Transferring Real Property in Malaysia

What is Real Property?

In simple terms, a real property includes land or immovable property, with or without title.

The Conveyancing Process - The process of transferring property

The process of transferring a property can be done with the help of a lawyer, or on your own. While you may save money if you DIY, you'll have to learn relevant laws and legal codes governing the conveyancing process, take time to file necessary forms and pay for the requisite fees.

Conveyancing is the process of transferring a property title from one individual to another.

This usually occurs between a Seller and Buyer, both of whom have signed a sales contract for a piece of land or residential property.

Conveyancing can be carried out in two ways: You can either hire an experienced and qualified conveyancing lawyer, or simply do it yourself.

Each method has its advantages and disadvantages. Hiring a conveyance lawyer ensures that you have the best protection under the law, and you get to benefit from related legal advice.

What Goes On During The Conveyancing Process?

If you’ve decided that you’re better off hiring a lawyer, here are the steps involved.

Step 1: The first step is, of course, to find a suitable conveyance lawyer. You may be able to find one online. Otherwise, you can rely on recommendations from family and friends, or referrals from your bank.

Step 2: Once you have found the right conveyance lawyer, he or she will draw up a draft contract that includes information such as the charges and the required deposits.

Step 3: The legal process formally begins when the lawyers for both the buyer and seller begin reviewing the legal documents.

During this time, make sure you’ve gone through the documents yourself, and highlight any concerns you may have.

While a conveyancing lawyer can help take the stress out of the whole process, it’s always useful to perform checks yourself. This could include running your own background research on the property.

Step 4: The final step is the preparation of the Sales and Purchase Agreement (“SPA” or "S&P"), its signing, as well as the making of payments.

Guide on Self-Managed Conveyancing

If you choose not to hire a lawyer, you may need to learn relevant laws and legal codes governing the conveyancing process. You should also take the time to file necessary forms and pay the requisite fees. 

If you choose not to hire a lawyer, you may need to learn relevant laws and legal codes governing the conveyancing process. You should also take the time to file necessary forms and pay the requisite fees.

Step 1: The first step is to determine the type of title for the property, which is essentially the legal ownership documents for the property.

Note that there may be certain legal considerations that apply to non-landed properties. For example, condominiums only have master titles upon the point of sale. Subsequently, strata titles are issued to each unit.

Step 2: Run a simple land title search to check for any encumbrances. The most common type of encumbrance is when the seller has charged the property to a bank, in order to secure the home loan.

Simply put: If the property has been used as a collateral for the mortgage, a process called ‘redemption’ needs to be carried out.

This process involves issuing a redemption letter to the seller, determining the amount that's owed to the bank, as well as agreeing on an expected time frame for the seller to settle the remaining mortgage sum.

Step 3: Following the encumbrance check, you’ll also need to check on the state's restriction on the property title.

The most common state restriction is getting consent from the State Authority or land office of the particular state.

The word 'consent' here refers to the application for permission to proceed with the sale. Every state has a different set of rules or requirements, and it may take anywhere from 1 month from the submission of the application, or 3 months after that, or even more!

Step 4: The next crucial step is to make sure all documentation is in order, as you’ll need to fill up the required forms and documents for submission to the land office.

Among these are the real property gains tax (RPGT) form, and Sales and Service Tax (SST) form. If this step is carried out properly, you shouldn't have much else to worry about.

Step 5:To pay stamp duty on the title transfer document, you’ll need to go through what's known as an 'adjudication' process.

This is basically just a method to determine (or judge) how much stamp duty is payable for the instrument of transfer.

You’ll need to submit the transfer documents to the stamp duty office (also known as the Inland Revenue Board Of Malaysia or LHDN) before receiving further instructions.

The waiting time is about 2 to 3 weeks for completion if the process has been computerised (in certain States), or 2 to 3 months if the process is still manual.

Step 6: The final step is to submit official forms to the land office for them to process the change of ownership. Once the required payments are made and the documents are finalised, the conveyancing process is complete.

Prepared by,

Hakimi bin Abdul Jabar

Advocate & Solicitor

High Court of Malaya

Date : 11.11.2019

For further enquiries, call or WhatsApp :

012-2132308