Property with title

Preliminaries

1. (a) The following is a list of steps that a purchaser’s solicitor would follow:
   1. (i) Collect details of the property and details of the vendor and purchaser (i.e. identity card, copy of the title, copy of the present sale and purchase agreement
   2. (ii) Obtain the information on the previous chargee (i.e. the present vendor’s financier)
   3. (iii) Conduct a land search on the property and ascertain the following:
      1. A. Who is the proprietor of the property;
      2. B. The details of the property to determine if it is encumbered and to whom;
      3. C. Whether the property is a leasehold or freehold property;
      4. D. Whether there is any restriction in interest on the property; and
      5. E. Whether there is any private caveat lodged on the same
   4. (iv) Conduct a bankruptcy search on the vendor and if it is a company, to do a company search and a winding up search on the company.
2. (b) Upon obtaining the relevant searches and confirmations, proceed to prepare a draft sale and purchase agreement.
3. (c) Once the draft sale and purchase agreement has been completed, the purchaser’s solicitor would forward a copy to the vendor’s solicitor for their perusal and amendment (if any).
4. (d) Upon completion of the negotiation on the terms and conditions of the draft sale and purchase agreement with the vendor’s solicitor, the purchaser’s solicitor would then prepare the following documents:
   1. (i) the memorandum of transfer (Form 14A)
   2. (ii) the CKHT 2A form - In order to prepare and file this form, the purchaser’s solicitor will require the income tax number and place of submission of the income tax file, of the vendor
   3. (iii) five copies of PDS 15 form which is the form used by the stamp department to assess the value of the stamp duty payable on the memorandum of transfer (Form 14A)
   4. (iv) two copies of the entry of private caveat form (Form 19B National Land Code) together with the statutory declaration by the caveator, and two copies of the withdrawal of caveat form (Form 19G National Land Code)
   5. (v) the application for the state authority consent form together with its statutory declaration (if the property is with restriction in interest). Each state has its own type of forms.
   6. (vi) the bill for legal fees and disbursement incurred; and
   7. (vii) a statutory declaration for the purchaser to sign stating that he is not a bankrupt or in the case of the company, the relevant directors statutory declaration stating that they are not bankrupt and the company is not under any winding up proceedings

Procedure for the execution of documents

1. (a) Once the preparation of the documents above has been completed, the purchaser’s solicitor will arrange for the documents to be executed by the purchaser. The purchaser will then pay the legal fees, the disbursements, and the deposit sum in favour of the vendor or the vendor’s solicitor, pursuant to the terms and conditions of the sale and purchase agreement.
2. (b) Upon receipt of the deposit, the legal fees and disbursements, the purchaser’s solicitor will then forward the sale and purchase agreement duly executed and attested, the PDS 15 form, the relevant part of the state authority form (if any) and the deposit sum to the vendor or the vendor’s solicitor for execution and return.
3. (c) The purchaser’s solicitor should also request a certified copy of the current quit rent, assessment receipt of the property concerned and the vendor’s identity card as these are required by the land office for the registration of the memorandum of transfer (Form 14A).
4. (d) Once the duly attested sale and purchase agreement have been received back from the vendor or vendor’s solicitor, the purchaser’s solicitor should then proceed to stamp the agreement at RM10 each.
5. (e) When the stamping of the agreement has been done, the purchaser’s solicitor can then forward a duplicate stamped copy to the vendor’s solicitor for the filing of real property gains tax returns, and the original stamped copy to the purchaser’s financier’s solicitor, and a duplicate copy to the purchaser for safekeeping. If there is no financier then the original would be sent to the purchaser.
6. (f) The purchaser’s solicitor would then submit the CKHT 2A Form to the relevant tax department on behalf of the purchaser. This should be sent within two months from the date of the sale and purchase agreement, failing which a penalty of 10% of the tax chargeable will be imposed on the purchaser for late submission of the same.
7. (g) The purchaser’s solicitor would then proceed with the next step only upon receipt of the original state authority consent from the vendor’s solicitor (if required) whereby upon receipt of the same, the calculation for the completion date of the sale and purchase transaction should start. If there is no state authority consent required, the completion date shall run from the date of the agreement.
8. (h) Once the stamped sale and purchase agreement and state authority consent (if required) have been received, the purchaser’s solicitor would then proceed to date and submit the memorandum of transfer (Form14A) together with the PDS 15 Form at the stamp office for them to adjudicate the stamp value of the memorandum of transfer.
9. (i) It should be noted that the memorandum of transfer has to be registered at the land office in favour of purchaser within three months from the date of the memorandum of transfer, failing which a penalty at a rate of double registration fees will be imposed for each three months of delay.
10. (j) It should also be borne in mind that the adjudicated stamp duty (Notis Taksiran) from the stamp office is usually obtained after one to one and a half months from the day the purchaser’s solicitor submits it for adjudication.
11. (k) In the meantime, the purchaser’s solicitor will have to wait for the purchaser’s financier’s solicitor’s letter for various confirmations and undertakings in order for him to proceed with the transaction. This letter would usually be received by the purchaser’s solicitor within one month, failing which it may be difficult for the parties to comply with all the requirements to complete the sale and purchase transaction within the usual three months completion period.
12. (l) Upon receipt of the purchaser’s financier’s solicitor’s letter, the vendor and purchaser must quickly comply with the request for the confirmation and undertakings from the same in order for the purchaser’s financier’s solicitor to proceed to advise the financier for the release of the redemption sum and/or the balance loan sum thereafter.
13. (m) If the purchaser’s financier’s solicitor has only directed his letter to the purchaser’s solicitor, it is the obligation of the purchaser’s solicitor to immediately write to the vendor’s solicitor to obtain the redemption statement, and undertaking in favour of the purchaser’s financier, or inform the purchaser’s financier’s solicitors to obtain the same directly from the vendor’s solicitor.

Procedure upon receipt of notice of stamp duty

1. (a) Upon receipt of the valuation of the stamp duty from the stamp office (Notis Taksiran), the purchaser’s solicitor should inform the purchaser of the stamp duty to be paid and obtain the amount payable immediately so that the memorandum of transfer can be stamped.
2. (b) Then the purchaser’s solicitor should collect the differential sum (the difference between the purchase price and the loan sum (if any)) from the purchaser and forward the same to the vendor’ solicitor.
3. (c)The purchaser’s solicitor must also insist on a written confirmation from the vendor’s solicitor that the differential sum has been fully paid and forward the written confirmation to the purchaser’s financier.
4. (d) Once the redemption sum has been released by the purchaser’s financier to the vendor’s financier, the purchaser’s solicitor shall then forward to the purchaser’s financier’s solicitor the following:
   1. (i) the duly executed and stamped memorandum of transfer;
   2. (ii) two copies of the withdrawal of private caveat form (Form 9G) with the statutory declaration duly affirmed;
   3. (iii) the current quit rent and assessment receipts together with the relevant registration fees with any late registration penalty charges (if any).
5. (e) The purchaser’s solicitor shall do the necessary on his part to facilitate the release of the balance loan sum.
6. (f) The balance loan sum shall then be released to the vendor’s solicitor or in some cases directly to the vendor.
7. (g) Upon receipt of the balance loan sum by the vendor’s solicitor, and the purchaser paying whatever pro-rated outgoings are calculated as of the date of receipt of monies, or late payment interest (if any), the vendor shall deliver vacant possession of the property to the purchaser, usually by handing over the keys of the property to the purchaser’s solicitor or the purchaser.
8. (h) It is prudent for the purchaser to inspect the condition of the property before the vendor’s solicitor releases the balance loan sum to the vendor, just in case there is any change to the property’s condition at the date of delivery of vacant possession.
9. (i) Lastly, the purchaser’s solicitor has to keep the matter in abeyance until the copy of the title with the purchaser’s name endorsed thereon is received from the purchaser’s financier’s solicitor. A copy of this is then forwarded to the purchaser for his records.

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