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Procedure for application for developer’s consent (properties without title)

For properties without title that fall outside the jurisdiction of the Housing Development (Control and Licensing) Act  1966 (Malaysia)  i.e. non-residential properties, the vendor’s solicitor must request from the developer/proprietor their consent to sell and assign the said property to the purchaser.

It should be noted that prior to 2007, this procedure was required even for properties that were within the jurisdiction of the Housing Development (Control and Licensing) Act  1966 (Malaysia) . However following an amendment to the Act in 2007 namely section 22C and 22D, such a procedure is no longer required. All that is needed now is a developer’s confirmation (not consent) for the assignment or sale of the property to the purchaser. This is merely a formality for which the developer may charge a fee not more than RM50 (as an administration fee) for each confirmation.

It is important for the vendor’s solicitor’s to write to the developer as soon as possible to obtain the Developer’s confirmation or consent (for properties not within the Housing Development (Control and Licensing) Act  1966 (Malaysia) ) as only upon receipt of this by the purchaser’s solicitor would the completion date for the transaction begin to be computed.

If the developer confirms that the master title is subject to restriction and state authority consent is required, the vendor’s solicitor should apply for the state authority consent as discussed below.

Upon receipt of the consent, the vendor’s solicitor must quickly forward the same to the purchaser’s solicitor.

The vendor’s solicitor must also ensure that the vendor complies with the terms and conditions of the developer’s consent letter.

Usually the vendor is required to pay the developer some administrative fees for the next six (6) months and also to settle whatsoever outstanding fees are still owing to the developer/proprietor. The purchaser is usually also required to give some of his own details and execute a data and indemnity form to be returned to the developer. Note that every developer will have their own standard data and indemnity form.

This letter is also important as the developer will confirm that the vendor is the beneficial owner, whether the property is assigned to any financial institution and the details of the master chargee (if any).

In the meantime, the vendor’s solicitor should be waiting for the purchaser’s financier’s solicitor’s letter requesting to procure the redemption sum information and undertakings from the vendor or vendor’s solicitor in order to release the redemption sum and the balance loan sum thereafter. (An example would be a letter of undertaking from the vendor to refund to the purchaser’s financier monies released in the event the transfer cannot be effected.) Upon receipt of this letter, the vendor’s solicitor shall proceed to comply with its requirements.

At this juncture, the vendor’s solicitor should be receiving the differential sum (i.e. the difference between the purchase price and the loan sum [if any]) as a stakeholder from the purchaser’s solicitor.

Upon receipt of this sum, the vendor’s solicitor shall give written confirmation to the purchaser’s financier’s solicitor that the differential sum has been fully paid; otherwise the redemption sum shall not be released to the vendor’s financier.

Upon receipt of the purchaser’s financier’s solicitor’s letter confirming the purchaser has secured a loan and identifying the financier, the vendor’s solicitor should immediately write to the vendor’s financier for the redemption sum information and undertaking in favour of the purchaser’s financier.

Letter requesting developer consent

Letter to purchaser's solicitor enclosing a copy of the consent

Letter to purchaser's solicitor confirming completion date

This preview is an excerpt from the following publication. this publication for access to all the commentary and precedents.

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Sale of Real Property - Step by Step Guide & Precedents

by By Lawyers For Lawyers author - Jayadeep Hari & Jamil

Overview

This step by step guide provides a comprehensive directory and convenient precedents which will help ensure a smooth and easy property sale.

This publication will guide you from the point of negotiation straight through to transfer of title. The guide includes practical commentary ensuring that no issues are overlooked together with a broad range of precedents.

All matters are covered including;

  • Land Title Searches
  • Bankruptcy Searches
  • Essential preliminaries for property with OR without title
  • Caveats
  • Strata Title Act 1985
  • Finalisation

This guide is written by lawyers for lawyers and consequently it is practical, efficient and easy to use.

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