Legal Issues
What is the process to transfer the ownership of strata title?
1. Developer and purchaser sign Memorandum of Transfer (’MOT’) form (Form 14A, National Land Code)
2. Prepare the SPA, Memorandum of Transfer (MOT), Caveat Form, CKHT 2 once the particulars of the property have been verified.
3. Valuation Department then values property and informs Stamp Office of valuation amount. Stamp Office then issues the notice (PDS 14) of the stamp duty payable based on the said valuation. Lawyer collects stamp duty from purchaser and proceeds to stamp MOT. A penalty is imposed if the instrument is not stamped within the stipulated 30 days from the date of the notice.
4. File in Form CKHT 2 and await clearance (Form CKHT 4 or CKHT 5) from the Inland Revenue Board.
5. Once you obtain a loan from the bank, your lawyer will submit the MOT at the Stamp Office for adjudication. This is an important process and you must ensure your loan lawyer co-ordinate with your lawyer to avoid unnecessary penalty. Under normal circumstance, an assessment notice for the stamp duty payable on the MOT should be forthcoming within 6-8 weeks from the date of submission.
6. Upon receipt of the Notice of Assessment, the stamp duty must be paid to the Stamp Office within 30 days from the Notice failing which a penalty of 4x the amount stated on the Notice will be levied over and above the actual stamp duty due and payable. Therefore, your lawyer must monitor the adjudication process closely and advise you to make the payment as soon as possible.
7. After stamping MOT, lawyer presents the MOT and charge instrument (Form 16A) (for properties charged to a bank), to the Land Registry/Office for registration. On presentation, a presentation number would be allocated. It would take an approximate 6 to 9 months or earlier with the recent implementation of the Computerization System of Strata Titles.
8. With the presentation number obtained at the Land Office, the Loan Lawyer will advise the bank to release the loan sum to the seller provided all the other condition precedent imposed by the Bank have been fulfilled.
What are the documents that you must provide to your lawyer?
1. Copies of all present and previous Sale & Purchase Agreements (if you are not the first purchaser, to show proof that you are the last buyer in the chain).
2. Copies of present and previous Loan Agreement, Deed of Assignment, Deed of Receipt and Re-assignment (if any).
3. Strata Title (from the developer)
4. Current year quit rent receipt.
5. Current year assessment receipt.
Note: Legal issues are complex procedures of paper work signing. Of course you have to understand every aspect before you put down your signature. There are a few things you should keep in mind:
• You should make your payment to developers through your own solicitor or lawful owner as he/she will protect your interests.
• You must read and fully understand the terms and conditions stated in the Sale and Purchase Agreement. Consult your solicitor if you want to amend anything before you sign the Sale and Purchase Agreement.
• Your solicitor should be fully responsible for the purchase of your house, and do not share the same solicitor with the seller, as a conflict of interest may occur.
Lawyer Fees: Effective from January 1, 1992, legal fees are standardized by the Solicitors’ Remuneration Order 1991. There are two types of calculation for legal fees:
First Schedule (Sale and Transfer):Lawyer fees are determined by value of the house in the Sale and Purchase Agreement.
Fourth Schedule (Charges, Debentures and Security Loan Documents)
Lawyer fees are determined by the loan amount for the above documentation.
** Fees subject to 5% government tax.
Stamp Duty
There are two types of Stamp Duties:
1) Stamp Duty on Loan Amount
2) Progressive Present Stamp Duty on Transfer of House Title
Real Property Gains Tax
Real Property Gains Tax (Exemption) (No.2) Order 2007
Resources, 18 April 2007
The Real Property Gains Tax (RPGT) has been removed by way of an exemption order.
REAL PROPERTY GAINS TAX (EXEMPTION) (NO. 2) ORDER 2007
IN exercise of the powers conferred by subsection 9(3) of the Real Property Gains Tax Act [Act 169), the Minister makes the following order:
Citation and commencement
1. (1) This order may be cited as Real Property Gains Tax (Exemption) (No.2) Order 2007.
(2) This Order comes into operation on 1 April 2007.
Exemption
2. The Minister exempts any person from all provisions of the Act in respect of any disposal of chargeable assets after 31 March 2007.
Made 27 March 2007
[Perb.CR(8.09) 248/39/6-1 Vol.3 (SK.1); LHDN. 01/35/(S)/42/23/7;
PN(PU2)325/III]
TAN SRI NOR MD. BIN YAKCOP
Second Minister of Finance
[To be laid before the Dewan Rakyat pursuant to subsection 9(4) of the Real Property Gains Tax Act 1976]
Reproduced by Real Estate and Housing Developers’ Association
For further questions on RPGT, please go to their web site at http://www.hasilnet.org.my
In the following Advocate & Solicitor is our company panel: -
i. A.J.TEOH & CO.
ii. AHMAD MURAD AZIZ
iii. AJMER, SANDHU & ONG
iv. ANG, OON & ASSOCIATES.
v. ARJAN PURSUMAL
vi. B.C.TEH. & YEOH
vii. B.T.LEE & CO.
viii. B.T.LEE DANNY C.N. & CO.
ix. C.S.CHAN & CO.
x. C.S.ONG & CO.
xi. CHEONG WAI MENG & VAN BUERLE
xii. CHEW JU LI & CO.
xiii. CHEW, TAN & LIM.
xiv. CHIN ENG ADLINA & LIM
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xvi. CLEMENT, DAWN & ASSOCIATES
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xviii. EDWARD TAGHIPIS & ASSOCIATES
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xxii. GHAZI & LIM
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xxvi. H’NG HUN HONG & CO.
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xl. LEONG WENG KHUAN
xli. LEONG, NG & TAN
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xliv. LIM CHENG POH, LIM & RAHIM
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xlvi. MAHINDER SINGH DULKU & CO.
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xlix. ONG & MANECKSHA
l. OOI LEE & CO.
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lii. PRESGRAVE & MATTHEWS
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lxv. T.C.YEOH & CO.
lxvi. TAN BENG HONG & COMPANY
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lxviii. TAN, YU & COMPANY.
lxix. TANG KHYE KIAN & CO.
lxx. THE CHAMBERS OF CHONG & YOU
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lxxii. W M TAN & CO.
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