Searches

Prior to negotiating and drafting the actual sale and purchase agreement, it is essential that the vendor’s solicitor conduct the relevant searches. These searches are done to ensure that the property is free from encumbrances and to confirm the status of the vendor as to his position to sell the property.

Land title search:

The vendor’s solicitor should conduct a land title search to ascertain the following:

1. (a) The existing proprietor of the property;
2. (b) Whether the property is encumbered, i.e. whether there is any existing charge by whomsoever on the property;
3. (c) Whether there is any restriction of interest on the property;
4. (d) Whether there are any caveats entered on the property;
5. (e) Whether the property was gazetted for any land acquisition;
6. (f) The size and location of the property;
7. (g) Whether the property is freehold or leasehold;
8. (h) If the property is a leasehold property, to ascertain when is the expiry date of the lease;
9. (i) Identity of the master chargee of the property (if the individual issue document or title or strata title to the said property has yet to be issued);
10. (j) In cases involving estate property, the identity of the executor or the administrator of the property (if any).

Bankruptcy search:

Vendor (Individual)

Bankruptcy searches are to be conducted to ascertain whether the vendor is a bankrupt as the vendor would be unable to sell the property if he is bankrupt. This is because the official assignee steps into the vendor’s shoes as the proprietor of the property and all proprietary rights of the vendor will cease to have effect.

Vendor (Company)

Where the vendor is a company, a winding-up search must be done on the company. As in the case of an individual, if the company has been wound up, the liquidators are the ones empowered to sell the property.

It would also be prudent to conduct a search of the company with the Companies Commission of Malaysia to ascertain who are its directors and shareholders and its registered business address.

Bank statements:

In a circumstance where the property is still under bank financing, it is advisable to obtain the bank statement for the last two months from the vendor stating the indicative redemption amount owing to the bank. This is also to ascertain whether the redemption amount exceeds the purchase price of the property.

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