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FAQ & Knowledge
Have a question?
Here are answers to our most frequently asked questions, plus ways for you
to request
information if your question is not among them.
FAQ Disclaimer:
While every effort has been made to ensure the accuracy and reliability of
this material, the information contained in these pages was obtained from
sources believed to be reliable, but www.hba.org.my does not guarantee
the information is complete or accurate, or up to date. The information contained
is for informational purposes only and should not be construed as advice on
facts specific to the reader.
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Sale & Purchase
Q: What is
the process & the fees involved in the sale and purchase of a house?
Q: The developer is charging me
late payment interest which is not my fault. What should I do?
Q: Can I sell my property that has
not been issued with a Certificate of Fitness for Occupation?
Q:
Cancellation of booking and seeking refund of fees paid.
Q: Consent / administration fees for refinancing or re-selling -
do I have to pay for it?
Q: Properties at Auctions - I intend to purchase a property at an auction.
What should
I be aware of?
Q: Purchasing
'ready with CF', will I be protected by the Housing Act?
K: Purchasing a sub-sale apartment without strata titles and the developer
has gone 'bankrupt'
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Fees & Charges
K: Lawyer's
fees -
Solicitors Remuneration Order 2006
K: Stamp
duty -
Computation of Stamp Duty for Transfer of Real Estate
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Vacant Possession
Q: I have received vacant possession but till now,
there is still no sight of the CFO.
What should I do?
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Lawyers
Q: Why do I need to
use my own lawyer?
Q: The lawyer is charging me a certain amount for legal fees,
is this amount correct?
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Defects
Q:
Defects
liability period - how to make your claims
Q:
Water intrusion
(leakage) from upper unit - condo management not helping because 'defects
liability period' is over so they say - what can I do?
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Insurance
Q: Both the developer and my end-financier are billing
me for the fire insurance -
why should I pay double?
Q: What is MRTA?
Q: What is
fire insurance for
strata titled properties and the Management Corporation?
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Late Delivery
Q: Can I claim LAD until the date when
electricity supply is actually provided?
Q: Late Delivery Claims - My developer has offered verbally
to only pay 50% of my claims which I do not agree.
What should
I do?
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Tribunal for Homebuyer Claims
Q: Where can I find information on the Housing
Tribunal?
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Starting a Buyers' Group / JMB / Management Corporation
Q: How do I start a
residents association/group/committee?
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Information
Q: Where can I find information on a
developer of a new project?
Q: Where can I get more information on
Housing Loans & Loan
Packages?
K: What is the difference between
leasehold and freehold tenure?
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Condo Management & Maintenance - how to form JMB or MC?
Q: I own a unit in a condo/subdivided building where
many of it's owners are refusing to pay for the maintenance because the property
is not properly maintain. What can I do to ensure that the building is
better maintained
& managed?
-
What
is the meaning of ... ?
Q1: What are the differences between
leasehold and freehold tenure?
A: Click
here
to view the explanation.
Q2: What is CF, CCC, LAD, Strata Titles, etc?
A: For definitions used in statutes, check
here.
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Public announcements
(1)
Changes to laws, rules & regulations
(2)
Stamp Duty Waivers
(3)
EPF withdrawals
(4)
Real
Property Gain Tax (RPGT)
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Back to the Top
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1. Sale & Purchase
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Q:
What is the process & the fees involved in the sale and purchase of a house?
A: Check out this
detailed information
from the Malaysian Bar Council.
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Q:
The developer is charging me late payment interest which is not my fault.
What should I do?
A: All payments under the Sale and Purchase Agreement
(SPA) must be paid within the time frame specified in the agreement. Otherwise,
the developer has a right to charge interest on late payments. Unless you
can prove that the reason the progressive payments were late was because of
the financier, lawyer or even the developer, you will have to foot the bill.
Lawyers and financiers dealing with conveyancing work are familiar with the
time frames within which they have to work to prevent buyers from footing
additional interest on late payments.
Clause 9 (2) - Interest on late payments - in the regulated Sale Contracts
Schedules H or G states the following:
... (2) The Vendor shall not be entitled to charge interest on late payment
in respect of any instalment if the delay in payment of such instalments is
due to any one or more of the following:-
(a) the relevant progressive claim notice referred to in the Third Schedule
hereto furnished by the Vendor to the Purchaser and/or the Financier is not
complete or not in compliance to the requirement of Clause 4(2) herein;
(b) in the event the said Land is encumbered to any bank(s) and/or financial
institution(s) by the Vendor, such bank(s) and/or financial institution(s)
shall delay of fail to issue and deliver the redemption statement and undertaking
letter in respect of the said Lot to the Purchaser or the Financier;
(c) in the event the said Land is encumbered to any bank(s) and/or financial
institution(s) by the Vendor, the Financier shall refuse to release the relevant
portion of the Loan equivalent to the progressive payment due on the ground
that such progressive payment is insufficient to settle the full redemption
sum payable in respect of the said Lot."
You should try to obtain a chronology of events which caused the delay to
help you understand who delayed the payments, whether it is the lawyer, financiers
or developer. If possible try and find another lawyer dealing with conveyancing
issues to advise you. If you know which party is at fault, you can demand
that he foot the bill. However, you may have to pay the developer under protest
first in order for you to claim your money back from the party at fault. Otherwise,
the longer you delay, the more interest you will have to pay. If the party
at fault refuses to pay you, you may then have to seek legal redress either
through the
Financial Mediation Bureau for banks,
Malaysian Bar Council for lawyers and the
Tribunal for Homebuyer's Claims for the developer.
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Q:
Can I sell my property that has not been issued with a Certificate of Fitness
for Occupation?
A: Yes, properties can be transacted without CFO.
However, without CFO it might hamper the buyer from securing a bank loan.
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Q:
Cancellation
of booking and seeking refund of fees paid.
A: The
Housing
Regulations for buying off-plan from housing developers do not allow for
'booking' fees, so potential buyers should be aware of this and only get your
10% down payment ready when you are sure of purchasing. There is no cooling-off
period unless it is in writing. A booking fee is an offer to purchase. Many
buyers do not realise that a signed offer to purchase is legally binding once
the seller has accepted the offer.
It is the same situation if one is buying previously owned property, once
you have signed an offer to purchase and pay an earnest deposit, you lose
your deposit if you change your mind about buying the property. Cancellation
will cost you part of your booking fees if not all. You should consult
your lawyer first before parting with a single cent and not be rushed into
paying a deposit, no matter how small the amount is.
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Q:
Consent / administration fees for refinancing or re-selling - do I have to
pay for it?
A: Check out this article by Roger Tan which
gives a detail explanation on what the seller or buyer has to do.
Q & A on amended housing law - 18/05/2007 The Sun By Roger Tan (Chairman
of the Conveyancing Practice Committee, Malaysian Bar Council)
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Q: Properties at Auctions
- I intend to purchase a property at an auction. What should I be aware
of?
A: Normally, properties at auctions are sold on
a 'as-is-where-is' basis. No guarantee is given on Vacant Possession
and titles. Sometimes, it is not possible to inspect the interior of the property,
but to rely on information given which is itself a risk that the bidder has
to take.
Steps to take:
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Inspect the subject property and make enquiries with the
neigbours.
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Conduct an official title search on the Master Title or separate
title, if available, at the relevant Land Office and check with the Local
Council and Land Office for arrears on the assessment tax and quit rent,
respectively.
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Enquire from the Developer/Landowner and/or other relevant
authorities on the terms of consent to the sale Check also for arrears
of service charges, quit rent, utility bills, etc.
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Obtain a copy of the Proclamation of Sale from the Auctioneer
and ensure that you understand all the terms & conditions stated in the
Condition of Sale prior to the auction.
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Appoint a lawyer to advise you prior to making a bid.
More information:
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Auction caution
11/03/2008 The Star Articles of Law By BHAG SINGH
Properties sold at an auction may appear to be cheap. But buyers need to
understand the various aspects that could indirectly hike up the price.
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Making a bid
at a public auction 30/06/2006 The Sun - Law
& Realty By Andrew Wong
Generally, there are two types of public property auctions taking place
in Malaysia, and anyone who intends to bid at a public auction should know
what additional costs he may have to incur, over and above the purchase
price.
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Bid Smart
NST Property Times 30 October 2004 issue -By Lydia
Gomez
When bidding at an auction, it is best that you conduct an inspection prior
to buying the property you want.
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Fine tuning
public auctions 22/03/2003 NST-PROP
By Salleh Buang
When the National Land Code, 1965 was amended recently, many thought it
was merely to effect a shift in policy announced earlier by the Prime Minister.
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Q: Purchasing
'ready with CF', will I be protected by the Housing
Act?
A: If
you are purchasing a housing accommodation unit that is 'ready with CF', it
is not covered under the new HDA as it is deemed completed whilst the ones
under the ACT are those under construction and sold 'off the plans'.
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Q: Purchasing a sub-sale apartment without strata titles and
the developer has gone 'bankrupt'
A: You can anticipate lots of problems when a developer
of your property is insolvent as there are outstanding
matters in the original contract of sale (between
the previous buyer and developer). It is best that
you seek legal advice if you intend to go ahead with your
purchase.
These are some of the problems to expect:
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disruption of maintenance & management services;
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if the applications for strata titles have not been made
in accordingly - you might end up having to pay
for the application of the strata title yourself;
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difficulties in completing legal documentations
eg. re-financing, re-sale etc;
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having to deal with a third party ie Liquidators
or Receivers or Insolvency Department, who has stepped into the shoes of
the developer by court orders.
-
in the case of a re-sale, financiers may
be reluctant to finance such purchase.
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Back to the Top
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2. Fees & Charges
(Read No 13 for Public
Announcements on changes / waivers)
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K:
Lawyer's fees -
Solicitors Remuneration Order 2006
or check with the
Malaysian Bar Council for the latest Order.
K:
Stamp duty -
Computation of Stamp Duty for Transfer of Real Estate
K: Real Property
Gain Tax -
Read
announcement on waivers
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Back to the Top
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3. Vacant Possession
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Q: I have received
vacant possession but till now, there is still
no sight of the CFO. What should I do?
A: These are the steps that you may take:
i. Check with the developer and the issuing local authorities on the cause
of the delay.
ii. If you are not satisfied with the response that you have been given, you
may make a complaint to the Ministry of Housing and Local Government together
with the following documents:
a) a copy of the
notice of handover of vacant possession
b) a copy of the certificate of completion issued by the Architect
c) a copy of the letter from the local authorities regarding the issue of
CFO
iii. Form an action
group with other affected buyers for a cohesive voice and also to share task
and to show how concerned and serious this group of affected purchasers in
wanting to move into their homes.
iv. Check if similar complaints on the same project has been received and
also on whether an action group for that particular project has been formed
and if not, to learn on the steps on how to form one
How to check : Check
here for groups
formed; Join
HBA's
Online Forum or
Contact Us.
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4.
Lawyers
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Q:
Why do I need to use my
own lawyer?
A: The first rule
of conveyancing is 'buyer must engage own lawyer'. Consult a lawyer right
from the start and not after you have paid the deposits. Reasons to use your
own lawyer:
Under the law you are deemed to have read and understood every document you
signed. Furthermore, promises made by the seller or someone else about the
deal may not be enforceable if the promises are not in writing.
Lawyers cannot represent both Vendor & Purchaser - if you are using the Vendor's
panel lawyer, often, when disputes happen, the lawyer is unlikely to represent
you against their bigger client.
A lawyer in general practice will be able to complete your purchase; however,
lawyers with a focused real estate practice may prove a better tool if you
are unsure of what to do, or have complications in your purchase agreement
or mortgage. While you may think that you cannot afford the services of your
own lawyer, consider whether you can afford not to.
More information:
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5. Defects
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Q:
Defects liability
period - how to make your claims
A: If you find any defects
in the property after receiving vacant possession, make sure you submit the
defects list in writing to the developer within 18 or 24 months (whichever
is applicable) from the date of vacant possession. The developer will
have 30 days from the date of receipt of your list to rectify the defects.
If the developer fails to rectify within the stated time, you can then engage
someone else to do the rectification works and charge the costs (through the
stakeholder lawyer who is holding the 5% purchase price) to the developer
provided you have given another 14 days' notice to notify the developer of
your intention.
Since 5% of the purchase price is being retained as stake holder's fund, we
urge complainants to give written notice to the stakeholder lawyer to withhold
release of the said sum until and unless the complainant is satisfied with
the remedial and repair works by the Developer.
Sample Letter:
More information:
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Q:
Water intrusion (leakage) from upper
unit - condo management not helping because 'defects liability period' is
over so they say - what can I do?
A: The Developer or the Management
Corporation has a duty to maintain common properties such as pipes which are
used in common by two owners or more and individual owners have a duty to
maintain their own units. You will have to first determine the owners of the
defective items which is the source of the water seepage. The following options
can then be considered, if the items are not common property.
a) approach the neighbour for assistance and cooperation. You will need it
to gain access to rectify the water leakage from your neighbour's unit. Find
out from the neighbour if they have done any renovation to their unit that
may have caused the leakage.
b) study your Deed of Mutual Covenant (DMC) or House Rules on the subject.
The maintenance and upkeep of properties in a condo are
normally identified and defined in the DMC or House Rules. For eg. there might
be a covenant that neighbours' sharing walls, ceiling/floors
etc also share the cost for repairs. In the event that your neighbour is not
cooperative, you will need the management to help you 'manage' the neighbour
according to the mutual covenants of the condo. However, it makes sense that
the source of the water seepage has to be repaired by the unit owner first.
c) normally there is another clause in the DMC or House Rules, that says "unit
owners are to keep their unit in good condition so as not to inconvenience
other owners" or some wordings to that effect. Ask the management to assist
you.
d) Get a quotation from your contractor, so that you know the price that you
will need to pay in the event that the neighbour is not cooperative.
e) If you are still not satisfied that you will have to end up footing the
bill, consider getting a lawyer to study your case. However, you will have
to consider whether it is worth paying legal fees or paying for the repairs
yourself.
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6.
Insurance
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Q: Both the developer and my end-financier are billing me for
the fire insurance - why should I pay double?
A: The House Owner/Fire Insurance policy
This policy provides coverage for your property against natural disasters
such as flood, fire, riot, strike and malicious damage. For properties with
strata titles such as apartments or condominiums, you need not buy the insurance
because the Management Corporation (MC) would have taken up insurance on the
entire building. You should ensure that you obtain the sub-certificate of
the Master Policy issued by the insurance company from the MC and present
it to the financial institution. This is necessary so that the financial institution
is aware that the property has been insured and will not buy another fire
insurance on your property. In such a case, you will be required to assign
your rights under the policy to the financial institution.
Source:
www.bankinginfo.com.my
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Q: What is
fire insurance for strata titled properties and
the Management Corporation?
Check out this FAQ
from Persatuan Insuran
Am Malaysia
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Q: What is MRTA?
A: The Mortgage Life Assurance or MRTA
This type of policy provides for full settlement of the outstanding balance
of the housing loan with the financial institution, in the event of total
permanent disability or death of the borrower. Premiums can usually be included
in the loan amount, and the repayment period of the premium is usually spread
over the loan tenure. The premium is only incurred once. There are no monthly
or yearly premiums to be paid. In the event of early termination of housing
loan, you will generally have the option to request for a refund of the premium
for the balance of the unexpired period or to continue the insurance coverage.
Source:
www.bankinginfo.com.my
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7.
Late Delivery
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Q:
Can I claim LAD until the date when electricity supply is actually provided?
A: Please read and understand
the definition of "ready for connection" in your Sale and Purchase Agreement.
Thereafter, write to TNB for their written confirmation as to where the fault
is and the party that is attributing to the delay of supply being available.
With the documentary evidence, you could then substantiate your claim that
the Developer has prematurely delivered vacant possession to you and thus
your claim for LAD.
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Q:
Late Delivery Claims - My developer has
offered verbally to only pay 50% of my claims which I do not agree. What should
I do?
A: Your rights and entitlement
is contained in your Sale and Purchase Agreement. First of all, you should
make your demand in writing immediately upon receiving notice for handover
of vacant possession. If you do not know how to go about writing a demand
letter, you may use
our sample as a guideline. If you are not satisfied with the response
from the developer whether verbal or written, you may then seek legal
recourse. If your claim is below RM50,000, you may check further to
see if other conditions falls under the jurisdiction of the Tribunal for Homebuyer
Claims. Otherwise, you may seek redress at the Civil Courts. For more information
on the Tribunal, see FAQ below.
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8. Tribunal for Homebuyer Claims
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Q: Where can
I find information on the Housing Tribunal?
A: You can check out the link from the Ministry of Housing & Local Government
-
Tribunal Tuntutan Pembeli Rumah or check the laws & regulations regarding
the Tribunal -
Housing Act
/
Housing
Development (Tribunal for Homebuyer Claims) Regulations 2002.
For the addresses of the Tribunals, check
here.
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9. Starting
a Buyers' Group / JMB / Management Corporation
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Q:
How do I start a residents
association/group/committee?
A: There is no necessity for strata title property owners
to register a residents' association as the Building & Common Property (Maintenance
& Management) Act 2007 allows for the joint formation of a Joint Management
Body while waiting for the Management Corporation (see answer to
Question
10) to be formed. If there are other reasons for forming one, for eg,
non-strata title property owners or where vacant possession has not been handed
over, the articles below may help you form one.
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10.
Information
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Q1: Where can I find information
on a developer of a new project?
A: There is no one stop centre
for a study of a developer's record. The main reason is that big corporations
tend to set up a subsidiary for every project. There are also instances where
the development project is a one time venture that the company/individual
undertakes. You will have to do some investigative work to get the information
you want. We suggest the following places to check.
a) if the parent company is listed - you can check with www.klse.com.my for
the background and for all the subsidiaries of the company. Read also all
announcements for litigation news and public reports.
b) if the company is licensed by the Ministry of Housing and Local Government
- you may check from www.kpkt.gov.my - Idaman Web - however the information
is only restricted to the subsidiary company and there is limited information
on past performances and in many cases, there are blank information not updated
by the Ministry.
c) you can subscribe to www.emedia.com.my - to check for news on all related
subsidiary companies of the parent company to find out if there are complaints
from buyers as far back as 1991.
d) you can ask the developer themselves for the names of the projects they
have claimed to developed - so that you can go look for yourself and maybe
contact some of the past buyers for feedback. If the developers are very proud
of their past projects, they would gladly give you reference.
e) check also from websites eg, http://www.ipsofactoj.com or www.kehakiman.gov.my
. These sites provide case laws if the parent company or any of their subsidiary
has been involved with law suits with the buyers.
However, this is just the initial checking step. There are pros & cons of
buying new from a developer. The pitfalls of buying 'off-plan' is just too
numerous to mention here. We can only advise you that the reliability of any
project and its developer is the honest desire of the developers to complete
the project within the time frame and with minimum defects. We hope you have
browsed our website to read about the pitfalls others have experienced. For
a start, we have a publication that you can purchase.
Further Reading:
Information pays - 25/10/2003 NST-PROP
Q: Where can I get more information on Housing
Loans & Loan Packages?
A: Go to www.bankinginfo.com.my
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11.
Condo Management & Maintenance - how to form JMB or MC?
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Q: I own a unit
in a condo/subdivided building where many of it's owners are refusing to pay
for the maintenance because the property is not properly maintain. What can
I do to ensure that the condo is better
maintained & managed?
A: Check out the following links on the Building & Common Property (Maintenance
& Management) Act that is in operation from 12 April 2007. The developer has
12 months from that date to call for the first meeting to form the Joint Management
Body. This is good for apartments like yours where strata titles are not issued
yet.
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Back to the Top
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12. What is the meaning of ... ?
|
Q1: What are the differences between
leasehold and freehold tenure?
A: Click
here
to view the explanation.
Q2: What is CF, CCC, LAD, Strata Titles, etc?
A: For definitions used in statutes, check
here.
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Back to the Top
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13. Public Announcements
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(1)
Changes to laws, rules
& regulations
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Changes
in the Solicitors’ Remuneration Order
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Only New Projects To
Follow New CFO System
13/04/2007 Bernama
PETALING JAYA, April 13 (Bernama) -- New projects from now on will be subjected
to the Certificate of Compliance and Completion (CCC) system which replaces
the Certificate of Fitness for Occupancy (CFO), Housing and Local Government
Minister Datuk Seri Ong Ka Ting said today.
-
CCC Ensures Full
Accountability, Says Ong
14/04/2007 Bernama
KUALA LUMPUR, April 13 (Bernama) -- The parties that issue the Certificate
of Compliance and Completion (CCC) for building projects will be held accountable
for its safety forever, said Housing and Local Government Minister Datuk
Seri Ong Ka Ting.
-
Developers
Of High-rise Buildings Can Seal Properties Of Tenants
14/04/2007 Bernama
KUALA LUMPUR, April 14 (Bernama) -- The assets of owners and tenants of
units in high-rise buildings such as condominiums, office buildings and
shopping centres who refuse to settle maintenance charges can now be sealed.
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(2)
Stamp Duty Waivers
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(3) EPF withdrawals
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EPF To Announce Details
On New Housing Withdrawal In December
07/09/2007 Bernama.com
KUALA LUMPUR, Sept 7 (Bernama) -- The Employees Provident Fund (EPF) will
announce details on the new monthly housing withdrawal in December.
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Easing burden for property
buyers 08/09/2007 The Star
M. RAGENI has one “headache” less now. She will be able to use part of her
monthly salary for other expenses with the announcement that EPF contributors
will be allowed to make monthly withdrawals from their Account Two for housing
loan repayment.
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Housing loan scheme
won’t affect EPF earnings 08/09/2007 The Star
By SIM LEOI LEOI
PUTRAJAYA: The freeing of RM9.6bil in Employees Provident Fund contributions
to pay for the purchase of homes by the public will not affect the earnings
of the body.
-
EPF withdrawals
to go into members’ bank accounts 12/09/2007
The Star By IZATUN SHARI
KUALA LUMPUR: The EPF monthly withdrawal for reducing housing loans will
be credited directly into the contributor's personal bank account and not
to the lending bank.
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Groups: Credit EPF
savings to banks, not personal accounts 12/09/2007
The Star
KUALA LUMPUR: Several organisations want the monthly withdrawals from the
EPF Account 2 to be credited to the financial institution from which the
housing loan was taken instead of to the contributor's personal account.
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EPF scheme to help members
save more for retirement 23/10/2007 The Star
By PAUL CHOO
KUALA LUMPUR: All Employees Provident Fund contributors will, from Feb 1,
be able to withdraw part of their funds and channel them to approved investment
programmes.
-
55 before spouse
can claim savings 23/10/2007
The Star
KUALA LUMPUR: Beginning June 1 next year, any claim on a deceased spouse’s
Employers Provident Fund savings will only be paid once the claimant reaches
the age of 55.
-
New ruling only
applies in divorce cases, says EPF
24/10/2007 The Star
PETALING JAYA: A person who succeeds in claiming the Employees Provident
Fund savings of a spouse in a divorce case will only be able to get the
money when the claimant reaches age 55.
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(4) Real Property
Gain Tax (RPGT)
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Major boost for high
end property 23/03/2007 The Star By KEITH
HIEW
PETALING JAYA: Prime Minister Datuk Seri Abdullah Ahmad Badawi, who announced
the scrapping of the real property gains tax (RPGT) from April 1, hopes
the move would “inject more excitement and dynamism to both the property
and financial sectors.”
-
Property tax
exemption a double-edged sword 14/04/2007
The Star CURRENT TAX MATTER By DR JEYAPALAN KASIPILLAI
While exempting property transactions from real property gains tax (RPGT)
will provide a boost to the real estate sector, the move may also spur greater
market speculation. In view of this, the Government’s move to exempt rather
than repeal RPGT may provide a safety net over the long term.
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