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In our previous insight, we shared an essential guide for first-time home buyers in Malaysia, which provides in-depth information on the process of purchasing a subsale property in the country. One notable detail you may have noticed in the property purchasing process is the involvement of conveyancing lawyers, especially in the Sales and Purchase Agreement (SPA), title and land searches, Memorandum of Transfer (MOT), as well as loan documentation (if any).
While it’s possible for you to “DIY” the process or rely solely on an agent, it’s strongly recommended to hire a conveyancing lawyer when purchasing a property in Malaysia. In fact, some of the procedures, such as property transfers, expressly require a legal professional to be present.
It’s not an understatement to say that purchasing a property could be one of the biggest financial decisions in your life. Hence, it’s best to lawyer up as you embark on your home-owning journey, and accordingly, we’ve compiled several reasons below as to why.
What exactly is a conveyancing lawyer?
Before we start, it’s best to clear up what exactly is “conveyancing” and the role that conveyancing lawyers take in the purchase of property. In simple terms, conveyancing is the branch of legal practice that deals with the process of transferring a property title or real estate asset from one individual to another.
Moreover, it’s also related to the granting or creation of encumbrances over a land title, such as a charge or mortgage. Hence, a conveyancing lawyer is a legal professional who, among other things, assists a party in a property transaction between a buyer and a seller by complying with the land law procedures.
With that in mind, here are the reasons why you need a conveyancing lawyer when purchasing a property:
Conveyancing is extremely complex and requires a level of legal expertise
One misconception many Malaysian first-time home buyers have is that the whole process is quite simple. Surely, all you have to do is pick a property, pay the deposit, secure the loan and pay the balance purchase price, right?
Well, that’s quite an oversimplification of the process, which actually has many nuances and can quickly become very tedious. Moreover, conveyancing requires a certain level of legal expertise due to its complexity, compared to, say, purchasing a car.
For one, buying a home is a significantly longer process, with considerably more steps and documents required. Hence, a conveyancing lawyer becomes necessary when purchasing a property, as they are trained to properly handle and guide the client through whatever legal difficulties that may arise on a case-by-case basis.
A lawyer protects the client’s interests from any form of fraud, misrepresentation and forgery
Besides that, having a conveyancing lawyer is strongly recommended as they act in an advisory capacity aimed at safeguarding the client’s interests from any form of fraud, misrepresentation or forgery. Specifically, the lawyer assists the client in navigating the complexity of the process by distilling the SPA and supporting documents down to the following:
- Terms and conditions
- Financial implications
- Irregularities and any other potential legal disputes
Additionally, a lawyer is needed to ensure that the conveyancing process proceeds smoothly. This is particularly evident in subsale cases where the lawyer would act as the intermediary and assist the client in the negotiation process by communicating the needs and interests of the client to the other party.
Lawyers are required to perform the SPA’s preliminary verification and prepare the loan documentation
Besides that, lawyers are also required to perform some preliminary verification before the execution of the SPA, including Land Searches and Bankruptcy Searches. Should there be any encumbrances such as charges, liens and restrictions in interest, the lawyers will inform the client.
Furthermore, a lawyer is needed to prepare the loan documentation required by the banks. Specifically, loan offers, facilities agreements and other supplementary documents need to be prepared by lawyers because the bank will not allow agents access to the bank documents.
A lawyer is needed to attest to all the instruments of transfer
Another reason why you should lawyer up when purchasing a property is that a legal professional is needed to witness and attest to all the instruments of transfer, including the MOT. This is governed under Section 211 of the National Land Code 1965, which only allows for Advocates and Solicitors to attest to signatories.
Purchases from developers require lawyers to execute the SPA and the Annexures, subject to the lawyer’s undertaking
For this end, the lawyer will ensure that:
- The developer has the necessary licenses and approvals
- Ensure that the Purchaser is aware of the schedule of payments
- Conduct the land, bankruptcy and winding up searches
Additionally, the lawyer is also responsible for advising the bank through a Letter of Advice to release the loan.
A lawyer is necessary to ensure both parties comply with the terms and conditions of the SPA
Lastly, a conveyancing lawyer will ensure that both parties comply with the terms and conditions of the SPA by:
- Ensure the parties provide the other with all the required documents and info, including Identification Card, Quit Rent and Assessment (duly paid), and the original title
- Act in some instances as the stakeholder for the payment of the purchase price
Moreover, the lawyer shall also be responsible for the completion of the instruments of transfer, including the Real Property Gain Tax (RPGT) Forms and MOT. Not only that, the lawyer shall also assist the client with impending issues, such as:
- The RPGT
- The application for consent to transfer
- The application for consent to charge
- In the event of encumbrances like a bank charge, the lawyer must help redeem the property and request a redemption statement from the bank
Also, lawyers are responsible for presenting the instruments of transfer and supporting documents to the Land Office. Afterwards, they will register the title under the Purchaser’s name once the transaction is complete.
There you have it, reasons why you should have a legal professional on your side when purchasing a property in Malaysia. We hope this information will help you in achieving your dream of owning a house, and if you want to delve even deeper into conveyancing, check out our other insights on the subject here.
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About us
Ahmad Danial Iswatt & Luqman is an esteemed law firm that delivers best-in-class legal solutions to individuals, businesses and legal entities in Malaysia and beyond. We offer ease of mind to our wide range of clients by dismantling complex legal challenges with novel solutions through exceptional legal advisory and representation.
Our distinguished partners of diverse backgrounds and expertise have achieved significantly favourable results in all levels of courts in Malaysia, from high-profile civil and criminal litigation proceedings to complex cases in which the outcomes have become binding precedents for the laws of the country. Backed by a growing team of exceptional lawyers and capable support staff, we aspire to be at the forefront of the legal sphere to satisfy our clients’ dynamic demands and ever-increasing complexity.
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