Conveyancing Law and

Practice
LAD5093
DR. ZULKIFLI HASAN

CONTENTS
Sale and Purchase

Scale Fees

Caveat

Charge

Specific Relief

Lease and Tenancy

Introduction

Conveyancing is the act of transferring the

legal title in a property from one person to
another.
To ensure that the purchaser secures the
title with all the rights that run with the
land.

Role of solicitors

The lawyer: assist the parties from the

point of negotiation until the title of the
property is transferred to the purchaser.
Solicitor for the P: P pays the PP and the
ownership of the prop is transferred.
Solicitor for the V: to ensure the vendor
receives the PP.
Yong & Co v Wee Hood Teck Dev Corp (1984)
2 MLJ 39.
Liability in contract and in tort

Key Legislation

NLC 1965
CA 1950
Land Acquisition Act 1960
Strata Titles Act 1985
Housing Developers (Control&Licensing
(Control&Licensing)) Act 1966
RPGT 1976
Stamp Act 1949
Solicitors Remuneration Order 1991
Specific Relief Act 1950

Overview of Property Law in Malaysia

The land registration system: the State Land

Offices and coordinated by the Department of
Land and Mines.
Properties can be either:
(a) Freehold held in perpetuity; or
(b) Leasehold land owned by the state and leases
are for a term of usually for 30, 60 or 99 years.
(c) Malay Reserved Land the buying and any
subsequent changing of ownership is restricted to
Bumiputeras only.

Title

Freehold or leasehold properties are either issued with:

(a) Master Title more than one unit of property is
constructed. Eg.
Eg. registered in the name of the
developer. The developer may submit an application
for subdivision of the master title.
(b) Individual Title issued under the NLC for land,
houses, commercial properties that are commonly not
multi--storey; or
multi
(c) Strata Title issued under the Strata Titles Act.
Issued for multimulti-storey buildings e.g. apartments,
condominiums, commercial properties and now even
for houses in gated and guarded communities.

S&P Transactions

The conveyancer to gather all the relevant facts

and information before drafting the S&P
agreement.
To give appropriate advice
To establish whether the purchaser intends to
purchase the prop form the developer or subsubsale transaction.

Buying with Cash or Loan

The cash purchaser:

1. To procure written confirmation from the D to ensure the
property is free from encumbrances.
2. In the event that the property is charged, shall request from
the Ds bank a redemption statement cum letter of undertaking
before paying for the purchase price. 3. The purchaser pay the
redemption sum directly to the developers bank and
subsequently request the bank to acknowledge receipt of the
payment via a letter of disclaimer.
The Loan Purchaser:
Who pays for the property with a bank loan.
It is subject to the banks own internal and credit assessment
guidelines.

Overview Of The Sale Process

Offer to Purchase
Payment of first 10% of purchase price
Signing of the (SPA), Deed of Mutual Covenant (DMC) (if
applicable), MOT (if subsub-divided title issued)
For nonnon-Malaysian, they are required to seek approval
from Economic Planning Unit (EPU) (if applicable) and
consent from the State Authority
Accepting the banks LO and signing the loan documents
Payment of the balance PP either by cash or loan
Delivery of Vacant Possession
(Within 24 month for Schedule G or 36 months for
Schedule H)

Property from the Developer

S&P shall be in accordance with Housing

Developers (Control&Licensing
(Control&Licensing)) Act 1966
If landed prop: Schedule G (24 months)
If subdivided building eg
eg.. apartment or landed
strata: Schedule H (36 months)
Defect Liability Period: 24 months
Management Corp: Joint Management Body
formed under the Building and Common
Property (Maintenance and Management) Act
2007.

Sub--Sale Transaction
Sub

It is governed by the law of contract.

T&C of the S&P need to be negotiated btn the
parties.
The payment of purchase price is usually made
within 3 months from date of SPA provided
that no restriction of interest on the title.

Preliminary Issue to be Considered

Property with an individual issue document of

title landed or strata
Property without title, has yet to be issued.
Leasehold or freehold
Subjected to any restrictions, liens, caveats, and
charges.
Individual purchaser or multiple purchasers
Foreigners

Preliminary Searches

Land title
Bankruptcy search
Other searches
Bank Statement: if property is still under bank
financing. Request from the vendor, the bank
statement.

Land Title Search

To ascertain:ascertain:The existing proprietor of the prop

Property is encumbered or not
Any restriction in interest
Any type of caveat
Land acquisition
Freehold or leasehold
If leasehold, expiry date of the lease
Chargee of the prop

Bankruptcy and WindingWinding-up Search

Search on the vendorvendor- if bankrupt, unable to

sell. OA would stop into the vendors shoes.
Search on the company.
Register and Search at (cost at RM12):
www.e--services.com.my
www.e
www.myeg.com.my
www.rilek.com.my

CCM Search

To ascertain who the directors and shareholders

of the co.
Registered address and business address.

Drafting the S&P Property with Title

Parties to the Agreement

Recitals
Deposit sum
Condition precedent
Mode of payment
Time Period

Drafting of the S&P without title

Essential preliminaries
Recital
CP
Mode of Payment
Documentation and execution of documents
RPGT
Redemption of the prop
Lodgment of private caveat by purchaser
Non--perfection of the deed of assignment
Non

Cont

Documentation and execution of documents

affecting the transfer
Procedure for redemption form the existing
chargee..
chargee
Release of monies of balance PP
RPGT
Supervening Events
Vacant possession
Miscellaneous clauses

Particulars in S&P
1. Parties to the agreement and date
2. Recitals:Recitals:
Representation by the vendor as to title

Whether property encumbered (eg
(eg.. Charge
to financier)

Whether there is restriction of interest on
title and whether consent from state
authority is required for transfer of property
3. Operative Part of AgreementAgreement-

Operative Part of the S&P

1.
2.
3.

4.

5.
6.

Consideration clause
Purchase Price of property
Obligation of vendor
To apply for consent to transfer
To deliver vacant possession
To pay Real Property Gains Tax
Obligations of the purchaserpurchaserTo pay the purchase price
To bear costs of stamp duty and registration fee for
transfer
Execution of Transfer contemporaneously with the
S&P
Deadline for payment of balance of purchase price

Cont.
7.
8.
9.
11.
12.
13.
14.
15.
16.
17.
18.

Grace Period for payment of balance of purchase price

Delivery of vacant possession upon payment of balance
of purchase price
Vendors right to forfeit 10% of purchase price upon
termination of agreement by purchaser
Real Property Gains Tax; sum from purchase price to
be set aside for payment of vendors RPGT
Purchaser obtaining finance
Apportionment of outgoings at date of VP
Compulsory acquisition by government
Costs to be borne by each party
Time of the essence
Notices
Successors in Title

Scale Fees

Fees??: The risks are passed to the solicitor.

Fixed Scale Fees:
The Solicitors Remuneration Order 2005: Fees
for S&P and transfer or assignment.
Discounts prohibited
Disbursement: cost actually incurred
Solicitor to act only one party only: either lender
or borrower or purchaser or borrower.

Solicitors Remuneration Orders

Solicitorss fee:
1. the value of the house
2. the loan or financing amount.
The scale fees exclude the following:following:1. fees payable on the registration of documents
2. stamp duties or fees
3. auctioneers, valuers.
valuers.
4. travelling and accommodation
5. miscellaneous not exceeding RM50.

Fees for Sale and Transfer

1st schedule
1st RM150k=1% minimum RM300
Next RM850k=0.7%
Next RM2 M=0.6%
Next RM2 m= 0.5%
Next RM2.5= 0.4%
In excess of RM7.5 m= negotiable but shall not
exceed 0.4% of such excess.

Charges, debentures and other

security documents

1st RM150k= 1% min RM300

Next RM850k= 0.7%
Next RM2m= 0.6%
Next RM2m=0.5%
Next Rm2.5m=0.4%
In excess of RM7.5 m= negotiable but not
exceed 0.4%

Stamp Duty

Stamp Act 1949=is levied by the govt on

instruments of transfer.
Prop transaction= ad valorem (according to the
value)
MOT and DOA:
1st RM100k= 1%

RM100,001
RM100,001--RM500,000= 2%

Any amount excess of RM500k=3%

Charge: Loan sum=0.5% each copy=RM10.

RPGT

Gains from disposal of residential and commercial

properties are taxed under the RPGT.
Objective: to control speculation in landed
property and to curb any excessive rise in real prop.
It depends on the holding period of real properties.
Exemptions:
1. onceonce-inin-a-lifetime
2. disposal by way of a gift btn parentparent-child,
spouse, etc.

Rate of RPGT

Disposal in 1st year= 10%

Disposal in 2nd year=10%
Disposal in 3rd year=5%
Disposal in 4th year= 5%
Disposal in 5th year=5%
Disposal in 6th year= 0%

Caveat

Caveat is endorsed on the Issue Document of

title
Notice to the world that the person entering the
caveat has a claim to an interest in the land.
Prohibits any further dealing on the said land

Caveat

Private caveat: S 323

Lien Holders Caveat: s 322, if there is an issued
document of title which has been deposited as
security for loan. Form 19A
Trust caveat: s 332, may be entered by the R upon
application by the trustees. Form 19E (Perpetual
unless it is cancelled by the R.)
Registrar Caveat
S 329 (1): liable to pay compensation if suffers
damage or loss arising from the wrongful entry of
the private caveat.

How to Lodge Caveat

S 323 and 324 of the NLC:

Form 19B which has to be attested.
PC will bind the land for a period of 6 yrs.
Wong Kuan Tan v Gambut Dev Sdn Bhd
The caveator must satisfy the court that he had
caveatable interest in the land
Mexaland Dev Sdn Bhd & Ors v Score Option Sdn
Bhd & Ors
Merely relying on the JointJoint-venture agreement
did not confer a caveatable interest.

Conditions to extend the Caveat

1. Sufficient grounds for caveatcaveat- The onus of proof is on

the caveator.
caveator. ((Kump
Kump Sua Betong Sdn Bhd v Dataran Segar
Sdn Bhd
Bhd))
A. The applicant must satisfy that he has a caveatable
caveatable
interest in the land.
B. the evidence
C. to show on the balance of convenience
Urethane Systems Sdn Bhd v Quek Yak Kang
No caveatable interest as the claim was based on monetary
loss.
Peng DanaHarta Nasional Bhd v Astron ltdltd- Monetary losslossnot caveatable interest.

Withdrawal of a private caveat

S 327
1. by the caveator:
caveator: s 325: Form 19G
2. by the Registrar: s 326: Form 19C
3. by an order given by the court:

Removal of Caveat

S 325: by giving notice in form 19G and paying

the prescribed fee.

Removal of Caveat

By the Registrar: S 326 of the NLC

Procedure: Form 19H and pay the prescribed fee

Upon receiving, the R will serve a notice of intended
removal in Form 19C

To extend PC: s326C for an extension order to the
court.

Removal of the Caveat

By the Court: S 327 of the NLC

The only parties are caveatee and caveator the
aggrieved parties.
Luggage Distributors M Sdn Bhd v Tan Hor Teng &
Anor
If grounds are insufficient, the caveat must be
removed.

Charge

Security over the land.

Must be registered in the land office in order to
be valid, enforceable and binding.
The chargee has the right to apply for an order
to foreclose the land.

Entering a Charge

S 241 NLC, a charge may be entered on the

whole but not a part only or the whole but not a
part only of any undivided share or any lease.
Form 16A16A- to secure the repayment of a debt.
For a company to register: File in the form 34 of
the Companies Act 1965 within 30 days of the
creation of charge pursuant to S 108.
The registration of charge will create
indefeasible interest for the chargee.
chargee.

Chargee to apply for order for sale

The chargee has the right to sell the property in the event
the chargor is unable to repay the debt.
S 254 (1):
Breach for at least 1 month or such alternative period as
specified in the chargee;
chargee;
The chargor must be served a notice in Form 16D
16D-Upon the expiry of the such notice, the chargee would
have the right to apply for an order for sale of the land
S 255: Payable on demanddemand- Form 16E16E- 1 month still not
paid-- order for sale without F 16D.
paid

Specific Relief

If there is a breach of the T&C of a S&P:S&P:1. repudiation or rescission of the agreement

2. the payment of liquidated damages
3. to enforce a SP order.
The law governing the remedy of SP is the Specific
Relief Act 1950.
Palmerston Holdings Sdn Bhd v Chong Siew Eng (2007) 7
CLJ 56
The Pt was not entitled for a decree of SP: S&P did not
specifically provide the said relief and the Pt was
entitled to liquidated damages under the HDCLR 1966.

The Tribunal for Homebuyer Claims

Easier, cheaper and faster means of dispute resolution.

a) A claim is filed no later than 12 months from the date of:
(i) issue of the Certificate of Compliance of the property; or
(ii) the expiry date of the defect liability period as set out in the
SPA.
b) The SPASPA-housing accommodation built in a residential area.
c) Each claim does not exceed RM50,000 per cause of action
unless

(i) the claimant agrees to forgo the balance of the claim; or

(ii) the acquiescence of the developer is obtained in writing
for the matter to be heard at the Tribunal.
d) SPA is signed before 1 December 2002 can also be
considered provided the claims fulfill the criteria stated above;

Tenancy and Lease

Lease: the lessee holds an estate in the land during

the term of the lease. An interest or estate in land
confers the lessee with ownership of the leasehold
estate during the term of the lease.
S 5 of the NLC: leaselease- registered lease or sublease
of alienated land.
S 213 tenancy exempt form registration=
1. tenancy or subtenancy for a term not exceeding 3
yrs
yrs-- s 223
2. tenancy or subtenancy not exceeding 1 yryrprevious land law.

Differences btn a Tenancy and a Lease

Lease:
must be registered under s 222 (1) of the NLC
Exceeding 3 years
Where any subsub-lease relates to a part only of any
alienated landland- not exceed 30 yrs.
Tenancy:
Less than 3 years, s 213
Subtenancy must not exceed 3 yrs and/or the
tenancy period

Tenancy Agreement

S 223 (2): may be created verbally or in writing

Identify the landlord and tenant correctly
The verify that the landlord is the actual proprietor
All proprietors, to execute the Tenancy Agreement
Inquire : 1. deposit sum 2. utilities deposit 3. the
sewerage deposit.
Duration: not exceed 3 years.
Extension of tenancy period
Identify use of premise
Termination of the agreement

Fees for Tenancy

Monthly rent: for the 1st RM10k= 25%

minimum RM300
Next RM90k=10%
In excess of RM1000,000= negotiable but shall
not exceed 10%.

Stamp Duty on Tenancy

Below RM2400= exempted.

Rent x 1 yr= A, AA-RM2400=B, B
B250=C

Landmark Cases

Adorna Properties Sdn Bhd v Bonsoom Boonyanit

Tan Ying Hong v Tan Sian San & Ors
Dr M Mahadevan Mahalingam v S Lourdenadin &
Another case
Leong Lai Kuen v Sentul Murni Sdn Bhd
Kump Sua Betong Sdn Bhd v Dataran Segar Sdn Bhd.
Linggi Plantations Ltd v Jagathesan

Adorna Properties Sdn Bhd v Bonsoom

Boonyanit (2001) 1 MLJ 241

FC, Eusoff Chin, Wan Adnan

Adnan,, Abu Mansor Ali.
A purchaser in good faith and for valuable
consideration is excluded from the application
of the substantive provision of s 340 (3).
Such registered proprietor obtains immediate
indefeasible title to the lands.
Even if the instrument of transfer was forged,
the respondent nevertheless obtained an
indefeasible title.

Tan Ying Hong v Tan Sian San & Ors

[2010] 2 CLJ 269

FC revisited the Adorna case. ((Tun

Tun Zaki,
Zaki, Alauddin
Mohd Sheriff, Arifin Zakaria
Zakaria,, Zulkifli Ahmad
Makinudin,, James Foong).
Makinudin
Foong).
Adorna is no longer good law and in fact wrong,
uncertain, unjust or outmoded or obsolete.
The bench in the Adorna case had miscontrued
s340 and applied s 340(2) which led to erroneous
conclusion.
The court restored protection to original
landowners from losing their properties to forgers.

Dr M Mahadevan Mahalingam v S Lourdenadin

& Another case [1988] 1 CLJ (Rep) 168

SC, (Abd
(Abd Hamid Omar, Hashim Yeop Sani and
Syed Agil Barakbah
Barakbah))
The SC decided that the Ct has discretion to
grant Specific Performance.
The applicant must first prove to the ct that
under the circumstances the case b4 the ct if fit
and proper for the granting of SP.

Leong Kai Kuen v Sentul Murni Sdn Bhd

(2004) 5 CLJ 25

HC (James Foong
Foong))
The ct decided that the pt had a right to claim
for damages specified under a rescinded
contract.
The claim for damages was allowed only for
reasonable compensation not exceeding the sum
claimed by the Pt, which was to be assessed by
the SAR.

Kump Sua Betong Sdn Bhd v Dataran Segar

Sdn Bhd (1992) 1 MLJ 263

SC (Jemuri
(Jemuri Serjan
Serjan,, Gunn Chit Tuan, Charles).
An appeal from a judgment of the HC claiming the
removal of a private caveat.
The HC granted the application to remove the
caveat.
The SC allowed the appeal and the order is set
aside.
The SC laid down the principals that a caveator has
to show to the R when his private caveat is
challenged.

Linggi Plantations Ltd v Jagathesan (1972) 1 MLJ 89

PC (Lord Hailsham,
Hailsham, Lord Hodson
Hodson,, Lord Cross)
Wtr a vendor was entitled to forfeit a deposit paid
on a contract following its noncompletion by the
purchaser.
The terms of an agreement are to discover
therefrom the intention of the parties.
When the ct decided on the issues of liquidated
damages, rules of equity provide that the sum
provided in the contract should in substance be
genuine prepre-estimate of the damages likely to be
suffered and not a penalty.