Dear dariofoo,

I would like to ask your opinion on an issue I am facing with a developer regarding State Authority consent to transfer title. The story goes like this:

I signed a SPA with a developer to buy a leasehold property in Sept 2010 and obtained a bank loan to finance 90% of the purchase price. Recently, the developer/bank's lawyer (same lawyer used) informed me that State Authority consent still has not been obtained and requested me to sign a Letter of Indemnity in order to give consent to the bank to release progress payments to the developer where the bank will lodge a private caveat pending consent to transfer and charge from Land Office, against the property. The Letter of Indemnity serves to indemnify the bank against any losses or damages from my instruction to the bank to release the payments. I am made to understand that State Authority consent is needed before the bank can release any payment to the developer.

It was also made known to me that the developer is facing problems in obtaining State Authority consent because of their refusal to build low cost houses in their development, which I believe is a policy requirement by the State. Looking at this aspect, I believe that this State Authority consent may not be obtained in the near future and could be a long running issue.

I haven't signed the Letter of Indemnity yet as I need a second opinion as I'm worried about the implications later. Viewing the situation too, I'm worried that when the house is completed (by January 2012 according to the developer) I still have no title to the house and cannot live there or sell it or transfer it to others.

I would greatly appreciate your views on the following questions:

1. Should I sign the Letter of Indemnity to the bank and what are the implications if I do so?
2. With the State Authority consent looking like a long running issue, I feel like cancelling the SPA with the developer as I believe that since it is the developer's responsibility to obtain State Authority consent (as contained in the SPA) their failure to do so would constitute a fundamental breach of the contract. Any way as a buyer, I feel that it is my right to obtain title to the property. Can I take steps to cancel the SPA and what are the implications of doing so?

Thanks very much for your precious views and advice on the issues which I am facing. I really appreciate it.

Yeah,......... Happy Birthday to Dario

Take your time, bro,... frankly, if people are not too interested in something like this, it becomes a boring subject then. I would think there are quite some abandoned projects in Malaysia, though.

Happy Birthday, bro.

happy birthday dariofoo!
long live the king.. err.. I meant LONG LIVE DARIOFOO!!

go easy on the

Hi everybody,

I need help on this. My friend told me my lawyer charged very expensive fee. Ask me to get second quotation which I'll definitely do. But kindly comment on the following. Loan amount RM394245.00 and purchase price RM469880.00. The stamp on transfer is usual?
pls advise and help me on this. I got a feeling this quotation is very wrong.
Thanks.


This post has been edited by oal_liang: Jan 17 2011, 10:57 AM

Thanks guys!

The balance deposit (7-8%) can even be given to the vendor upon signing of the SPA. Some vendors insist on it. No harm there as there would be a provision in the agreement whereby if consent cannot be obtained, the deposit will be refunded to the purchaser.

This post has been edited by dariofoo: Jan 17 2011, 11:05 AM

Hi dariofoo,

Is your big day. Happy Birthday!

Bro,

The legal fees are correct and proper.

The reason why the total sum of 21k may come as a shock to you is because it is for both your SPA and Loan Doc as well as for stamp duty on both - which comes to about 11k, if i'm not mistaken.

Where is this property located? The disbursement for registration of title, which is 2k, is quite expensive. Unless the property is from the likes of Jelebu, where they calculate according to the value of the property, and not a fixed rate.

Bankruptcy search of RM90 is also very excessive. It ought to be RM12/pax only.

Other than that, it seems alright.

No harm in getting a second opinion though

Thanks for your prompt reply. My property is actually located at Johor. The developer is actually agreed to give 3k discount on the S&P, so we thought their lawyer will charge higher. Any idea wat's the common fee for disbursement for reg title?
thanks a bunch!!

Is there an outstanding loan with the bank? Has an individual title been issued for the property?

Would be easier if there is no outstanding loan (in other words, the property is unencumbered) and if there's an individual title out.

You do not need to prepare an S&P. Both parties would need to execute a Memorandum of Transfer (From 14A).

A transfer by way of gift from your mother to you would be entitled for 50% off from stamp duty.

Quite straightforward, actually

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Added on January 17, 2011, 12:01 pmI'm not sure about Johor. You better ask the lawyer how they calculate the registration fees. You have the right to know. Good luck

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Added on January 17, 2011, 12:47 pmbaharinsav62:



1. With regard to the letter of indemnity, it is an internal requirement by the bank which you MUST execute. It is basically to secure the position of the bank in the occurrence of an unforseeable event, eg the developer becomes insolvent in the future. In such circumstances, you would then be unable to turn around and refuse to pay your loan on the ground that the project could not be completed due to the insolvency of the developer. You cannot then put the blame on the developer. As far as it may seem unfair to you, it is to protect the interest of the bank who is forking out the money to you in the first place.

2. Can you verify the facts which you had set out with regard to the alleged non-compliance by the developer and the problems which you say they are allegedly facing? Or are they just rumours?

Firstly, the property is yet to be completed. The developer has time until Sept 2012 (24 months - I assume that this is a landed property?) to complete the construction of the property.

Secondly, consent to transfer is contingent upon subdivision of the master title into individual titles. Even to apply for subdivision, it is not compulsory for the developer to do so right now at this moment. Most developments are fully completed before individual title is issued. Some even take years for it to be issued, and yet, people are living in it with no problems whatsoever.

Therefore, State Consent to transfer only happens AFTER subdivision of the master title to individual title.

You must also be advised that even without individual titles, you can still transfer your right over the property - via a deed of assignment. It has the same effect as a title. So there's really nothing to worry there as well.

In short, you cannot cancel the agreement as yet. I would suggest just waiting patiently and keep your fingers crossed that all will be ok. You can't do much now on your part.

And do sign the letter of indemnity. I don't think you can get your loan released otherwise.

This post has been edited by dariofoo: Jan 17 2011, 02:38 PM

Dear all the experts/Sifu/ Legal advisors... please help

Situation : Joint name to purchase apartment with ex-GF, now break up..
and now have to find best soultion..


Purchase price : RM200k
Property condition : Under construction
Bank Loan : Joint applicant (with ex-gf)
SPA : Joint applicant (with ex-gf)

now we have break up - so sad but no choice, I have to facing the FACT and be tough to bear the risk,,, haaiizzz..did not expect all this..

so the gal no longer paying the monthly interest/ installment... actually i would like to withdraw her name from the SPA and loan,
but after i consult law firm frens (not lawyer) .. if wanna withdraw name and will have to do like re-finance which cost me RM5k on legal fees and the bank will review my credit... so complicated and a bit costly RM5k..

1) anyway any other suggestions?
2) i heard got 1 so called "Novotion"..what is that? Can explain this if compared to item 3 below?
3) Perhaps, we can do PA (Power of Attorney) cost abt rm800-1000, then mean the gal will give me authoriy or assign her shares to me to fully incharged for this property. Then my questions is ... if we do so, how about next time she is oversea for working then i wanna resell the unit? then how ? she have to sign as well or i can sign alone..can this be include into the PA?

so i more prefer to item 3 which is more save & both of us agreed to sold it upon completion... i know fully trf name would be better so it more costly.. can do anythings to protect me cos i'm the one going to continue paying , afraid one day she will denied this..thus, i more prefer somethings black & white ..

any other suggestions?
I very appreciate for your profeesional input..thanks


Dear Dario, if i dont want to re-finance due to high expenses,

can i do somethings "black and white" agreement in law firm,

1) what is the agreement or clause need to be added, so that I can take over 50% shareholding of the property from the joint purchaser by making one off consideration of RM5k? can it be done via POA or any other form instead of SPA?

2)how to eliminate the risk that my ex-gf will claim to share the proceeds of the property in the future, without terminating the loan agreement within 2 yrs?

3)can the signing of all documents(relating to the transfer of the property shareholding, POA etc) be done within these 2 mths, without terminating the loan agreement and without require further signatures of my ex-gf in the future when you dispose of the property and obtain the proceeds from sale?

4)lastly, what is the simplest and most cost savings method? or can introduce some law firm to me? which is good & price reasonable, i located at KL Setapak.

Mnay thanks,

This post has been edited by cutealex: Jan 17 2011, 01:58 PM

Hi Legal Advisor / Prop Expert,

Need advice here.

Scenario:
Transfer property under my name to my brother
- leasehold 87 years left
- fully paid

May i know what is the procedures & how much it will cost?

Mind to quote?

I think it would be better to sit down with a lawyer who can explain in detail all the available options to you. There's only so much advice I can give on this thread,bro.

Sorry I don't dare to intro any law firms to anyone. If anything goes wrong, even if it unexpected, you're definitely going to come back here and hantam me kau kau

Ask some family and frens for recommendations ya.

PS: Did you ask the Bank as to what your options are? Better you go speak to them since the property is currently assigned to them. Do that before seeing a lawyer. Best advice for you.

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Added on January 17, 2011, 3:30 pmPlease read my reply to a question above with regard to the same issue.

This post has been edited by dariofoo: Jan 17 2011, 03:30 PM

i've just received a call from my S&P lawyer saying that land office of Selangor has increased the MOT charges as of January 2010 and I am required to pay an extra of RM600, and this money are suppose to be handed over to my loan lawyer as the loan lawyer is the one doing the presentation.
May I ask how true is this? A quick google doesn't comes out anything on this. Please advice.

This question is the same as I posted in this thread: http://forum.lowyat.net/index.php?showtopic=1719136&hl=

I recently found out that a property owned by a friend has not been transfered in his name for 22 years. The loan is still running and has been paid on time all the while but the transfer couldn't be done as the original S&P is missing one signature from the vendor. The vendor has since migrated wit no way of contacting them.↲So now the question is: what can be done to complete the transfer?

Can the renovation work done by Indonesian (got sign black and white with them) counted in the deductions of expenses for the gain tax? How about those receipts of buying material like cement, paint, wood, tiles and etc?

Thanks.

How much did they bill you in the first place?



This post has been edited by dariofoo: Jan 18 2011, 12:56 PM

All the above would come under renovation costs and can be deducted for the purposes of determining the nett gain for RPGT.

In addition, can I humbly suggest that you buy a receipt book (the one sold at bookshops for RM2-RM5), fill up the details yourself and ask them to sign at the bottom, with their particulars? It would be better that way instead of a mere blank paper.

Don't forget other receipts like for legal fees paid when purchasing (and subseuqently selling) the house. It would be wise to keep a proper record now itself

This is very very interesting.

Can you get some more details for me?

1. How did you know that the transfer cannot be done as "the original S&P is missing one signature from the vendor". Who informed you this? Is it the Bank?
2. I read your thread and apparently the lawyer has been disbarred. Did the Bar Council assign the file to another law firm? Where are all the documents?
3. Which Bank is this? Do they have any other documents in their file?

Normally, before releasing the loan, the bank would need to have a security over the property, like a charge [gadaian]. Now, a charge can only be created in favour of the bank granting the loan AFTER the property has been presented for registration in favour of the chargor (i.e the purchaser who is taking the loan from the bank - who becomes the chargee).

If the Memorandum of Transfer has not been presented for registration, the bank would not be able to register it's charge, and as such, without any security, the bank would never ever release the balance purchase price to the vendor.

Try to do a title search - see what comes up. A title search will reveal whether it has been presented for registration or otherwise.

Hopefully hopefully hopefully the MOT was presented for registration but it has not been perfected by the Land Office. In such case, the problem would be at the Land Offfice and not with the law firm (of course the law firm is to be blamed as well for not following up ).

If there is no record of presentation, it might lead to several problems:

1) Any claim for ownership of land is subject to a limitation period of 12 years, i.e 12 years from the date your cause of action arises. In this case, it would've lapsed as the property was purchased 22 years ago ;

2) If the vendor now refuses to execute a new MOT to effect the transfer, there is nothing you can do to force him to as limitation has already set in. The Court would not assist you. As such, you'll be stuck with nothing despite having paid the instalments for the past 22 years.

However, the above is highly unlikely, as there is no way the bank would release the money unless it's right was protected first.

Do a title search and follow up with the bank to see what's their position.

Come back here and update us. Pose more questions if necessary. Act fast!

Good luck