Have you owned the house for more than 5 years?

Govt loan, I see. That makes things even more complicated, i.e to look for the file at the Finance Ministry would be a mess.

Do a title search first and then come back here and update us. I'll advise you more from there.

Ok?

Coming soon. Doing more research first before firing my salvo. My opinion will be very much different from dan's, I can tell you that. Nice of him to bring that section to our attention though. Hat's off to him for that.

What I stated was a general principle in relation of that case which I will go into detail more later.

I want to address the factual situation which you stated. Now, in a purchase from a developer, there might not be an individual title issued by the time the keys are handed to you.

Your right as the lawful and beneficial owner is recognised in the S&P AND the Deed of Assignment with your financier which has been endorsed by the developer as well.

When the developer subsequently applies for subdivision and same has been approved, the developer will inform all the purchasers (as well as the purchaser's financiers) that the MOT is ready for execution.

If for example at this stage the purchaser executes the MOT but the developer refuses to do so, your cause of action will accrue (in simpler terms, arise or begin). So your limitation period starts to run from that date of refusal (probably after a letter of demand is sent to the developer and they refuse to comply).

In reality though, there is no reason for the developer to refuse as they want to wash their hands off the property (read: no need to pay quit rent) soonest possible.

With regard to your legal remedy in the event the developer refuses to do so, I think we dealt with this matter in our previous discussion in the earlier pages. Remember?

Hope the above clarifies things.



This post has been edited by dariofoo: Jan 19 2011, 11:36 AM

The stamp duty upon the MOT must be deposited with the lawyer upon signing the S&P (and MOT, assuming that individual title is already out at the date of the S&P).

I doubt if you can ask for extension. If you execute it and it is dated as well as submitted for adjudication, you have to make the payment to LHDN within 30 days from the date of Notice issued by LHDN of the sum payable.

If you pay late, there will be a penalty.

Your MOT would also have to be presented for registration at the land office. That too has a timeline. If late, have to pay penalty again.

I doubt if the developer will allow you to delay payment.

They will question you why you committed to purchase the property without having the reserves to pay for stamp duty on the MOT?

dan2020:


Dan,

Thanks for your input in this matter.

You mentioned that Section 26, Limitation Act (LA) would apply in this matter. As an analogy, you gave a situation where the developer would be bound by its acknowledgment or acceptance from the purchaser (whatever the payments may be). From what I gather, you are suggesting that the time would start to run from the date of the developer admit in a letter or accept payment of the property pursuant to the S&P to indicate that the property is yours

In my humble opinion, Section 26 LA does not apply in this case. Section 26 can be dissected into two parts:

1) Where the action is to recover land; OR
2) Where the action is to enforce a mortgage or charge in respect of land or personal property.

Section 26 then branches into two subsections, which I will deal with separately:
a) Where the person in possession of the land or personal property acknowledges the title of the person to whom the right of action has accrued

This subsection deals with an action to recover land. Firstly, such land must be in possession of another person, and not the purchaser. Note the portion which I had emphasised in bold.

Secondly, proof of acknowledgement by the person of whom the land is in possession of title of the person to whom the right of action has accrued. This means that the person in possession of the property must acknowledge that the title of the person who is now suing him.

The time only starts to run from the time of such acknowledgment, and not before that. Acknowledgement is not limited to admission. Mere notice is good enough. For example a letter of demand sent to the occupier in possession of the premises with a copy of the individual title in favour of the claimant enclosed. Time to recover the land from the occupier starts to run from the date the letter was sent to the occupier, and not before.

The occupier cannot say that he has been staying in the land for more than 12 years and thus, everyone's claim against him is time-barred. In my opinion, this subsection deals with squatters, occupiers, tenancies-holding-over, etc.

b) in the case of any such action by a mortgage or chargee the person in possession as aforesaid or the person liable for the debt secured by the mortgage or charge makes any payment in respect thereof, whether principal or interest,

This is where a creditor/mortgagee/chargee seeks to claim for a sum due and owing under a contract with a debtor/mortgagor/chargor.

According to this subsection, time starts to run from the date of the last payment by the debtor, and not from the actual date of default.

For example, the borrower defaulted in his monthly payment and a letter of demand was sent by the borrower on 01.01.2002. However, the borrower kept making staggered payments with the last payment made on 01.01.2004.

The bank filed a civil suit to recover the balance on 01.01.2009 - which was 7 years after the letter of demand which was sent in 2002.

NOTE: For contract/tort cases, limitation is 6 years.

The borrower objected on the ground that it was filed after the limitation period.

The bank argued that time ought to run from 01.01.2004, and not 01.01.2002. If from 2004, it would be filed on time, i.e. 5 years.

According to Sec 26(1)(b), time would start to run from 01.01.2004, and thus, the bank can still proceed with it's claim.

A decided court case on this point (not a long case, and quite easy to understand, to get a better idea):

 Perwira_Affin_Bank_v_Sykt_Lew_Kee_Sdn_Bhd.pdf ( 35.71k ) Number of downloads: 28


Therefore, I am of the opinion that Sec 26 cannot be applicable in this case. The first limb is not relevant as it is the person in possession who must acknowledge the claimant's title. In our current case, the purchaser has been staying on the property since he purchased it 22 years ago.

The second limb is also not relevant as the claimant is not the bank or creditor. He was the purchaser in the S&P executed 22 years ago.

My opinion is that Section 9(1), LA would apply:

9. Limitation of actions to recover land.

(1) No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him, or if it first accrued to some person through whom he claims, to that person.

Twelve years from the date the right of action accrued to him. With regard to the 22 year old S&P case, it would be from the date the MOT was executed. If it was presented for registration within 12 years, then all is ok. If it was done after that, the purchaser himself is to be blamed for the delay and any action in Court would be time-barred.

With regard to developer-purchaser relationship, I had given the explanation in my reply to Hansel above.

WLB



OA search - RM12/pax. Title search ought to be less than RM100. Find out what is the exact amount. They can't overcharge you.

The rest seems alright. RM300 may seem like a lot but bear in mind they did not bill you separately for papers, photostat, fax, phone, etc. The RM50 for misc is also not quoted. So at the end of the day, it's alright

6 months

The good thing is that the purchase price is fixed. So if the property appreciates during that period, the 'take their time' strategy (assuming there is one) would backfire on the vendor, right? You'll benefit from it.

Even though it is rooted in contract (which would mean 6 years) I would say 12 years as it is related to land.

Same methods.

But here's the catch - did the parties execute a new agreement or an addendum to vary the clauses of the initial agreement? Variation whereby the developer consents to the purchasers to complete the property and apply for the CF with their own money, etc.

That ought to have been done, right? But then again, I'm concerned about the legality of such variations, as the law is strict about Schedule G agreements, in the sense that no different version of the Schedule G agreement is allowed in relation to sale and purchase of housing developments. If it is illegal, it doesn't matter whether both parties consent and freely agree to vary it.

Perhaps you can get some details? How did parties go around the terms of the original S&P to resolve the issue?

Then make it 9 months max la.

Change lawyer la then

Someone who can drive a hard bargain for you and not just kowtow to the vendor's lawyers and collect buta fees

...or buy another unit?

Nothing great la bro. It takes two to tango anyway.



So that letter can be used against the developer later on if they refuse to sign the MOT. I don't think they'll dare to pull off that stunt anyway.

PS: Where's Dan2020?

Hansel, think about this - why would the developer want to hold on to the titles when firstly, it's no longer a master title in their favour and secondly, the longer they hold on to it, the more quit rent they would have to pay for ALL the individual titles.

Quit rent for a whole development project is no joke. Runs into thousands.

Would be a waste of money right? If the developer wanted to play hard ball they would've just taken the easy way out like many others - cabut!

15 months is too long,brother!

Thanks for the input.

Bro, clause (1) is redundant is there is no need to ask for an undertaking by the vendor. If you don't mind me asking respectfully, do you understand the nature of an undertaking? It is a well-abused term which even lawyers use for no basis whatsoever. You'd be surprised!

For things like consent, it is the vendor's DUTY to do so within the stipulated period. If he fails and an extension is needed, the completion date would be automatically extended, to the benefit of the purchaser. The vendor doesn't need to UNDERTAKE to do it. He HAS to do it. It's compulsory.

Clause (2) must be there in every agreement. If consent is not granted the agreement is of no further effect and parties are restored to their previous position. Status quo, essentially.

Clause (3) would be of no effect as the vendor has a total of (for example) 6 months to obtain consent. It doesn't matter even if he undertakes to apply within 14 days.

Clause (4) - it is still the vendor. No changes there. Standard procedure.

Now, in an S&P, the underlying assumption and general rule is that the vendor would want to dispose off his property soonest possible and thus, you would notice that any delay by the vendor would result only in an extension of time to the purchaser, but any delay by the purchaser would entail a late penalty interest.

Some people might suggest that the vendor would want to 'delay' things and 'take his own sweet time to obtain state consent', but such arguments does not really hold water in reality because:

1) The purchase price is fixed. If during the period in which consent is pending, the market value increases, the vendor loses out. This is the BIGGEST risk that the vendor faces ;
2) The vendor would still have to make his monthly instalment payments to his financier while consent is pending ;
3) The reality of inflation and the depreciation in money - the longer it takes for the transaction to complete, the longer it would take for the vendor to obtain the balance purchase price to commit himself to a new purchase. There is a possibility that his intended new purchase would've increased in price as well during that period !

Hope the above clarifies things. What do you think?

Am not too sure of the kindness of my soul but I don't mind helping out a bit

Yes it is standard for you to give him a copy of the S&P so that his lawyer can peruse it to first establish that you are indeed the proprietor, but most importantly, it is to get more details on the property.

You can appoint your own lawyer or 'tumpang' the purchaser's lawyer.

The pros and cons of the above has been discussed at length in the earlier posts of this thread. Feel free to browse.

What do you mean by direct buyer? Cash buyer?

Good. Life is all about learning


Negotiated. Depends which side of the fence you're on. Vendor will of course insist on a longer date, perhaps 9-15 months, just to play safe. Purchaser will want to move fast, and would insist on 6 months min, 9 months max.

An undertaking is always contingent or subject to the occurence of a pre-condition.

For example, an undertaking in writing from the vendor to refund the balance purchase price to the purchaser's financiers in the event the charge in favour of the purchaser's financiers cannot be registered for any reason whatsoever.

Another example, the purchaser's solicitors undertake to forward the original title and any other documents to the purchaser's financier's solicitors within 10 business days from the date of receipt of same from the vendor.

The purchaser's solicitors can only act upon receipt of same from the vendor. It is contingent upon the vendor's act of handing over the documents to the purcheser's solicitors.

The reason why I say that even lawyers misuse the term is because they sometimes undertake for matters which ought to be undertaken by their client - either the vendor or the purchaser, as the case may be.

A solicitor cannot and ought not undertake for a matter which is ought of their control. That undertaking can be held against them and disciplinary action can be taken for making an undertaking which was subsequently failed to be acted upon.

For example, the vendor's solicitors undertake to hand over the original documents to the purchaser's financier's solicitors upon receipt of the purchaser's financier's letter of undertaking to release the loan sum to the vendor.

A mere undertaking like that is dangerous. A phrase somewhat like these words ought to be inserted at the end, "provided always or subject always that the vendor has given the original documents to the vendor's solicitors".

So the solicitors won't be caught if the vendor somehow did not hand over the documents to them.

You think he will dig own grave,bro?

You're right. Attend at the embassy/consulate and execute it before the officer who is a qualified Notary Public

I'm asking about the one you're currently selling. Anyway, if it's > 5 years, you're automatically exempted. You still need to fill up CKHT 1A and CKHT3 as well. CKHT3 will indicate
that your declaration that you've owned it for > 5 years, so the purchaser's solicitors will not retain 2% from the deposit.

As far as I know, it can't. But you can try to include it. At the end of the day LHDN will decide whether to allow it.

4 copies - 1 original and 3 copies. Original is for purchaser, one copy each for vendor, purchaser's financier and purchaser's solicitor file copy.