Intervivos Transfer

Definition: A transfer of property from transferor to transferee without any monetary

consideration.
- Transferee receives ownership of property as a gift
- The basis of the transfer is “love and affection”
- Sec. 26(a), Contracts Act 1950: An agreement is valid if
- It is expressed in writing
- It is registered under the applicable law (NLC)
- It is made on account of natural love and affection between parties standing
in near relation to each other

- “Near relation”
- Re Tan Soh Sim: Adoption under Chinese custom does not give rise to a
relationship falling within the meaning of “standing in near relation”. It will
only be considered as standing in a near relation if the parties have a blood
relationship.
- Queck Poh Guan v Quick Awang: Intervivos transfer between mother and son
based on love and affection is valid.

- Whether the transferor can transfer only half portion of the land to the transferee
- Sec. 214(1), NLC: Transfer can only be carried out in respect of the whole of
undivided share or the whole piece of land.
- Peter Lai Kee Chin: A transfer of the half share of the land to his wife, and the
other portion to himself to make them both co-owners of the property in
undivided equal shares does not contravene Sec. 214(1).
Procedure:
1. Preparation
- No contract of sale needs to be drafted where there is no exchange of money
- Form 14A (Sec. 215(1), NLC)
- Sec. 208(1)(a): Details of the parties
- Sec. 43: A party must be a natural person of the age of majority
- Sec. 208(1)(b): Provide a Malaysian address if the party is living abroad
- Sec. 208(1)(c): Where transfer is to more than one party
- Sec. 209: Description of the land
- Sec. 209(1)(a): Administrative area
- Sec. 209(1)(b): Lot number
- Sec. 209(1)(c): Title of the land
th
- 10 Schedule must be observed

2. Execution and attestation

- Sec. 210(1): Parties involved must execute the document
- Sec. 210(2): Execution by natural person by signing or affixing a thumbprint
- Sec. 210(3): Execution by a corporation by affixing the seal of the corporation, or
secretary of the company and one director to attest the seal.
- Sec. 211: Every execution must be attested by the relevant officer specified under the
5th Schedule
- E.g: Magistrate, advocate and solicitor, notary public

- Para 3, 5th Schedule: A Malay Reservation Land can only be attested by the Land
Administrator.
- Only applies where parties are natural persons
- If a party is a corporation, attestation is waived
- Sime Bank Berhad: When signing of the document for a MRL by a
company, the requirement of attestation by a Land Administrator is
waived.
th
- Para 4, 5 Schedule: Where the instrument of charge is executed by a holder of a
Power of Attorney, the requirement of attestation only by Land Administrator is
waived.
- A charge instrument for MRL can be attested by an advocate and solicitor

3. Stamping and adjudication

- Document must be produced at the Stamp Duty Office for stamping in accordance
with the Stamp Act 1949.
- Sec. 16(1), Stamp Act: Stamp duty is payable even in an intervivos transfer
- Peter Lai Kee Chin: An intervivos transfer is subjected to the payment of stamp
duty.

- However, the Minister of Finance may exempt, reduce, remit stamp duties (Sec. 80,
Stamp Act)
- Transfer between spouses: Stamp duty is exempted through the Stamp Duty
(Exemption) Order 2007 presented through the 2007 budget by the Prime
Minister
- Transfer between parent and child: Stamp duty is remitted by 50% through the
Stamp Duty (Remission) Order 2002

- Despite the exemption, the document still needs to be submitted to the Stamp Duty
Office for confirmation of exemption by the Collector.
- Without such confirmation and signature of the Collector, the document will
still be deemed as not fit for registration (Sec. 296, NLC)

- Sec. 296: For the purpose of registration, it must be an original duly stamped
instrument of dealing (sufficient stamp payable on the instrument of dealing in
accordance with the Stamp Act)
- Adjudication: A process where the transferor (or his solicitor) sends a relevant
document to the Stamp Duty Office for valuation of the property and to determine
the stamp duty payable on the transfer form.

- Required documents:
- Completed Form 14A
- Duplicate copy of IDT
- 5 copies of PDS 15
- Fee of RM10

- After all the documents are sent to the Stamp Duty Office, an adjudication number
will be stamped on the Form 14A and a Notice of Assessment will be issued.

- Stamp duty of transfer is calculated based on item 32, First Schedule, Stamp Act.
- Calculation of stamp duty:
- The amount to be paid is dependent on the value of the property as under the
Stamp Act

Property value Stamp duty

For the first RM100,000 1%
For the remaining amount in excess of RM
100,000 but not exceeding RM 500,000 2%
(RM100,001 – RM500,000)
For the remaining amount in excess of
3%
RM 500,000 (RM500,001 +)

- Steps (where purchase price exceeds RM500,000):

- i) RM100,000 x 1% = RM1000
- ii) Remaining amount not exceeding RM500,000 x 2% = RM X
- iii) Remaining amount in excess of RM500,000 x 3% = RM Y
- iv) RM1000 + X + Y = Stamp duty payable

4. Registration
- Transferor must present the document for registration at the Registry or Land Office
(Sec. 292(1), NLC)
- Sec. 293(1): Document must be accompanied by a registration fee
- Sec. 292(4): Death of any person of whom any instrument has been executed shall not
affect the validity of the instrument to be presented for registration.
- Once the transfer has been registered, the title may be collected from the Registry or
Land Office.
Transfer by Contract of Sale
- A transfer is executed only after the terms and conditions of the sale have been agreed
upon.
- The transferor (registered proprietor) will part with his title upon payment of
monetary consideration (“purchase price”) made by the transferee.
- Two types of transfer by contract of sale: Private treaty (sub-sale) and
regulated contract of sale.

- A contract to sell property is still valid and enforceable where it is made orally.
- Diamond Peak Sdn Bhd v Tweedie: An oral contract for the sale of immovable
property is valid and enforceable.

- Sandrifram Sdn Bhd: All the terms and conditions of the sale had been agreed upon
by the parties. Where it was discovered that the property is valued higher than the
sale price, the vendor refused to execute the agreement. The court granted the
purchaser’s application for specific performance of the sale agreement.

- Advantages of a written SPA:

- Both parties can minimise any dispute
- Parties can easily identify rights and obligations
- Parties can ascertain available remedies upon breach
- A duly stamped SPA is admissible as evidence in court
- Each party must appoint his own solicitor
- Legal Profession Act prohibits solicitors from acting for both parties
- It will be a conflict of interest where a solicitor acts for both, the vendor and
solicitor
Private treaty: Transfer between a registered proprietor who wishes to dispose his property
in order to obtain money and purchaser interest to own that property.
1. Pre-contractual matters
- Duties of the vendor’s solicitor:
- A registered proprietor will consult his solicitor as to how disposal of the
property can be done after negotiating with the prospective purchaser
- The vendor’s solicitor must obtain details of the vendor, property, and terms
of the SPA, and clarify if a SPA has been concluded.
- He must ascertain:
- The vendor’s status in relation to the land
- The capacity of the vendor will determine as to whether he will
need to make any application for consent from any relevant
authority beforehand.
- If the vendor is registered as the holder of a Power of Attorney,
he must be subjected to the Deed of Power of Attorney
executed between him and the donor. Thus, his power to deal
 with the land is limited as granted to him under the Deed, and
exceeding the power will cause the contract to be void.
- Material details of the land
- Restriction in interest: Where the land is subject to a RII, the
vendor cannot deal with it unless he obtains consent from the
State Authority
- Non-compliance will render the transfer as null and void
- Estate land
- Sec. 214A, NLC: In order to transfer any estate, the
proprietor must obtain consent from the Estate Land
Board.
- Rengamah Rengasamy: The contract to sell the land is
conditional upon the approval of the Estate Land Board.
- It is the vendor’s duty to apply for the consent from the relevant
authority. Thus, it is the duty of the vendor’s solicitor to advise
the vendor to make the necessary application to facilitate the
transfer.
- Charge
- The vendor’s solicitor must inquire if the property is
subject to any charge. This is to notify the purchaser that
the land is used as a security and is still subject to a
charge in favour of a chargee (bank) and help the
purchaser redeem the property.
- Terms of SPA
- The vendor’s solicitor must ascertain the important terms of the
SPA such as the purchase price, duration, and deposit in order
to assist him in liaising with the purchaser’s solicitor.

- Duties of the purchaser’s solicitor:

- To ensure that the title is registered in the name of the purchaser upon full
payment of the purchase price to the vendor.
- In order to do so, he must ascertain:
- Details of the purchaser
- To ensure that the purchaser falls within Sec. 43, NLC, and is not
prohibited from being registered as a proprietor of any property.
- Anthony Ting Chio Pang: The solicitor was negligent where he failed to
ascertain his client’s identity by merely relying on the report of a lost
identity card.

- Details of the property

- The purchaser’s solicitor must contact the vendor’s solicitor and obtain
particulars of the property in order to conduct a land search.
- Land search:
- Private land search (Sec. 384, NLC)
 - Official land search (Sec. 385, NLC)

- A land search is conducted for the purposes of:

- To get the latest detail of dealing of the land in the RDT
- To ascertain the status of the land and the registered proprietor
- To ascertain whether the land is subjected to any
encumbrances or any forfeiture proceeding
- Where the property is still subject to a charge, the
purchaser’s solicitor should request for a bank
statement from the vendor (redemption statement)
- To determine whether the land is subject to any caveat or
prohibitory order.
- To determine whether the land is subject to an acquisition by
the government under the Land Acquisition Act
- The cheapest way of obtaining accurate information
- RDT is the original and genuine document issued by the
State Authority
- Sec. 89, NLC: Priority is given to RDT in the case of any
dispute

- Conducting a land search will enable the purchaser’s solicitor to acquire

as much knowledge as possible regarding the land
- In the event of any dispute, failure to conduct a land search will cause
the solicitor to be charged under professional negligence
- Ngeoh Soh On: The solicitor did not conduct a land search and
was not aware that the land was subjected to a land acquisition.
This caused the purchaser to suffer losses as the compensation
was lower than the purchase price. The solicitor was said to
have failed to use reasonable care and skill in discharging his
duty as a competent and prudent practitioner.
- Chow Yoong Hong: A purchaser is entitled to insist that a land search is
conducted before the purchase price is paid.

- However, in the conduct of a private land search:

- Tirai Kristal Sdn Bhd: Any errors found in the results of the
private land search conducted will not entitle a party to claim
for compensation under Sec. 386.

- Enquiries
- The purchaser’s solicitor should make the necessary enquiries from
other relevant authorities (e.g: TNB, Indah Water) to determine
whether the relevant property has any arrears in payment.
- Any arrears in payments may be set off from the purchase price
- Whether the renovation done (if any) complied with the relevant laws
 - Site inspection
- The purchaser’s solicitor should advise the purchaser to inspect the
land personally in order to identify the place before purchasing it.
- If the land is purchased together with a building, it must be ascertained
whether there is any tenant, lessee or occupier.

- The purchaser’s solicitor must conduct a bankruptcy search on the vendor to

ensure that he is not a bankrupt or a fraudster

2. Execution of SPA
- In practice, the purchaser’s solicitor will prepare the relevant documentation as the
instrument of transfer will also be prepared by him.
- In order to minimise the dispute, the purchaser’s solicitor must ensure that the
SPA is properly drafted

- Four components to a valid SPA:

- Date of the agreement
- Recital
- Details of the parties and property
- Any existing encumbrances
- Status of parties to ensure they fall within Sec. 43
- If an executor/administrator or trustee enters into a contract to sell the land,
the contract is ineffective until a court order allowing it is granted.
- Factors taken into consideration:
- Reasonableness of the price – lapse of time
- Beneficiaries are of the age of majority and have agreed to the
sale at a certain price.
- Consent has been obtained from all the adult beneficiaries (Gan
Khay Beng)
- Terms and conditions of the sale (fundamental part)
- Payment of deposit
- Conditional terms
- State consent must be obtained
- Payment of purchase price and mode of payment
- Duration of payment
- Within 3 months free of interest (completion date) plus another 1
month extension period with interest (extended completion date) at a
mutually agreed percentage
- General clause
- Include that “time is of essence to the contract”
- Helps determine whether the injured party can repudiate the contract
 - Obligations of vendor
- To give an assurance that the title is under his name and will be
transferred free from encumbrances
- To not refuse to proceed with the sale at the agreed purchase price
- To undertake to apply for the necessary consent and execute all the
relevant documents
- Obligations of purchaser
- To pay agreed purchase price within stipulated time
- To determine the method for payment of balance of purchase price
- In the event of default, to determine whether to pay interest or treat
the agreement as null and void, and forfeit the deposit
- Miscellaneous terms
- Status of the SPA in the event of:
- Frustration of contract
- Breach of contract
- Consent rejected by State Authority
- Impossible to execute the contract
- Land is reverted to the State Authority
- Remedies available to an injured party where there is a breach of the SPA
- Repudiation or rescission of the agreement
- Payment of liquidated damages
- Enforce an order of specific performance under the Specific Relief Act

- Palmerston Holdings Sdn Bhd: Where the SPA did not provide for the
relief of specific performance, the plaintiff was only entitled to
liquidated damages.
- Signing and attestation clause
- Where both parties have agreed to the SPA, both parties must execute the
agreement before their solicitors and it must be attested by the qualified
persons

- Deposit: Part payment of the purchase price paid by the purchaser upon signing of the
SPA.
- Sun Properties Sdn Bhd: It is an advanced payment by the purchaser in favour
of the vendor.
- Functions:
- To ensure the purchaser performs and completes the sale transaction
- To indicate that the purchaser is serious about completing the sale
- As part payment of the purchase price
- To entitle the purchaser to caveat the land
- As liquidated damages to the vendor in the event of a breach by the
purchaser
 - Reasonable amount:
- In practice, 10% - 20% of the purchase price is considered as a
reasonable amount for deposit
- Linggi Plantations: Paying more than 10% for the deposit is still
considered as valid and enforceable.

- Forfeiture of deposit:
- A forfeit of the deposit in the event of breach only applies where a
forfeiture clause is expressly provided in the SPA.
- If the vendor cancels the SPA, the purchaser has the right to ask
for a refund of the deposit and 10% liquidated damages
- If the purchaser defaults in payment, the vendor may forfeit the
deposit and ask for 2% liquidated damages

- Once a forfeiture clause is incorporated, the vendor need not prove actual loss.
- Morello Sdn Bhd v Jacques (International) Sdn Bhd: The vendor is not
required to prove that he had suffered damage before forfeiting the
deposit.
- Kulim Rubber Plantations: The obligation to pay the purchase price is a
fundamental obligation which goes to the root of the contract, thus
failure to do so will terminate the contract and forfeit the deposit.
- Happy Shopping Plaza v Sun Properties Sdn Bhd (on appeal): Once a
forfeiture clause is incorporated, it is lawful for the vendor to forfeit
the deposit regardless of the amount.
- RM1 million as deposit was allowed to be forfeited
- Lee Yew Hin: Even if the amount is more than 10% of the purchase
price, it may be forfeited.

- Stakeholder: A person who receives money and documents pending the completion
of certain tasks.
- A stakeholder is appointed by the parties to hold the money or title deed and
ensure the documentation is perfected and money is available to pay upon
registration.
- He helps to facilitate a smooth completion of the transaction.
- Nature of undertaking:
- Tan Suan Sim: A stakeholder undertakes to release the purchase price
only once the transfer has been duly registered, and in the event that
it cannot be registered, the money will be refunded and the title deed
returned.
- A breach of the undertaking is a disciplinary offence (Sec. 92(2)(b),
Legal Profession Act)
 - Status of a stakeholder:
- OCBC v Lee Lee Fah: Where the solicitor absconded with the purchase
price, as the money had been paid to the stakeholder, the purchaser is
deemed to have transmitted payment to the vendor.
- The status of the stakeholder is that of an independent party
regardless of who appointed him.

3. Post-SPA
- The purchaser’s solicitor must ensure that the SPA and Form 14A are completed and
duly executed and that the deposit has been paid.
- Once completed the documents must be attested in accordance with Sec.
211(1), (2), (3) whereby it must be witnessed by person specified under 5 th
Schedule, NLC.

- Private caveat: To protect the purchaser’s interest over the land before the transfer is
registered, the purchaser’s solicitor should lodge a private caveat on behalf of the
purchaser.
- In order to do so, the purchaser must show that he has a caveatable interest
over the land as required under Sec. 323(1)(a)
- Ong Chat Phang: A purchaser has caveatable interest once he has
signed the SPA and made payment of deposit
- Thus, a valid SPA is proof that the purchaser has a caveatable
interest (Macon Engineering)

- In order to lodge a private caveat:

- Sec. 323(2): An application in Form 19B must be made and attested in
accordance with Sec. 211 and 5th Schedule, NLC.
- Sec. 323(3): The applicant must state the nature of his claim verified by
a Statutory Declaration and accompanied by a prescribed fee.
- A statutory declaration requires several particulars to be stated:
- Full name
- Amount of deposit
- Particulars of property and vendor
- Caveatable interest of applicant
- Signed before the Commissioner for Oath

- Form 19B and the Statutory Declaration must be registered at the

relevant Land Office
- A caveat will protect the purchaser’s interest (caveator) once it is
registered
- Sec. 328, NLC: It will last for a period of 6 years
- Real Property Gains Tax (RPGT): A form of tax levied by the Inland Revenue on capital
gains derived from the disposal of real property.
- A vendor is liable to pay RPGT if he makes a gain from the disposal, sale or
conveyancing of real property made within 5 years.

- If the vendor is liable to pay RPGT:

- Sec. 13(2): The purchaser must file Form CKHT 2A with Inland Revenue
with 60 days of the conclusion of the SPA and pay the RPGT.
- The amount is considered part of the purchase price.
- Pending reply from authorities, the purchaser’s solicitor will
retain 2% of the deposit. If the property is subject to RPGT, 2%
will be forwarded to the authorities; if not, 2% will be forwarded
to the vendor or vendor’s solicitor.

- RPGT is taxed on the net chargeable gain

- Calculation for RPGT:

- RPGT rates for individuals (2014)

Within 3 years 30%

Within 4 years 20%
Within 5 years 15%
After 5th year 0%
(5 % if company)

- Schedule 5, RPGT Act:

i) Gross chargeable gain = selling price – purchase price
ii) Net chargeable gain = gross chargeable gain – allowable expenses

- Allowable expenses (incidental costs for disposal of property; any cost incurred
by vendor after having acquired the property in order to sell it):
- Legal fees
- Sales commission (Real estate fees)
- Administrative fees (insurance)
- Repairs and renovation

- Exemption under Sec. 9, RPGT Act: An individual may obtain an exemption as

per Schedule 4, Para 2, RPGT Act.
- Waiver exemption of 10% of chargeable gains OR RM10,000
(whichever is higher) is not taxable.

- Tax payable = RPGT rate x (Net charegeable gain – exemption waiver)

 - Adjudication and stamping
- Once the SPA and Form 14A have been executed, they must be sent for
adjudication at the Stamp Duty Office.
- Required documents:
- Form 14A
- Duplicate copy of IDT
- 5 copies of PDS 15
- SPA
- Fee of RM10

- The authorities will then assess the value of the property in order to impose
an appropriate stamp duty ad valorem on Form 14A
- The stamp duty ad valorem will be calculated depending on the market
price and purchase price (whichever is higher)
- A Notice of Assessment will then be issued

- Sec. 47A, Stamp Act: Payment must be made within 30 days

- Upon payment of stamp duty, a final title search must be conducted by the
purchaser’s solicitor.
- The private caveat lodged by the purchaser’s solicitor must be removed through Form
19G.
- Before the Form 14A can be registered, the balance of the purchase price must be
paid by cash or loan.
Payment by cash where property is subject to an existing charge:
- Parties:
- Vendor, purchaser, purchaser’s solicitor (PS), vendor’s solicitor (VS), vendor’s
bank’s solicitor (VBS)

- Step 1:
- Vendor must obtain consent from State Authority if property is subject to a
restriction in interest
- Purchaser’s solicitor must prepare Form 14A and CKHT 2A

- Step 2:
- PS must instruct the VS to obtain redemption statement from the vendor’s
bank
- Redemption statement: An account statement issued by the vendor’s
bank stating the outstanding amount due and payable by the vendor
and undertaking to refund the redemption amount if the transfer
cannot be registered.
- Redemption amount: Outstanding amount owed by the vendor to his
bank
 - Step 3:
- VS receives the redemption statement from the vendor’s bank and sends it to
the PS

- Step 4:
- PS receives the redemption statement and pays the redemption amount to the
vendor’s bank.
- VBS will prepare Form 16N for the discharge of charge and have it duly
stamped (Item 65, First Schedule, Stamp Act)

- Step 5:
- PS will lodge the private caveat

- Step 6:
- The VBS will send the stamped Form 16N, original IDT, Quit Rent receipt, and
fees to the PS.

- Step 7:
- The PS receives the documents sent from VBS and will send the Form 19G, 16N
and 14A for registration.
- Sec. 293, 294, 301A & 306b, NLC applies

Payment by bank loan where property is subject to existing charge:

- Types of loans:
- Conventional loan:
- Loan agreement
- Form 16A
- Islamic banking loan (no interests and no third party charge):
- Facility agreement (FA)
- Form 16A
- Property sale agreement (PSA)
- Property purchase agreement (PPA)

- Parties: Vendor’s solicitor (VS), purchaser’s solicitor (PS), vendor’s bank (VB),
purchaser’s bank (PB), vendor’s bank’s solicitor (VBS), purchaser’s bank’s solicitor
(PBS)

- Step 1:
- PS must prepare Form 14A and CKHT 2A
- PBS must prepare Form 16A, FA, PSA, PPA
 - Step 2:
- PBS will instruct VS to obtain redemption statement from VB
- Upon request, VB will send redemption statement to PBS

- Step 3:
- PB, upon receipt of the redemption statement, will pay redemption amount to
VB and lodge a private caveat to protect the interest of the bank before
registration of transfer.

- Step 4:
- VB, upon receipt of the redemption amount, will instruct VBS to prepare Form
16N
- VBS will prepare Form 16N and have it duly stamped

- Step 5:
- PS will send duly stamped Form 14A to be PBS
- VBS will send duly stamped Form 16N, Original IDT, Quit Rent receipt and fees
to the PBS

- Step 6:
- PB, upon receipt of documents, will send for registration Form 19G, 16N, 14A,
16A
- Sec. 293, 294, 301A & 306b, NLC applies

Stamp duty for a loan:

- For a conventional loan, the documents which require stamping are:
- Loan Agreement
- Form 16A
- For an Islamic banking loan, the documents which require stamping are:
- Facility Agreement (FA)
- Form 16A
- Property Sale Agreement (PSA)
- Property Purchase Agreement (PPA)(exempted from stamp duty by virtue of
the Exemption Order 1987)

- In order to calculate the stamp duty for a loan, the principal document must first be
determined:
- If other than Form 16A is taken as the principal document and stamped with
ad valorem stamp duty under item 27(a)(iii), Form 16A must be endorsed at
the Stamp Duty Office.
- Sec. 12(b), Stamp Act: In order to waive Form 16A from its original
stamp duty, FA and Form 16A must be submitted to the Collector of
Stamp Duty for endorsement.
- Calculation of stamp duty where FA is the principal document (item 27(a)(iii)):
5
Loan amount x (1000) = Ad valorem stamp duty for principal document
(only applicable to original copy)

Every subsequent copy = RM10 per copy (item 34(b))

- Sec. 35, Stamp Act: General exemption under the First Schedule
- Documents executed by the Government of Malaysia:
- If the financier under the security documents is the Government of
Malaysia, stamp duty on all the documents is waived.

- Sec. 15, Stamp Act: Waiver of stamp duty where transfer is from parent company to
subsidiary company
- Exemption to co-operatives:
- Kooperasi Serbaguna: Exemption is not obtained as of right but must be
applied for by the parties during the submission for endorsement
Transfer by Regulated Contract of Sale: A contract made between a developer, a registered
proprietor whose income is generated from developing and selling properties, and a
purchaser who is interested to own that property.
Housing Development (Control and Licensing) Act:
- Sec. 1: Only applies in West Malaysia
- Sec. 3: Housing accommodation, housing developer, housing development
- To protect purchasers of housing accommodation in housing development against
unscrupulous developers (South East Asia Housing Corp Sdn Bhd)

- Mechanism to protect housebuyers:

- Developers must fulfil a prerequisite condition before they can develop and
sell houses to buyers
- Apply license (Sec. 5), have capital of no less than RM250,000 (Sec.
6(1)(a))
- Developers must open and maintain Housing Development Account for any
payment for/on account of the project (Sec. 7A(1))
- Must obtain an advertisement and sale permit before they can start to
advertise for the sale of the house (Rule 5(1), HDR)
- Must follow in verbatim the SPA under the HDR
Housing Development Regulations:
- Developers must adopt the standard SPA in:
- Schedule G: Property with land (landed property) in progress
- Schedule H: Parcel of property (unit of subdivided building) in progress
- Schedule I: Property land (landed property) which is completed (build-then-
sell)
- Schedule J: Parcel of property (unit of subdivided building) which is completed
(build-then-sell)

- Rule 11(3): Any variation can only be made with consent from the Ministry of Housing,
otherwise it will invalidate the agreement
- Chan Cheng Sdn Bhd: Any alteration or variation will invalidate the agreement
Schedule G:
- Preamble: Description of title, developer’s details, purchaser’s details, license number
of developer.
- Clause 1: Free from agricultural or industrial use
- Clause 3 & 4: Purchase price and payment must be made within the time stipulated in
the schedule of payment
- Clause 8: Time is of the essence

- Clause 22: Developer must deliver vacant possession to purchaser within 24 months
from the date of agreement in the manner of delivery (Clause 23)
- Clause 23(1): A certificate must have been issued stating that the building is duly
completed and water and electricity are ready for connection
- Clause 24: Developer must have applied for a certificate of fitness
- Salmah Sulaiman: Water and electricity is said to be available and ready for
connection once deposit has been paid.

- Clause 22(2): Late delivery of vacant possession

- Developer must pay liquidated damages at 10% per annum of the purchase
price from the expiry date of delivery until purchaser takes vacant possession

- Calculation of liquidated damages for late delivery:

Purchase price x 10% x amount of late days

365

= Liquidated damages to be paid to purchaser

- Clause 25: Defect liability period

- 4th Schedule of Agreement (description of building)
- Clause 25(1): Any purchaser can claim any defective work against the
developer within 24 months from the date the purchaser takes vacant
possession
- Within 30 days from the complaint, the developer must repair the
defect
- Failure to do so will allow the purchaser to repair it, the costs of which
must be borne by the developer

- Sec. 16B, HDA establishes the Tribunal for Homebuyers:

- The tribunal is governed by the Housing Development (Tribunal For
Homebuyer Claims) Regulations 2002
- It is to regulate proceedings in a tribunal in order to hear all complaints made
by a purchaser against the developer

- Rule 3, Tribunal Regulations: It has jurisdiction to hear any claims brought by

purchasers not later than 12 months from the issuance of CF or expiry of the
defect liability period

- Sec. 16M, HAD: The Tribunal has jurisdiction to hear claims made under Sec.
16L which does not exceed RM50,000 subject to limitations under Sec. 16N

- Westcourt Corporation Sdn Bhd: The tribunal has retrospective effect to hear
claims made before 2002 as the regulation is a social regulation and aims to
protect the homebuyers.
Transfer of Property without Title
Assignment from registered proprietor (developer):
- Where the beneficial owner is buying property form the registered proprietor, the
parties do not have to sign a Deed of Assignment by way of Transfer as there is no
transfer of tile involved where the title has yet to be issued (Master Title still exists)
- The registered proprietor must apply for a separate IDT/Strata Title and later register
the beneficial owner as the registered owner of the unit.

1. Preliminary steps
- PS must obtain all the relevant details of the project – can be done by contacting the
developer
- Includes purchaser’s details, developer’s details, property details, area of
Master Title, bridging financier’s details (if any)
- PS must conduct a land search on the Master Title to verify whether the land is
encumbered
- PS must prepare:
- 4 copies of SPA, the original cost of which must be borne by the developer
(Indrani Renganathan)
- SPA can be either one of the Schedules
- Original and duplicate copy for purchaser
- 1 copy for file’s reference
- 1 copy for developer’s record purposes
- Deed of Mutual Covenant
- Agreement between the purchaser and developer of the use and
maintenance of common property
- Deliberates on rights and obligations over common property
- Stipulates amount of service charge payable by the purchaser
- It only covers parties privy to the contract
- Does not extend to second beneficial owner

- PS, upon execution of the SPA, must send it for stamping and pay the duty of
RM10 (item 4, SA)

2. Purchaser may opt to make payment by way of cash or loan

- Payment by cash: Made to developer upon receipt of the architect’s certificate as
proof that the progress work has been duly completed and certified

- Where payment is made by way of cash, the PS must obtain:

- From the developer:
- Letter of undertaking
- To complete and deliver the house within 3 years from the signing of
the SPA
- To deliver a duly registrable Form 14A upon issuance of IDT/Strata Title
 - Acknowledgement receipt for payment of deposit and progress
payment

- From the bridging financier:

- Letter of Disclaimer cum Letter of Undertaking which contains:
- An undertaking to exclude the purchaser’s unit from any foreclosure
action in the event of default by the developer
- Redemption amount that needs to be paid by the purchaser to redeem
his particular unit
- Only upon payment of redemption amount can the disclaimer
be invoked

- Letter of Undertaking: A letter to confirm and undertake to do something in the future

by relevant parties
- Provides certainty as to who shall be responsible to prepare and perfect the
Transfer and Charge upon issuance of a separate IDT
- Madam Packiam Ramalingam: It is significant as it is an unequivocal
declaration of intention addressed to someone who places reliance on it
especially when it was given by a solicitor.
- Re A Solicitor: Failure to honour an undertaking is a professional misconduct
and may be enforced upon an application to the court (Halsbury)
- Re Choe Kuan Him: Law and practice relating to solicitor’s undertakings in
Malaysia is the same as in England
- Letter of undertaking given by parties other than solicitors carries no legal
obligation, but acts as an assurance to the beneficial owner.

- Payment by bank loan: SPA is given to the purchaser to enable him to apply for a loan
i) Letter of instruction:
- A letter form the lender (bank) addressed to the financier’s solicitor (PBS) to
prepare security documents for a loan offered to the borrower.
- Attached together is the letter of offer of the loan addressed to the borrower
(purchaser) and a copy of the SPA

ii) The PBS must inform the purchaser’s solicitor once the loan has been approved

iii) Where payment is made by way of loan, the PBS must request for a Letter of
Undertaking from:
- Purchaser’s solicitor:
- Upon issuance of IDT/ Strata Title, to forward to the PBS the duly adjudicated
and stamped MOT together with the registration and penalty fees.
- Provided that the purchaser (borrower) has instructed him to do the
same
 - Provided that the conditions precedent are complied with (when title
has been issued):
- MOT has been duly executed
- Stamp duty and penalty fees payable have been deposited
- Quit rent and assessment receipt for the present year have
been forwarded
- No circumstance which will cause the transfer to be void
- Property is still assigned by way of charge
- The purchaser’s solicitor is still assigned by way of charge
- The purchaser’s solicitor is still the acting solicitor
- To confirm whether consent is necessary from the State Authority in order to
effect the transfer

- Developer:
- To confirm that the differential sum has been paid
- To confirm there will be no objection to the assignment of the unit once the
loan amount is released
- To confirm the unit is erected on the Master Title and whether it is charged to
any bridging financier
- To ensure the bridging financier forwards to the PBS a Letter of Disclaimer to
exclude the unit from any foreclosure proceeding upon payment of
redemption sum
- To confirm the redemption amount payable will constitute progress payment
towards the purchase price
- Not to further charge, lien or other encumbrances, without the PBS’ prior
written consent
- To forward to the PBS or bank the separate IDT/strata title upon its issuance
with a valid registered transfer in the purchaser’s name to allow the charge to
be registered.
- To obtain the necessary consent to transfer and charge from the appropriate
authorities
- To give details of its Housing Development Account
- To confirm that it is not agreeable to the lodgement of a private caveat
- To refund all monies released to the PBS if:
- Deed of Assignment cannot be registered
- Housing project abandoned or suspended
- Non-completion of the unit
- Purchaser is an undischarged bankrupt
- Consent to transfer and charge is not obtained
- To enclose the following to the PBS:
- Copy of current year quit rent receipt
- Copy of current year assessment receipt
- Copy of master title
- Copy of contractor’s all risk policy
- Bridging Financier
- To undertake to exclude the unit from any foreclosure proceeding subject to
the redemption amount being paid
- To refund the monies payable as a redemption sum in the event the discharge
of charge cannot be registered
- To release the unit from any claims to enable a certificate of sale to be
registered (Letter of Disclaimer)

iv) The PBS must:

- Conduct a bankruptcy search at the Malaysian Department of Insolvency on
the borrower and the guarantor (if any)
- Pending result of the bankruptcy search, a Statutory Declaration for
owner occupancy/own business must be prepared
- Prepare the bill of cost for the fee of the loan documentation for the borrower

v) Preparation of security and loan documentation:

- Where the only title connected to the unit the Master Title, and no registration
of documents is involved, the only way to protect the financier’s interest is
through a lodgement of caveat
- However, developers may not agree as they are in the process of applying for
a subdivision of separate IDT/strata title
- PBS will conduct a land search on the Master Title to ascertain the registered
proprietor. Should the registered proprietor consent to the lodgement of
caveat, the Letter of Consent must be endorsed in the Deed of Assignment.
- Security documents to be prepared by PBS:
- Loan Agreement (LA)
- Between the borrower (purchaser) and lender (bank)
- It contains the terms and conditions of the loan
- Deed of Assignment by way of charge (DOA)
- Between the bank and borrower (purchaser)
- Borrower assigns the rights and liabilities of the
property to the lender as security for the loan
- Temporary in nature until the IDT/strata title is issued at which
point it will be replaced with a charge document
- Power of Attorney (PA)
- Between the bank and borrower (purchaser)
- Empowers the bank as an Assignee to deal with the property in
the event of default by the Assignor
- Comes to an end upon full payment of the loan or issuance of
the IDT/strata title
- Must register with the High Court in order for it to be effective

vi) Unless expressly prohibited by the developer, PBS will lodge a private caveat as a
temporary security for the bank
 - The private caveat will prohibit any subsequent dealings by the developer
- Documents: Form 19B, Statutory Declaration, Form 19G
- Upon issuance of separate IDT/strata title, the private caveat is replaced by a
charge over the title as security for the bank

vii) Execution of documents

- Borrower must sign LA, DOA, PA
- Terms of loan must be explained to the borrower
- Lender must then sign LA, DOA, PA, Form 19B, Statutory Declaration, Form 19G

viii) Stamping of documents

ix) Registration of PA with the High Court

- Receipt must be kept for when drawdown is advised

x) Present private caveat for registration

xi) Advise drawdown for release of payment by the bank according to the Schedule
in the SPA
- Checklist:
- Original SPA
- Letter of Disclaimer
- Letters of Undertaking
- Land Search
- Bankruptcy Search
- Original Loan Agreement
- Original Deed of Assignment
- Acknowledgment for Power of Attorney
- Receipt from Land Office for private caveat

xii) After advising drawdown, PBS will deliver DOA to the developer
- PBS will give a stamped copy of the LA, DOA, PA to the borrower, and keep a
copy each for filing
Assignment from a beneficial owner (sub-sale): A sale between the first purchaser and the
second purchaser
- A beneficial owner is free to dispose the unit that he has purchased to any interested
party despite the title not having been issued
- The beneficial owner may assign his rights and interest in the property to another,
subject to a notice given to the registered proprietor
- The notice is to enable the registered proprietor to put on record the last person
registered to the unit
- Upon issuance of title, the MOT can be carried out in favour of the last person
on the records
- The assignment of rights is carried out by signing the Deed of Assignment by way of
Transfer

- LYL Hooker Sdn Bhd: The developer’s consent is not necessary to create a valid
assignment
- In practice, the PBS will obtain the developer’s consent to ensure the new
purchaser will be able to obtain a transfer of property upon issuance of title
- Before the consent can be endorsed in the DOA, the developer will require the
existing owner to settle the outstanding service charges and management fees
before any assignment can be allowed.
- Item 12(2) of Schedule H and Lim Seang Mee v Keepahead Holding Sdn
Bhd: Maximum amount of the administrative fee is RM 500 or 0.5%
whichever is lower.

- Sec. 22D(2), HDA: Only a notice is required to be given for any intended transfer of the
unit
- The notice must be delivered at or after the conclusion of the SPA between the
assignor and the new purchaser accompanied by:
- Duly stamped SPA
- Duly executed DOA by way of Transfer
- Full payment of all sums and outgoings due to the developer under the SPA

- PS’ duties:
- Conduct land search on the Master Title
- Obtain from the vendor:
- A copy of the Original SPA
- A copy of all the security documents
- Prepare (with consent of the vendor and VS)
- SPA
- Deed of Assignment
- Assignment of rights originally given by the original SPA over the
unit to the purchaser
- Stamp Duty proforma (Sec. 5 Form)
- CKHT 2A
- Execute and forward to VS:
- SPA and DOA (to be executed by the vendor)
- Deposit payable to the vendor
- Stamping of SPA of RM10 (item 4, Stamp Act)
- DOA will not be sent for stamping until loan or money for payment is
made available

- Where payment is made by way of cash:

i) Upon receipt of the balance purchase price, the PS will require:
 - Developer:
- To give consent to the assignment by endorsement of consent
to the DOA
- To confirm that the last person to be registered is the beneficial
owner
- To undertake that upon issuance of title, a duly registrable Form
14A will be delivered
- To confirm whether the Master Title and unit is encumbered
- Vendor’s solicitor:
- To confirm whether the unit is encumbered
- To undertake to refund the money in the event the transfer
cannot be obtained
- Vendor’s bank
- To provide the Redemption Statement and a Letter of
Undertaking
- To deliver a Deed of Receipt and Reassignment upon
receipt of redemption amount
- To refund the money if the assignment cannot be
effected

ii) PS must lodge a private caveat

iii) PS must send duly executed DOA for adjudication if consent has been endorsed
by developer
iv) PS must send PA for endorsement at High Court
v) PS must forward the balance purchase price to the VS

- Where payment is made by way of loan:

i) PBS must conduct a land search on the Master Title
ii) PBS must notify PS upon approval of loan
iii) PBS must obtain Letters of Undertaking from:
- Vendor’s bank:
- Redemption statement and Letter of Undertaking
- Purchaser’s solicitor:
- To confirm that the differential amount is settled
- To deliver the strata title/IDT and Form 14A upon its issuance
- Vendor:
- To refund the loan sum in the event the assignment cannot be
perfected
- Developer:
- To provide confirmation at the bridging financier as to whether
private caveat can be lodged
- To provide reason for prohibiting lodgement of private caveat
iv) PBS must conduct a bankruptcy search and winding up search
 v) PBS must prepare security and loan documents, which must then be executed:
- Conventional Loan: Loan Agreement, DOA, PA
- Bai Bithamin Ajil: FA, DOA, PA, Property Sale Agreement (PSA),
Property Purchase Agreement (PPA)
- Musyarakah Mutanaqisah: FA, DOA, PA
vi) Where the developer prohibits a lodgement of caveat before any payment,
PBS must make sure all security documents have been signed and bankruptcy
search obtained
vii) Upon delivery of the Deed of Receipt and Reassignment, all the security
documents can be stamped
- Prior to its delivery, unit is still legally assigned to the vendor’s bank
viii) PBS must ensure that the necessary documents are available and submitted
for safekeeping with the purchaser’s bank
- Executed security documents
- Letters of Undertaking
- Bankruptcy and winding up search
- Land search on Master Title
- Original copy of SPA

- When the duly stamped Deed of Receipt and Reassignment, and DOA
by way of Transfer, is received from the PS, and the PA is returned by
the High Court, the documents must also be forwarded for safekeeping
by the purchaser’s bank.
Upon issuance of strata title/IDT in any case where property is without title:
- DOA by way of Transfer will be replaced with Form 14A
- DOA by way of Security will be replaced with Form 16A
- The PS and PBS must prepare the instruments for execution and stamping
Strata Title
- Paves the way for subdivision of buildings having two or more storeys into parcels,
and permits the issue of a subsidiary title referred to as strata title as evidence of
ownership of such parcels.
- The Strata Titles Act:
- Its purpose is for the development of multi-storey buildings in response to
urbanization.
- To enable individual flats or office units to be sold as conveniently as lots on
land.
- Newfound concept of gated community (GACOS) where projects developed
with common fencing and guards plus other amenities for the privilege of
residents.
Concept:

- The idea of Strata Title is based on horizontal subdivision of a building, or of airspace,

instead of normal vertical subdivision of land
- The land and building(s) on it are divided into ‘parcels’ and ‘common property’.
- Each parcel is an individual apartment for which a separate strata title is issued to the
registered proprietor.
- Each parcel may include a parking lot or storeroom which not be located within the
same boundary as the parcel i.e. ‘accessory parcel’.
Terminology (Sec. 4):
- ‘Parcel’: An individual unit comprised in a sub-divided building, which is held under a
separate strata title
- ‘Accessory parcel’: Any parcel shown in a strata plan as an accessory parcel, which is
used or intended to be used in conjunction with a parcel (a parking bay may either be
an accessory parcel or common property depending on the strata plan and SPA)
- ‘Common property’: So much of the lot as is not comprised in any parcel (including
any accessory parcel)
- ‘Land parcel’: A unit which is comprised therein a subdivided land on which there is a
completed building of not more than 4 storey which is held under strata title.
- Requirement for ‘land parcel’ – there must be a building on the land of not
more than four storeys high. This is to cater to the Gated Community type of
development and ‘townhouses’.
Rights of proprietor in parcel and common property (Sec. 34):
- The parcel owner is entitled to the rights as provided by NLC to the registered land
owner.
- The rights of a user and other proprietors to common property is as if they are co-
proprietors.
Who should apply for strata title:
- Sec. 8(1): The proprietor of the land who has sold or agreed to sell any parcel in such
building (developer)
- Lee Wai Kin v Yulek S/B: The plaintiff purchased a flat in a block of buildings developed
by the defendants. He had paid the purchase price and went into occupation.
However, the strata title to the flat had not been issued to the plaintiff. The defendant
had been demanding various sums of money from the plaintiff for expenses to be
incurred in applying for the title. Held: In view of Sec. 8(1), it was incumbent upon the
defendant (as proprietor of land) to apply for the title to the flat on behalf of the
plaintiff.
When to apply:
- Sec. 8 (2):
- If the SPA was signed before completion of the building, an application must
be made six months after building is completed.
- If SPA was signed after completion of the building, an application must be
made six months after the first unit is sold.
- Sec. 8(6): The Director of Lands and Mines may extend the period once not exceeding
three months.
- Sec. 8(7): Consequence of not applying before prescribed date:
- Not making an application within the prescribed period is an offence
punishable with fine of between RM10,000 to RM100,000.
- For every day the offence continues, a fine of RM100-RM1000 is imposed for
each day.

- Syed Azman v Lian Seng (KL) Construction Co. S/B: The plaintiff had purchased the third
floor of a proposed five-storey building, which was completed in 1973 and the plaintiff
had paid the full purchase price. Until the date of the hearing, the strata title had not
yet been delivered to the plaintiff. The plaintiff claimed specific performance i.e.
immediate delivery of the strata title pursuant to the agreement. The defendant
argued, inter alia, that they were incapable of specifically performing the terms of the
agreement as the six-month period specified in Sec. 8(2) had expired and no extension
of such period had been made before its expiry. Held: The defendant is contractually
and statutorily bound to apply for a separate title for the property purchased by the
plaintiff. Upon payment of the fine stipulated under the Act, the defendant as the
proprietor, could therefore apply to the Director for subdivision of the building and
the Director could still deal with the application even after expiry of the six months
period. Thus, the court ordered the defendant to do the needful within one month of
the judgment.
Restrictions on dealing with accessory parcel:
- Sec. 69 - Where the approved strata plan shows that some portion of the development
(i.e. a carpark, storeroom, etc.) are to be taken to be ‘accessory parcel’, then neither
the developer nor the parcel owner may deal with such accessory parcel or any
interest therein separately from the parcel (i.e. the ‘parcel’ and ‘accessory parcel’
must be sold together)
- Doreen Tan Ying Ying v Chong Tet On: A developer is not permitted by law to sell the
parking lot separately from the apartment. The judge also relied on Sec. 69 where the
provision states that a parking bay as an accessory parcel could not be dealt with
independently of the apartment in question.
- John Dennis De Silva v Crescent Court Management: The parcel owner was refused
entry into the compound or the use of parking lot because he did not pay the
maintenance charge. The court decided in favour of the parcel owner since he is the
rightful owner of the lot, which could not be denied by others.
- Plaza Pekeliling Management Corp. v IGB Corp Bhd: Common property meant that
there was no title to it because if there was title, then it would not be common
property. In this case, AHU Rooms, toilets, risers, roof top and carparks had been
issued with strata titles and were therefore not considered ‘common property’.
Management Corporation:
- Sec. 39(1): All the parcel proprietors shall form a management corporation.
- Sec. 39(3): The management corporation may sue and be sued.
- Sec. 42(1): The management corporation shall become the proprietor of common
property and the custodian of IDT of the common property.
- Proviso to Sec. 42: The rights as owner of the land shall not be exercised unless
with the authority of unanimous resolution and no power to transfer the
common property which forms part of the building or of the land on which the
building stands.
- Sec. 43: Duties of management corporation:
- To manage and maintain the common property
- To insure the subdivided building against fire and other risks
- To effect other types of insurance
- To apply the insurance money received by it in respect of damage to the
subdivided building in rebuilding and reinstating the premise
- To pay insurance premiums
- To comply to the notice given by any competent authority for any complaints
made by any other parties
- To comply to any notices made to the respective proprietors
- To maintain strata roll for the subdivided building
- To pay rent of the lot
- To recover any sum expended by the mc in respect of that proprietor’s parcel
in complying with any notices or orders by authority
 - To purchase, hire or otherwise any movable property for the use by the parcel
proprietors in connection with their enjoyment of the common property
- To borrow money in order to perform its duties (if necessary)
- To secure the repayment of money borrowed by it
- To collect during the initial period by way of contributions from proprietors in
proportion to the share units of their respective parcels
- To do all things reasonably necessary for the performance of duties
Rights of the Parcel Purchasers:
- Secs. 35 & 36: Other than rights of a proprietor under the NLC, parcel proprietors have
the following rights:
- Right of support: A right to subjacent and lateral support by the common
property and by every other parcel capable of affording support
- Right of service: Rights to passage and provision of water, sewage, drainage,
gas, electricity, garbage, etc.
Responsibilities of the Parcel Purchasers:
- Ensure regular payment of the management fund.
- To attend the AGM
- To comply with any directive by the authority relating to his parcel.
Management Fund (Sec. 45)
- To meet administrative expenses incurred for the purpose of controlling, managing
and administering the common property.
- Amount of contribution by the parcel proprietors is determined at the AGM.
Joint Management Body (Strata Management Act)
- A managing agent incorporated as part of the maintenance agent duly recognised as
a body adopting the power of the Management Committee.
- It shall be established after convening of the first AGM of the JMB.
- Sec. 17(4): The body shall consist of the developer and the parcel proprietors.
- Sec. 18(1) & (2): It is the duty of the developer to convene the first AGM, failure which
will result in a fine of RM250,000 or three years imprisonment, or both.
- Sec. 22(2): The developer also has the duty of appointing the Management
Committee.
- Sec. 57(1): It is the duty of the developer to convene the first AGM to form the
Management Committee after the expiration of the initial period.
Caveat
- An entry made on the RDT to restrict all dealings on the land.
Purpose and aim:
- To restrain the registered proprietor from dealing with the land
- Sec. 322 provides that private caveat will prohibit the registration,
endorsement and entry on RDT.

- To protect the non-registered caveator from the time being until the dispute is
settled
- Chin Chen Hong: The caveat system is for the protection of alleged or proved
interests. But it does not itself make a claim or right either better or worse.
- Macon Works & Trading Sdn Bhd v Phang Hon Chin: The court held that the
whole system of caveat is founded on the principle that they exist for the
protection of alleged as proved interest.

- To freeze the situation by maintaining the status quo until the disposal of dispute
- Temenggung Securities Ltd v Registrar of Titles: The purpose of a caveat is to
preserve the status quo pending the taking timeous steps by the applicant to
enforce his claim to an interest in land by proceeding in the court.
- A caveat helps suspend the process of registration of any dealing in the land
until conflicting claims have been judicially settled.

- To give notice or warning on the title relating to the claim made by the caveator
- Butler v Fairclough: A caveat operates as notice to all the world that the
registered proprietor’s title is subject to the equitable interest alleged in the
caveat.

- To determine priorities between two conflicting parties

Private Caveat:
- A Registrar in performance of his duty in entering a private caveat need not look into
the validity of the claim.
- Ong Chat Pang v Valiappa Chettiar: So long as the formalities in preparing the caveat
form is complied with, the Registrar has no power to reject a caveat. Hence, the
Registrar was mistaken in law in rejecting the caveat lodged by the caveator.
- However, a Registrar may reject it if it is procedurally wrong:
- Ching Sin Poey v Quek Lian Meng – the Registrar may reject any application for
entry of caveat that does not comply with the provisions of NLC (procedure for
lodgement of caveat)
Sec. 323(1)(a): Any person with caveatable interest may apply for the lodgement of a private
caveat.
- Million Group Credit Sdn Bhd v Lee Shoo Khoon: It is absolutely essential for the
caveator to establish that his interest is related to the land he wishes to caveat.

- Caveatable interest may be established in certain circumstances:

- An option to purchase in an unconditional binding contract is a caveatable interest:
- Sing Lian Express Sdn Bhd v Soh Kim Tee: The respondent has a caveatable
interest when he expressed his willingness to purchase the land and paid the
deposit.
- However, in Valentine Electronics Sdn Bdn v Long Kim: The exercise of an
option not according to the prescribed terms but which in fact amounted to a
counter offer which the caveatee rejected, does not give rise to a caveatable
interest.
- Chong Siat Yong v Yee Mun Ying: The option contains a provision that it is
subject to the terms and conditions to be agreed upon. The option to purchase
did not give rise to a caveatable interest because the option is conditional upon
and subject to the prospective purchaser agreeing to the terms and conditions
of the SPA.

- The existence of a valid SPA confers caveatable interest:

- Macon Engineers Sdn Bhd v Goh Hooi Yin: So long as there is in existence a valid
SPA, the purchaser is entitled to enter a caveat to protect his right thereunder.
- Ayer Hitam Dredging Malaysia Berhad v YC Chin Enterprise Sdn Bhd: Until and
unless a purchaser has an enforceable contract for sale of land, he can lay no
claim to the title.
- New Selangor Plantation Sdn Bhd v Talam Management Services Sdn Bhd:
Where only the price at RM 35,000 per acre had been agreed upon, it was not
sufficient to establish a caveatable interest.
In applying for a private caveat, the caveator must provide:
- Form 19B
- Prescribed fee
- A statutory declaration verifying the grounds upon which he wishes to caveat the land
- A description or plan of the affected land
The effect of the caveat is that it will bind the whole or undivided share of the land.
Removal of caveat:
- Sec. 325 (by caveator through From 19G)
- Sec. 326 (by Registrar through Form 19H)
- Sec. 327 (by an order of the court)
Power of Attorney
An instrument or a document that provides for the appointment of the donee (recipient of
the power) as attorney (to act on behalf) of the donor (a giver of the power) who is to give
certain powers, generally/specifically, to the donee for a specific aim.
- The donor must have the mental capacity to understand the nature and effect of the
transaction with the assistance of any explanation given to him.

Power of attorney is governed by the Powers of Attorney Act 1949, which is inapplicable in
Sabah and Sarawak.
Persons who can register a power of attorney document:
- Either the donor or donee may register his/her power of attorney documents or by
any lawyer representing such documents. Such registration is made at the Power of
Attorney Registration Office, High Court of Malaya, Kuala Lumpur or at any
Registration Office of the High Court of Malaya in West Malaysia.

Types of power of attorney:

- Irrevocable power of attorney, given for valuable consideration
- Sec. 6(1)(a): Power of attorney shall not be revoked by the donor if such power,
given for valuable consideration, is expressed to be irrevocable in the instrument.
- Sec. 6(1)(b): Any act done by the donee, pursuant to his powers, shall be valid.
- Sec. 6(1)(c): The donee or the purchaser shall not be prejudicially affected by
notice of anything from the donor.

- Irrevocable power of attorney for a fixed time

- Sec. 7(1)(a): Power of attorney instrument creating power expressed to be
irrevocable for a fixed time shall not be revoked by the donor for and during that
fixed time.
- Sec. 7(1)(b): Any act done by the donee within that fixed time, pursuant of the
power, shall be valid.
- Sec. 7(1)(c): The donee or the purchaser shall not be prejudicially affected by
notice of anything from the donor.

Creation of power of attorney:

- Preparation of documents
- Two sets of power of attorney documents:
- One original copy of the power of attorney documents (for own safekeeping);
and
- A duplicate of the original copy of the power of attorney document (to be
filed and deposited in the court).
 - Sec. 4(2): Language used –
- A Power of Attorney document must either be in Bahasa Malaysia or English
for the purpose of registration.
- Translation must be done if the Power of Attorney document is in a language
other than Bahasa Malaysia or English. The translation must be –
- Certified by an interpreter attached to the court; or
- Translated by a qualified person accompanied with a Statutory
Declaration as to the accuracy of the translation by such person.

- Execution and authentication of documents

- The signature of the donor must be witnessed and authenticated by the following
persons:
- Sec. 3(1)(a): within Peninsular (West) Malaysia –
- Magistrate, Justice of Peace, Land Administrator, Notary Public,
Commissioner for Oaths, advocate and solicitor, or an officer of a
company incorporated under any written laws carrying on the business
of banking in West Malaysia.
- Authentication by the persons above must be in the form prescribed in
the Powers of Attorney Act 1949, being:
- Form I: Authentication form for individual donor
- Form II: Authentication form for company or corporation donor
- Sec. 3(1)(b): outside of Peninsular Malaysia –
- Notary Public, Commissioner for Oaths, Judge, Magistrate, British Consul
or Vice Consul, representative of Her Britanic Majesty, any Consular
Officer of Malaysia, the Malaysian Pilgrimage Commissioner (instrument
executed in the Kingdom of Saudi Arabia), advocate and solicitor of the
Supreme Court of the Republic, or an officer of a company carrying on
the business of banking in Singapore, and administered by any written
law of the Republic (instrument executed in the Republic of Singapore).
- However, there is no specific format to be followed as in the Powers of Attorney
Act 1949, but there must be some form of authentication by the persons above
to be enclosed in the Power of Attorney document.

- Stamping
- Power of Attorney document must be duly stamped at the Stamp Duty Office
before it can be registered at the High Court.

- Registration
- Both the original copy and the duplicate of the original copy of the Power of
Attorney document are to be brought to the Power of Attorney Registration
 Office, High Court of Malaya, Kuala Lumpur or at any Registration Office of the
High Court of Malaya in West Malaysia.
- A duplicate of the original copy of the Power of Attorney instrument is to be filed
and deposited in the court.
- Sec. 4(1)(a): The true copy (duplicate of the original copy) of the Power of
Attorney instrument will be duly compared and marked by the Senior
Assistant Registrar with the words “true copy”; or

- Sec. 4(1)(b): Where the original instrument is deposited in the registry of the
Supreme Court in Singapore, an office copy of such instrument, has been
deposited in the office of a Senior Assistant Registrar.

- Sec. 9: The document deposited shall be kept by every Senior Assistant

Registrar, who shall enter in a register, short particulars of each document
together with subsequent revocation or other determination. Additionally,
upon payment of prescribed fee, any person may inspect any document so
deposited and an office copy shall be delivered to him on request.

- Fee for registration of the Power of Attorney document:

Registration RM 25
Deposit RM 10
Fee per printed sheet prior to execution page RM 2

- The original copy of the Power of Attorney document is returned to the person
who sent it to be brought back.

Upon creation of a valid power of attorney, under land law, the donee is able to deal with the
properties of the donor subjected to his limitation of powers. In dealing with the donor’s
properties, registration of such dealings is subjected to the National Land Code 1965.
Registration of power of attorney for registration of real property dealings (NLC):
- Sec. 157A(3): The donee of a power of attorney shall have power to do all such acts or
things as may be necessary or required under the Act in relation to the application and
the proprietor shall be bound by all such acts or things done by donee in the same
manner as if it was done by the proprietor himself.

- Sec. 309(1): Any instrument presented for registration executed by donee, shall be
accompanied by (1) an office copy of the Power of Attorney document, or in the case
of exception, the original copy of such document; and (2) a duplicate copy of the
Power of Attorney document for retention by Registrar.
- Sec. 310(1): The duplicate copy deposited for Registrar’s retention shall be
compared with the office copy or the original copy by the Registrar. Consequently,
 in registering the instrument, the Registrar shall file the compared copy, note the
existence of the compared copy, and the reference under which it is filed, both
on the instrument and on the office copy or original copy of the Power of Attorney
document; and return the office copy or original document to the person or body
by whom it was sent.

- Sec. 309(2): Upon retention of the duplicate copy by Registrar and duly filed in
accordance with Sec. 310, subsequent dealings by the donee under the same power
need not be accompanied by any further copy of such document.

Revocation of power of attorney:

- Sec. 5: Power of attorney can be revoked by –
- Notice in writing by the donor or notice of renunciation by the donee, has been
deposited in every office in which the office copy or true copy has been so
deposited;
- Either the donor or donee has died;
- The donor has become of unsound mind or the donee has been adjudged to be of
unsound mind; or
- A receiving order has been made against the donor in bankruptcy.

- Procedure for revocation of power of attorney:

- Preparation of documents
- One original copy of a Revocation of Power of Attorney document (for
personal safekeeping);
- One duplicate copy of a Revocation of Power of Attorney document (to be
filed and deposited in court); and
- The original copy of the Power of Attorney duly registered and endorsed by
the High Court of Malaya.
- Power of attorney document must be duly stamped at the Stamp Office before it
can be registered at the High Court.
- Registration
- All three documents are to be brought to the Power of Attorney Registration
Office, High Court of Malaya, Kuala Lumpur or at any Registration Office of
the High Court of Malaya in West Malaysia.
- The duplicate copy is to be filed and deposited in the court.
- Fee for revocation of power of attorney:
Registration RM 10
Fee per printed sheet prior to execution page RM 2
- The original copies, especially of the Revocation of Power of Attorney
document, are to be brought back for personal safekeeping.