPU Approval. unit by foreign interest
valued at RM1 million and
(RM20 million and above) above does not require
EPU approval

2. Transactions
that do not
require EPU Falls under
Approval. purview of State
Authorities.

3. Transactions
exempted from
EPU Approval. Go to
http://www.epu.gov.my

26
Investigate title
Conduct title search (private and official)
Encumbrances & Acquisitions & other
Qualified or final title Category of land use
caveats endorsements

If computerised register document of title

Check that conditions in manual issue document Dealings presented but not registered
of title are same

Express conditions (syarat nyata)

Check compliance Restrictions on usage

Restriction-in-interest (Sekatan kepentingan)

Consent to transfer, consent to charge, bumiputera lot, etc
27
Searches

 Private searches under s. 384 NLC – any person may inspect & take
notes of or extracts from register of title and any instrument of
dealing.

 Official searches under s. 385 NLC – Registrar shall issue to applicant

a certificate of search under his hand and seal.

28
WQ 15– Private search

 TK Sdn Bhd decided to purchase piece of land from KR Sdn Bhd, who
represented that they are the registered proprietor of the land.

 Solicitors for TK Sdn Bhd conducted a private search which shows that KR
Sdn Bhd is the registered proprietor of the land which is free from
encumbrances or restrictions in interests.

 On the basis of this search result, KR Sdn Bhd signed the SPA and paid 10%
deposit (RM555,000) and applied to lodge a private caveat on the land.

 Private caveat was rejected by PTG for the reason that KR Sdn Bhd is not the
registered proprietor of the land which has not been alienated by the State.

 Can KR Sdn Bhd claim compensation from PTG for loss or damage by
reason of the error or omission contained in the private search?
 (written answer)

29
Answer to WQ 15– Private search

 Tirai Kristal Sdn Bhd v. Pengarah Tanah dan Galian Wilayah

Persekutuan Kuala Lumpur [2013] 6 CLJ 530 (computerised title search)

High Court held that:

1. Under a s. 384, the duty of care on whether to rely on the private search lies
on TK Sdn Bhd.

2. PTG is not entrusted with responsibility for losses suffered by TK Sdn Bhd.

3. Further finding of facts that transaction has not been conducted by TK Sdn
Bhd in a cautious manner.

4. Only on an official search under s. 385, will any purchaser who suffer loss or
damage by reason of any error in the certificate of search shall be entitled to
compensation.
30
Compare Pendaftar Hakmilik Pejabat Pendaftaran Wilayah
Persekutuan Kuala Lumpur & Anor v. Poh Yang Hong
[2016] 6 MLJ 413, FC

Plaintiff agreed to purchase land held under GRN 232.

Plaintiff’s solicitors conducted private search which
showed that vendor was registered proprietor.

Pending registration of transfer of GRN 232, plaintiff

found out that land he agreed to buy was in fact held
under PN 20992.

Same land was held under 2 different titles and PN 20992

was registered in name of a different person. Plaintiff sued
Registrar of Titles (PHT) for negligence - misrepresenting
true and actual particulars of land, failed to maintain
accurate records & plaintiff relied on information provided
by PHT.
31
Poh Yang Hong, FC

High Court – PHT liable for negligence & breach of statutory to

maintain accurate details of land – no difference between private
search and official search. CA affirmed HC decision.

Court of Appeal affirmed HC decision

Federal Court – PHT negligent for not maintaining proper

records which caused loss to plaintiff.
No difference in private and official search in a common law
claim of damages for negligence.
S. 384 or 385 does not exclude liability from common law
claim of tort of negligence
32
Survey & other inquiries

Whether need to conduct land

survey (area) or boundary
verification survey

Whether any proposed plans

for acquisition.

Whether planning Access

permission will be granted Whether any
for intended use buildings/structures or
squatters
33
Option

Option granted earlier? Earnest money paid?

If granted earlier – Time period to exercise option? Time
period to execute SPA.

• If option not granted earlier, consider whether to grant or

obtain option for more time to investigate.

• Option period.

• Consequence if failure to exercise option.

• Consequence if option exercised and vendor refuse to

proceed with SPA.

34
WQ 16 - Option

On 29/07/2009, V granted an option to your client

to purchase land from V and your client exercised
the option on 02/09/2009 (within the option
period).
Kahoot!

V did not accept SPA drafted by you and refused

to sign SPA and to transfer the property.

Negotiations took place for many years and finally on

30/08/2018 (after more than 9 years), your client sued
V for, inter alia, specific performance.

Limitation Act 1953 - an action founded on a contract

shall not be brought after expiration of 6 years from date
cause of action accrued.
Is your client’s claim barred by limitation period?

35
Answer to WQ 16 - Option

Filati Lastex Elastofibre (M) Sdn Bhd v. Nikseng Development

Sdn Bhd [2009] 8 MLJ 374 (HC)
&
Nasri v. Mesah [1971] 1 MLJ 32 (FC)

An action for specific performance on an agreement for sale of land or for

declaration of title to land is essentially an action to recover land.

S. 9 and not s. 6 of the Limitation Act 1953 applies and the limitation
period is 12 years from the date on which the right accrued.

36
During negotiations and correspondence

• Always “Subject to a formal contract”

Negotiations of terms until final draft has been agreed by
both parties

Letters and
• All letters, correspondence or
correspondence - communications issued or sent out on
a law firm’s letterhead must be signed
14.02 BC Rules & by an advocate & solicitor having a
Rulings 2015 current practising certificate.

37
Sub-sale transactions – date, parties and preamble

Date of SPA • Usually dated after all parties have signed.

• Description of Vendor (state capacity to

sell, e,g. as proprietor, as administrator or as
Parties trustee)
• Description of Purchaser

• Description of property
Preamble (Whereas) • Existing encumbrances, if any
• Intention of parties

38
Sub-sale transactions – SPA not regulated and subject to
negotiations – general main terms and conditions
Application of
Sale and purchase
Completion Documentation
consideration price/balance
purchase rice

Delivery of
Inspection of possession, Real Property
Default
property apportionment & Gains Tax
passing of risk

Representations,
warranties and Compulsory
Variation Time of essence
undertakings of acquisition
vendor

Costs &
Successors bound Mediation clause Notice
disbursement

39
WQ 17 – Consideration and purchase price
Ringgit or Ringgit Malaysia?

Kahoot!

What is the official currency of Malaysia?

40
WQ 17 – Consideration and purchase price

What is the official

currency of Malaysia?
In all the
schedule
contracts of
sale under Act
118 &
Regulations,
purchase price
Malaysian Currency (Ringgit) Act 1975
is stated in
(Act 160), official currency of Malaysia is
ringgit and not ringgit.
Ringgit
Malaysia.

41
Sale and consideration – normal provision

“In consideration of the sum of ……………………………(RM…………..) only (including a

sum of RM10,000.00 earlier paid by the Purchaser to the Vendor as earnest
money) hereinbefore or now paid by the Purchaser to the Vendor, as deposit and
part payment towards account of the purchase price herein (“the Deposit”), the
Vendor hereby agrees to sell and the Purchaser hereby agrees to purchase the
Property, with vacant possession and free from all caveats or encumbrances but
subject to the restrictions-in-interest and conditions of title (whether express or
implied), at a purchase price of ………………………..(RM……………….) only (“the
Purchase Price”) upon terms and conditions hereinafter contained.

42
Completion – Completion Period & Extended Completion
Period

 3.1 Payment of Balance Purchase Price

 The balance of the Purchase Price in the sum of ……………………..(RM……………..)

only (“the Balance Purchase Price”) shall be paid by the Purchaser to the
Vendor’s Solicitors, as stakeholders upon the terms of stakeholding specified in
Clause 4, within three (3) months from the date of this Agreement (“the
Completion Period”).

 3.2 Extension Of Time

 Notwithstanding the provisions contained in Clause 3.1, the Vendor shall grant
to the Purchaser an extension of time of a period of one (1) month (“the
Extended Completion Period”) to pay the Balance Purchase Price, provided
that the Purchaser shall pay to the Vendor interest on the Balance Purchase
Price or the amount still due to the Vendor, at the rate of eight per cent (8%)
per annum, calculated on a daily basis from the day next following the expiry of
the Completion Period until the date of actual payment, such interest to be
tendered together with the Balance Purchase Price or the amount still due, on
or before the expiry of the Extended Completion Period.
43
WQ 18 - Extension of time

1. You act for Vendor

2. Client wants the purchaser to make an application for extension of

time, if purchaser cannot pay within the Completion Period. No
automatic extension.

3. He also wants a provision in the SPA whereby he is ensured that he will

receive payment of the late interest when transaction is completed
without any hassle.

Draft an alternative clause for extension of time to cater for client’s

instructions (written answer).

44
Answer to WQ 18- alternative extension of time

 3.2 Extension Of Time

Notwithstanding the provisions contained in Clause 3.1, upon an application by

the Purchaser, the Vendor shall grant to the Purchaser an extension of a period of
one (1) month (“the Extended Completion Period”) to pay the Balance Purchase
Price or the amount still due provided that the Purchaser shall at the time of such
application for extension of time pay to the Vendor’s Solicitors, in advance, the
interest on the Balance Purchase Price or the amount still due for the whole
period of one (1) month at the rate of eight per cent (8%) per annum, and the
interest shall be apportioned to the Vendor on a daily basis until the date of actual
payment of the Balance Purchase Price or the amount still due and any excess
interest paid shall be refunded by the Vendor’s Solicitors to the Purchaser.

45
WQ 19 - Application of purchase price

1. You act for Purchaser.

2. You have proposed that in the event that the Balance Purchase Price or
any part thereof has been paid to the Vendor’s Solicitors, the Vendor’s
Solicitors shall only be authorised to pay the Balance Purchase Price to
the Vendor upon the registration of the instrument of transfer in
favour of the Purchaser.

3. Vendor’s solicitor cannot agree on release of balance purchase price

upon registration of transfer as it will take too long and client will not
agree.

Suggest an alternative term of stakeholding by Vendor’s solicitor to

protect the purchaser’s interest.
(written answer).
46
Answer WQ 19 - proposal to resolve deadlock on release
of balance purchase price
 In the event that the Balance Purchase Price or any part thereof has been paid
to the Vendor’s Solicitors, the Vendor’s Solicitors are hereby irrevocably
authorised by the parties hereto to pay the Balance Purchase Price or any part
thereof, to the Vendor

 (a) upon the expiry of fourteen (14) days after the date of presentation of the
Instrument of Transfer in favour of the Purchaser for registration; or

 (b) upon the registration of the Instrument of Transfer in favour of the

Purchaser, whichever is the earlier;

 PROVIDED THAT the transfer in favour of the Purchaser shall be deemed to

have been presented for registration upon the expiry of three (3) working days
from the date of receipt by the Purchaser’s Solicitors or the Financier’s
Solicitors, as the case may be, of the Completion Documents.

47
Documentation – Execution of instrument of transfer

“5.2 Execution of Instrument of Transfer

(a) Simultaneously with the execution of this Agreement, the Vendor shall
execute a valid instrument of transfer in respect of the Property in favour
of the Purchaser, which is fit for registration (“the Instrument of
Transfer”).

(b) The Instrument of Transfer shall be prepared by the Purchaser’s

Solicitors and shall be deposited with the Purchaser’s Solicitors, together
with a certified true copy of the issue document of title, for the purposes
of adjudication and payment of the stamp duty thereon, and the
Purchaser’s Solicitors shall hold the Instrument of Transfer as
stakeholders, upon the terms of stakeholding that the Purchaser’s
Solicitors shall not present for registration or caused to be presented for
registration, the Instrument of Transfer until the payment of the Balance
Purchase Price, unless the Purchaser shall have obtained a loan from the
Financier in which event the Purchaser’s Solicitors shall be empowered
to deliver the Instrument of Transfer to the Financier’s Solicitors, when
Clause 3.4 (a) has been complied with by the Purchaser.”
48
Where strata title has not been issued - no instrument of
transfer but deed of assignment

“5.2 Execution of Deed of Assignment

(a) Simultaneously with the execution of this Agreement, the Vendor shall
execute a valid deed of assignment in respect of the Property in favour of the
Purchaser (“the Deed of Assignment”).

(b) The Deed of Assignment shall be deposited with the Purchaser’s

Solicitors, for the purposes of adjudication and payment of the stamp duty
thereon, and the Purchaser’s Solicitors shall hold the Deed of Assignment as
stakeholders, upon the terms of stakeholding that the Purchaser’s Solicitors shall
not perfect the assignment until the payment of the Balance Purchase Price in
accordance with the terms and conditions of this Agreement, unless the
Purchaser shall have obtained a loan from the Financier in which event the
Purchaser’s Solicitors shall be empowered to deliver the Deed of Assignment to
the Financier’s Solicitors, when Clause 4.4(a) above has been complied with by
the Purchaser.”

49
WQ 20 - Real property gains tax

Kahoot!

You are now acting for a

Malaysian company in the sale What is the real property gains
of a property which the tax rate applicable to the
company acquired on disposal?
15/05/2014.

50
Answer to WQ 20 - Real property gains tax rates (Effective
01/01/2014) – disposal by company in the 5th year

Companies Individual (citizen or

• Disposal within 2 PR)
Non-citizen & not a PR
years – 30% • Disposal within 2 individual
years – 30%
• In 3rd year – 30% Disposal within 5
• In 3rd year – 30% years – 30%
• In 4th year – 20%
• In 4th year – 20%
• In 5th year – 15% Disposal after 5 years –
• In 5th year – 15% 5%.
• In 6th year or
thereafter – 5% • In 6th year or
thereafter – 0%

51
Real property gains tax
[Responsibility of acquirer (purchaser) w.e.f. 01/01/2015]
Withhold and
remit to DG
entire Otherwise
consideration; or purchaser shall
remit payment Failure –
to DG within an offence
3% of purchase price the 60 days in &
(whichever is lower) for CKHT 502 purchaser
citizens & permanent may incur
residents an
increase of
*for non-citizens ,
10%
increased to 7% w.e.f.
01/02/2018 [Finance (No. Unless purchaser
2) Act 2017 receives from
vendor, copy of
CKHT 3, within
Within 60 days from 60 days from
date of acquisition acquisition

52
Sub-sale – no strata title has been issued - Developer’s
confirmation

“5.4 Developer’s confirmation

The Purchaser shall at his own cost and expense obtain a written confirmation of
housing accommodation from the Developer pursuant to Section 22D of the
Housing Development (Control and Licensing) Act 1966 (as amended) in respect
of the Property ("the Developer’s Confirmation") of:- (a) full particulars of the
housing accommodation; (b) the postal address of the housing accommodation;
(c) the particulars of the current purchaser of the housing accommodation; (d)
the particulars of the current chargee or assignee of the housing accommodation;
(e) the total amount due to the developer under the sale and purchase agreement
as at the date of the confirmation; and (f) such other matters as may be
prescribed.”

53
No strata title has been issued - Certificate from joint
management body or management corporation, if applicable

“If applicable, the Purchaser shall at his own cost and expense obtain a
certificate from the joint management body (JMB) pursuant to s. 31 of the
Strata Management Act 2013, certifying:

(a) the amount of charges and contribution to sinking fund payable by a

parcel owner or proprietor;

(b) the time and manner of payment;

(c) etc, etc.

54
No strata title has been issued - Notice of assignment to
developer on completion – s. 22(D) Act 118

“Upon the Purchaser’s compliance of the provisions relating to completion

stipulated in this Agreement, the Vendor shall give to the Developer a notice of
assignment of the Property in favour of the Purchaser, such notice to be
accompanied with:

(a) a duly stamped copy of this Agreement;

(b) the Deed of Assignment between the Vendor and the Purchaser,
together if applicable with a letter of undertaking from the Purchaser to deliver
the duly stamped Deed of Assignment within fourteen days after the same has
been stamped; and

(c) full payment of all sums and outgoings due to the Developer under the
Principal Sale Agreement.”

55
Final phase of pre-contract stage

When final draft • Vendor’s solicitors engross fair copies

SPA agreed by • Deliver to purchaser’s sols for purchaser to
parties sign and pay deposit/balance of deposit

• Usually, purchaser signs SPA & 14A first.

Execution • Then, deliver to vendor’s solicitors together
with deposit/balance deposit.

• Usually dated after vendor (or the last party)

Date of SPA & has signed.
stamping
• Deliver to purchaser’s solicitors for stamping

56
Stamping of instruments

 Basic rule - stamp duty payable on instrument and not on transaction.

 S. 4 Stamp Act 1949 provides for all instruments specified in the First
Schedule to be chargeable with stamp duties specified in the Schedule.

 Common instruments under the First Schedule handled by a solicitor will be:
 Agreement under item 4;
 Charge or mortgage under item 27;
 Conveyance, assignment, transfer under item 32;
 Discharge of charge under item 39; and
 Release and reassignment of charged or mortgaged property under item
64.

57
Post completion stage
File change of File change of
name with local name with
Registration authority management
corporation
S. 160 Local
Ensure purchaser Government Act
is registered as In the case of
1976 – property held
registered
proprietor. under strata title,
duty of Vendor
Duty of seller and
purchaser, within 3
being proprietor of
Purchaser’s parcel to notify the
months of sale or
financier is management
transfer, to notify
registered as corporation of the
local authority in
chargee. change in the
Form I.
proprietorship of
the property for
Collect title and Seller continue to entry in the strata
deliver to be liable until sale roll, in accordance
purchaser or or transfer with paragraph
financier (with recorded in books 8(10)(g) of the
duplicate charge) of local authority. Third Schedule to
for safe custody Strata
Management Act
2013.
58
59
 Housing Development
(Amendment) Regulations 2015
[“HD(A)R 2015”]
01/07/2015
[P.U.(A) 106]

© Andrew Wong & Co 60

Sale by developer of any parcel intended to be held under
separate strata titles [s. 6 Strata Management Act 2013 (Act 757)]

Developer shall not sell Developer = residential,

any parcel or proposed commercial or industrial or
combination of such uses.
parcel

Question – if developer sell

without filing schedule of Unless a schedule of
parcels, is the sale valid or parcels has been filed
null and void? with COB

Failure to do so is an offence.
KPKT - No APDL without
schedule of parcels.

© Andrew Wong & Co 61

Rationale behind Schedule of Parcels (SP) –
Essentially to address 2 major issues.

To avoid dispute on
what are parcels and
what is common
property in a
development area.
To avoid non-payment
of strata survey fees
necessary for the
subdivision of
building(s) or land(s)
into parcels to be held
under separate strata
titles.

© Andrew Wong & Co 62

 Contents of schedule of parcels

Location plan, storey

plan & delineation plan

Legend of all parcels, all

common property & all
accessory parcels

In the case of accessory parcels,

legend to specify the parcels
they are made appurtenant to

Certificate by architect or
engineer that buildings are
Schedule of parcels to be capable of being subdivided
exhibited at all times in a conspicuous
position in developer’s office and at Certificate by licensed
such place where a sale is conducted. land surveyor that
buildings are capable of
being subdivided
© Andrew Wong & Co 63
HDA contract of sale to state name of solicitors acting for
developer or purchaser
New G & H contract of sale

Now required to state name of solicitors

acting for Developer or Purchaser (if none
state so).

Also required to state name of developer’s

solicitors who shall hold the last 5% of purchase
price as stakeholders for the developer for 8/24
months after date of vacant possession.

© Andrew Wong & Co 64

WQ 21 – Appointment of solicitors in a HDA transaction

• Developer has appointed your legal

Developer’s panel firm into its panel of lawyers for a
housing development scheme.

Kahoot!

• Developer wants you to act for the

purchasers.
Acting for purchasers
• Can you act for any purchaser in that
housing development?

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Answer to WQ 21 - S. 84 Legal Profession Act
Solicitor acting for developer not to act for purchaser

 S. 84 (1) - where solicitor acts for housing developer in a sale of

property under a housing development, neither he or any member or
any assistant of the firm may, in the same transaction, act for the
purchaser.

 Agreement prepared by solicitor for developer shall be scrutinised by a

solicitor acting for purchaser unless a certificate is obtained from
purchaser, signed before a Commissioner for Oaths, to state that he
does not wish to engage a solicitor (“the certificate”)

 BC Ruling 14.18(4) – when a solicitor acts for a developer and attests

signature of purchaser who is not represented by a solicitor, solicitor
acting for developer shall in addition to obtaining the certificate, also
inform purchaser in writing that he is not acting for the purchaser.

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Answer WQ 21 Solicitor in a HDA transaction

 BC Ruling on s. 84 LPA [Ruling 14.18(3)]

 Where a solicitor or firm of which he is a partner or employee is

appointed or empanelled as a member of developer’s panel of lawyers –
he shall be deemed to be acting for developer and he shall not act for
any purchaser in respect of any lot in the same phase of the housing
development.

 Example:

 If solicitor or his firm in on developer’s panel for Phase 1, he may not

act for any purchaser in Phase 1. If he or his firm is no longer on the
developer’s panel for any subsequent phase, he may act for any
purchaser in that subsequent phase.
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WQ 22 – Appointment of solicitors in a HDA transaction

• You act for the purchaser in a HDA

transaction.

• Developer will pay your fees for acting

Solicitors’
for the purchaser.
remuneration

• Can you be paid by developer when

acting for a purchaser in a HDA
transaction?

Kahoot!

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Answer WQ 22

BC Ruling on s. 84 LPA [Ruling 14.18(2)]

1. Solicitor acting for purchaser in the purchase of housing

accommodation under a housing development, shall not receive his
remuneration from the housing developer, and the developer and the
purchaser shall each pay for the fees of his own solicitor.

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 Housing Development (Control & Licensing)
(Amendment) Regulations 2015
P.U.(A) 106 dated 01/06/2015, came into force
on 01/07/2015.

A new Schedule H contract of sale.

Under new clause 27(1)(b), developer shall let

purchaser into possession of the parcel upon,
inter alia, the issue of a separate strata title to the
parcel by the appropriate authority.

© Andrew Wong & Co 70

WQ 23 – solicitor paid booking fee as stakeholder

Kahoot!

• Developer wants the

Your housing developer
client has not applied for
APDL and legally cannot
sell.
But developer approached
by many interested
purchasers who wish to
pay booking fees.
purchasers to pay
booking fees to you
as solicitors to hold
as stakeholders and Can a solicitor hold
when APDL is issued booking fees as a
contract of sale can stakeholder?.
be signed with
purchasers and
booking fee shall be
part of 10% deposit.

© Andrew Wong & Co 71

Answer to WQ 23 - beware of committing offences under
the HDA and HD Regulations

Regulation 11(2) – • Regulation 11B – Regulation 13 –

Contract of sale
No person, including
parties acting as
stakeholders, shall collect
any payment except as
prescribed in contract of
sale.
Fine not exceeding
RM50,000 fine or
imprisonment not
exceeding 5 years or to
both.
Incomplete contract Penalties
of sale
Any person who
• Any developer who knowingly and
execute contract of wilfully aids, abets,
sale in which any counsels, etc, the
particular required is commission of an
not completed shall be offence against the
guilty of an offence. Regulations shall be
liable to be punished
• Fine not exceeding with the punishment
RM10,000. provided for the
offence.

© Andrew Wong & Co 72