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Registering Property in Malaysia

1. PRE-REGISTRATION : CONTRACT OF SALE


There are 2 types of sale and purchase of property namely:
1. Purchase from property developers

The sale and purchase of property (housing accommodation) which is under


construction from a property developer is governed by the Housing Development
(Control and Licensing) Act, 1966; or

The sale and purchase of completed property from a property developer.

2. Purchase of completed property direct from owner of the property (subsale)

Sub-sale purchase is between the buyer and the owner; it is by way of private
contract where the parties are free to dictate their respective terms and
conditions.

Regardless, a non-regulated contract of sale between the seller and the buyer needs to
be in written form, signed and duly stamped for the protection of the interest of both
parties in the discharge of their respective legal obligations. Both seller and buyer are
advised to appoint their own lawyer to represent them individually in the conduct of the
sale and purchase transaction through completion.
Some of the salient points of the Sale and Purchase Agreement (SPA) are:

Detailed particulars of the buyer and the seller;

Details of the property as specified in the Issue Document of Title (IDT);

The purchase price and the mode of payment;

Payment of the deposit, normally 10% of the purchase price;

Normally the time frame to pay the entire purchase price is within 3 months free
of interest (Completion Date) plus another one month extension period
(Extended Completion Date) with interest at a mutually agreed percentage
payable to the seller;

If the buyer fails to pay within the time frame, the deposit paid will be forfeited by
the seller and the SPA rescinded;

Inspection of the property and listing of any fixtures and fittings (if applicable);

The time and manner to hand over the property to the buyer; and

The remedy for any breach and liquidated damages for failures by either party.

Once detailed terms of the SPA have been agreed, the buyer and seller will
sign:

The SPA;

Form 14A under the National Land Code, 1965 (NLC) (for property with individual
title); or

Deed of Assignment (DOA) (for property without individual title).

2. STAGES OF REGISTERING PROPERTIES


There are 2 main stages in the process of registering property in Malaysia (Diagram 1).
These stages are geared towards registration of property (land and building) using
Memorandum of Transfer - Form 14A at the relevant Land Office / Registry in compliance
with the NLC.

Diagram 1 - Flowchart of Registering Property with Title

Note:

Valuation and Property Services Department / Jabatan Penilaian dan Perkhidmatan


Harta is established under the Ministry of Finance to advise the Government on
valuation of real estate, property development and management.

Stamp Office / RSC is a unit in the branches under the Inland Revenue Board of
Malaysia / Lembaga Hasil Dalam Negeri Malaysia (LHDNM).

Land Office / Registry is a department under the respective State Government

where the property is situated.

2A. PROCESSING STAGE

1. Adjudication of Form 14A / Deed of Assignment (DOA)

Form 14A / DOA will be submitted to Stamp Office / RSC for adjudication.

Submission can be made either manually or online through the website,


http://pinharta.hasil.gov.my under STPH or http://stamps.hasil.gov.my under
STAMPS. To date, e-Stamping is available to legal firms, banks, company
secretaries, accounting firms and companies.

Submission for Adjudication


I. Form 14A

II. Deed of Assignment

VALUATION OF PROPERTY

Valuation by JPPH is part of the stamping process by Stamp Office / RSC for cases
where valuation is required.

Upon receipt of the application for valuation from the Stamp Office / RSC, JPPH
will process the application and a valuation report will be prepared and
subsequently sent to the Stamp Office / RSC.

JPPHs workflow for the valuation process is shown in Diagram 2.


The time taken by JPPH to complete a valuation request is between 1 to 8 working days.
For Standard Property it takes only 1 working day. A longer period may be required if the
property is a complex property, for example shopping complex, multi-storey office
building or industrial complex.

STAMPING OF FORM 14A / DOA

The Stamp Office / RSC will issue a Notice of Assessment either manually or
online through STPH / STAMPS.

The Notice of Assessment will indicate the stamp duty payable for the transfer of
property.

The rate of chargeable stamp duty will depend on the value of the property as
prescribed by the Stamp Act, 1949, as follows:

Payment must be made to the Collector of Stamp Duty through the Stamp Office /
RSC within30 days from the date of the Notice of Assessment via the following: Electronically via Financial Processing Exchange (FPX); or
At the Stamp Office / RSC by:
- Bank Draft; or
- Clients Account Cheque; or
- Postal Order; or
- Money Order; or
- Cash.

A penalty will be imposed for payment exceeding 30 days from the date of the Notice of
Assessment as follows:

The Stamp Office / RSC requires the following documents:

Original Notice of Assessment and Form 14A / DOA;

Form PDS 3;

Bank Draft / Clients Account Cheque / Postal Order / Money Order / Cash; and

Payment by Setem Hasil which shall not exceed RM 500.00.

Diagram 2 - JPPH Workflow Valuation Process


2B. REGISTRATION STAGE
For registration of property, submission of the duly stamped Form 14A at the Land
Office / Registry must be accompanied with:

Original IDT (Issue Document of Title);

Certified copies of the buyers and sellers NRIC / passport; or

Company Memorandum and Articles of Association, Companies Commission of


Malaysia (CCM) Company Search, Company Resolution, Return of Allotment of
Shares - Form 24, List of Register of Directors, Managers and Secretaries - Form
49;

Fees as prescribed by the Land Office / Registry;

A copy of current Quit Rent and Assessment Receipt.

Checklist for registration of transfer of property at Kuala Lumpur Land Registry : (for
landed property with individual title)

The Land Administrator will endorse the name of the buyer in the Register
Document of Title (RDT).

The RDT is kept in the strong room at the Land Office / Registry itself.

The Land Office / Registry will subsequently issue a new IDT to the buyer within 1
working day from the date of submission.

All Land Offices / Registries in Peninsular Malaysia are committed to issue the new IDT

within the specified time frame.


Generally it takes 1 working day for registering of property. The process of registering
property at the Kuala Lumpur Land Registry is shown in Diagram 4.
Diagram 3A presents the workflow of the registration process at Kuala Lumpur Land
Registry (for consent to transfer involving leasehold property).

ASSIGNMENT OF PROPERTY
(for property without individual title)

No registration is required for properties without individual titles simply because


the Land Office / Registry does not have records of individual properties until the
individual titles are issued.

Properties without individual titles can be sold or change hands by means of a


document called the Deed of Assignment (DOA).

A DOA is a legal instrument used as a means of conveyance of rights to property


whereby the Seller (Assignor) assigns his rights and title to the property to the
Buyer (Assignee).

By the DOA, the Sellers rights, interest and title to the property as enshrined in
the SPA, usually called the Principal SPA (between the First Purchaser, the
Developer and / or Proprietor) is assigned to the Assignor.

Once the DOA is duly executed and stamped, the Assignee acquires legal rights
and title to the property assigned. The only difference is that it is not registered at
the Land Office / Registry.

The DOA has to be adjudicated in a similar manner as for property with title but
instead of Form 14A, the original copy of the DOA is submitted together with Form
PDS 15.

Diagram 3- Workflow of Registration Process at Kuala Lumpur


Land Registry
(for landed property with individual title)

Diagram 3A - Workflow of Registration Process at Kuala Lumpur Land Registry


[for consent to transfer involving property with restriction-ininterest/leasehold (if required)]

3. CONCLUSION
The initiatives taken have resulted in the following continuous improvements across all
government agencies involved as stated:
Duration of the transfer of property generally takes 2 working days for Standard

Property;
Simplified procedures via online system;
Easy tracking and traceability of the status of stamping process;
Cost efficient; and
Integrity of the system enhanced.

Further to the improvements made, Stamp Office / RSC has embarked on enhancing
STAMPS to further improve the stamping process of instruments related to transfer of
property.

The Land Office / Registry is moving towards simplified and standard forms for land
related transactions to be adopted by all states in Malaysia.
This joint effort by the public and private sectors as well as experts in their respective
fields contributed in improving the delivery system.

ick Links
Local Authorities
Board of Engineers Malaysia (BEM)
Board of Architects Malaysia (LAM)
Malaysia Institute of Architects (PAM)
Bank Negara Malaysia (BNM)
The Institution of Surveyors Malaysia
Master Builders Association Malaysia
Ministry of Finance
Green Building Index (GBI)
PEMUDAH
International Monetary Fund (IMF)
Performance Management and Delivery Unit (PEMANDU)
Department of Statistics Malaysia
Economic Planning Unit (EPU)
CIOB Malaysia
National Property Information Centre (NAPIC)
Ministry of Energy, Green Technology and Water
Ministry of Housing & Local Government (MHLG)
Earoph Malaysia
Rating Agency Malaysia Berhad (RAM)

No
.
1

Procedure
Lawyer conducts necessary searches

Time to
Associated Costs
Complete
1 day
RM 54

No
.

Procedure

Time to
Complete

Associated Costs

The parties will mutually agree on whose


solicitors will prepare the sale-purchase
agreement. The lawyer will usually conduct:
- Land search
- Bankruptcy Search
- Winding-up Search
The lawyer will carry out a search on the
document of title to the property at the land
registry/land office to ascertain, amongst
others, who is the registered proprietor of the
property, the category of land use of the
property, the conditions to which the property
is subject, whether the property is subject to
any restrictions, and also whether the property
is subject to any encumbrances (charges,
caveats).
Agency: Land office/Official assignee's office
Lawyers' professional fee
(not including service tax
and disbursements) for
preparing sale and
purchase agreement and
completing the transfer of
property is as follows:For the first RM150,000
of the purchase price - 1%
(subject to a minimum fee
of RM300.00)

Buyer and seller sign sales-purchase


agreement in presence of lawyer and lawyer
fills out Form 14A Memorandum of Transfer
The Memorandum of Transfer (Form 14A) has
to be attested by a licensed professional - can
be a lawyer or an official from the land office.
This is stated in the Land Code.
2

1 day
Documentation shall include:
- Memorandum of Transfer (Form 14A)
- Copy of the sale-purchase agreement
- Copy of title deed
- Form PDS15 (Stamping Proforma)
Agency: Lawyer's office

3 Memorandum of Transfer (14A) sent to Stamp 1 - 8 days


Office for adjudication of Stamp Duty and (online) or
valuation by JPPH
up to 20

For the next


RM850,000.00 - 0.7%
For the next
RM2,000,000.00 - 0.6%
For the next
RM2,000,000.00 - 0.5%
For the next
RM2,500,000.00 - 0.4%
Where the consideration
or adjudicated value is in
excess of
RM7,500,000.00 Negotiable on the excess
(but shall not exceed
0.4% of such excess)
no additional cost

No
.

Procedure

Time to
Complete

Associated Costs

The valuation department will conduct an


inspection to value the property, if required.
The inspection is not mandatory to conclude
the valuation and it is at the discretion of the
valuation department, but in practice, it takes
place in the majority of the cases. The Stamp
Office will issue a notice of assessment based
on the valuation departments report.
Submission can be made either manually or
online through the website
http://pinharta.hasil.gov.my. E-stamping
(online) is now available only to legal firms,
banks, company secretaries, accounting firms
and companies.
If completed online the submission must
include:
1. The sale-purchase agreement
days
2. Copy of the Issue Document of Title (IDT) manually
3. Form 14A
4. Form PDS 15
5. Other supporting documents
Once accepted, an adjudication number will be
assigned by the system. When the Stamp
Office receives the submission, the documents
are transferred to JPPH for valuation. When
required, a valuation inspection will be made
on the property by JPPH. In most of the cases,
commercial properties will be assessed. The
JPPH will prepare a valuation report which is
sent to the Stamp Office. The applicant will be
able to follow the status of the adjudication
online.
Agency: Stamp Office assessment and payment
system (http://pinharta.hasil.gov.my)
4 Payment of stamp duty and stamping of Form 1 day
14A
Stamp duty must then be paid to the Stamp
Office, based on the Notice of Assessment,
within fourteen (14) days from the date of such
notice or the period indicated by the Collector
of Stamp Duty. Usually the Collector will give
thirty (30) days from the date of such notice to
pay the stamp duty. This procedure may take

1% on first RM 100,000,
2% on excess of RM
100,000 up to RM
500,000 and 3% on
excess over RM 500,000
(Stamp duty)

No
.

Procedure
one day if the purchaser or purchasers lawyer
goes personally. Otherwise it can take up to 57 days for the Memorandum of Transfer to be
endorsed and be ready for collection.
Payment may also be made electronically via
Financial Processing Exchange (FPX), or at
the Stamp Office.
The documentation shall include:
Form 14A (Memorandum of Transfer)
Notice of Assessment (obtained in Procedure 3)
Form PDS 3
The documentation shall include:
Form 14A (Memorandum of Transfer)
Notice of Assessment (obtained in Procedure 3)

Agency: electronically via Financial Processing


Exchange (FPX)
5
The transfer is registered at the Land
Office/Registry
The purchasers lawyer presents the duly
stamped Memorandum of Transfer (Form
14A) for registration at the Land
Office/Registry. This must be done within
three months from the date of the
Memorandum of Transfer (Form 14A) which
is usually dated when it is submitted for
adjudication. A title search is conducted just
prior to presentation to ensure that there are
no encumbrances or restraint against dealings
which may hinder the registration of the
Memorandum of Transfer (Form 14A).
The documentation shall include:
Copies of Quit rent and Assessment receipts
Certified true copies of the Memorandum
and Articles of Association, Form 24 (Return
on Allotment of Shares), Form 49 (Return
Giving Particulars in Register of Directors,
Managers and Secretaries and Changes of
Particulars) of the Purchaser and Vendor
Certified true copies of the Vendors and
Purchasers board resolutions giving authority
to sell and purchase the property respectively

Time to
Complete

Associated Costs

No
.

Procedure
Search report on the Purchaser as extracted
from the Companies Commission of Malaysia
Duly stamped Memorandum of Transfer
(Form 14A)
Copy of Notice of Assessment bearing Stamp
Offices endorsement that ad valorem stamp
duty has been paid (obtained in Procedure 3)
Original of the title document
After submission, the applicants get the
presentation receipt the same day. It gives
the time of submission and that is the time of
legal registration. The computerized system
at the Land Registry also immediately tags the
land as pending transfer and hence anyone
conducting a land search on theproperty will
be aware of encumbrances (if any). However,
the presentation receipt is sufficient for
Banks to release the loan.
Agency: Land Office/Registry

Time to
Complete

Associated Costs