TYPES OF REAL

ESTATE
 Residential property
 People reside in or a place call home

 Divided into two

 Landed

 Non-landed

Landed property
 Property that is built on land
 Bungalow, single storey terrace, double storey
terrace
 Generally cost more than non-landed property
 Residential property
Non-landed property
Flat – multi-storey building which has many
residential units and provided with basic facilities
such as lifts and maintenance service
Apartment – flat with extra facilities like security
services
Condominium – upscale multi-storey flat with
security service, swimming pool, squash courts,
community halls and gymnasium
Townhouse – a house built above another house
and normally comes with some recreational
facilities
 Commercial property
 Shopping complexes, hotels, shop lots
and office lots for carrying out business
and trading activities
 Industrial property
 Manufacturing activities like factories,
warehouses, industrial parks and
estates
 Vacant land
 Undeveloped and empty
 Usually covered by bushes and small
jungle
 Agriculture land
 Used for farming, planting trees and
vegetables
 Owner is allowed to build one house
 Eg: oil palm plantation
Advantage of land as collateral
 Value of land is relatively stable compared to shares,
machinery for example

 Over time the value appreciates

 Depending on locality and market conditions, it can be

easily sold

 It is easy to identify the existence of the security

(asset)

 Registration of interest in the title can be easily done

Disadvantage of land as collateral
 During recession, it may be difficult to sell
 Valuation can be very subjective, leading to
difficulty in obtaining a true value of the property
(valuation report for sub-sale)
 Leasehold land amortises in value will decline in
remaining years of lease
 Leasehold renewal premium can be costly
 Documentation cost can be high
 Legal proceedings can be lengthy and costly
Type of land
 Freehold land
 Land held in perpetuity without any restriction
 Market value is more stable and high
 Preferred by banks
 Leasehold land
 The tenure to occupy the land not exceed 99
years
 Market value often lower than freehold land
depends on the remaining period of lease
 Less preferred by banks
 Malay Reservation land
 Only for the Malays
 Prohibits the sale of property to non-
Malays
 Less preferred by banks due to difficult
to resale
 Usually the loan amount extended is
rather low compared to freehold land
Features in land title

 GERAN = FREEHOLD
 HS (M) = Hakmilik sementara mukim
= Registered at Pejabat Tanah
Daerah
 HS (D) = Hakmilik sementara daerah
= Registered at Pejabat Tanah dan
Galian Negeri
 Syarat Nyata & Sekatan Kepentingan
 Must be complied with otherwise the charge is
not valid
Features in land title

Conditions of title (Syarat-Syarat Nyata)

Relates to category of land use as specified under

National Land Code 1965.

If does not comply, fine can be imposed and building can
be demolished

Can be converted to other land use. Eg: agriculture land

to residential status

Conversion is expensive and time consuming

Features in land title

Restrictions in interest (Sekatan Kepentingan)

Normally such restriction include the land cannot be

transferred or charged without the consent of Pejabat
Tanah or State Authority

Non-compliance would make the transfer or charge null

and void.

Usually, this condition must be first obtained before loan

can be disbursed.
THE END