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

thank dario...i want meet lawyer today n ask him what u said above..

thank u very much

Dario,

Need your help... the case like this.. before i purchase the unit (apartment) ,owner is Bumi, and both agents & owner claim this is Non-Bumi lot..so, we proceed to sign SPA with the terms, in the event that consent cannot obtain to trf to purchaser, vendor have to refund the deposit within 14 days.

So today for double confirm, so i called up Developer, the answer that i heard really shocked me off...

The gal said developer actually before this, the whole aprtaments have NO specific whether this is BUMI or Non-Bumi lot…and didn’t not set up for the BUMI quotation. Now she claim the Developer have No Objection if we can obtain the Consent from Land office, mean the Final decision is made by LAND OFFICE.

The gal said the Land Office will based on the whether the Vendor is BUMI or not, but not the unit is Bumi lot or not, then I ask why last time owner called in here, you all (Developer) confirmed is Non-Bumi lot… the admin gal said this might be owner misunderstand…got such things????!!!!

i know i get get back my SPA deposit, but what i unhappy is.. if the consent cannot be obtained, then all my efforts are wasted and somemore have to pay the Bank Loans penalty (cancellation) + Bank loan agreement fees...

Actually can we seek for Land office appeal ? and how is your opinion on this?

Many thanks... Can reply in PM ? thanks

This post has been edited by cutealex: Jan 19 2011, 06:38 PM

Dario,

Have a question that would greatly appreciate your answer. For leasehold property, what should be a fair duration(consent period) for vendors solicitor to seek consent from state authority? My lawyer has it stated as a year in the snp, isn't it a tad bit too long? Property is currently tenanted on a month to month basis, what if vendor/solicitor decided to 'take their time' in seeking consent?

Bro, based on the paragraph in Bold above, what is how long is the Limitation Period in this case ?

Yes, I recalled our earlier discussion - thank you. We talked about the methods which we could use to compel the Developer to put their signatures onto the MOT.

What about if the situation is whereby the Developer defiantly refuses to sign the MOT for properties which have been officially surrendered to purchasers because the props could not be completed by the Developer, and the purchasers completed the props till CF with THEIR OWN MONEY; can the purchasers still use the methods as we discussed in the earlier pages ?

Thanks, Bro,...

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?

Dario, thank you for your reply.

Vendor's lawyer mentioned that there have been scenerios whereby consent took up to 9 months. Said he has to protect vendor's rights and insist on 1 year. (this is even with an additional 3 months extension) My lawyer agreed. Reason why I am concerned is that I get the impression that vendor thinks he can take his time through the paperwork. Because he's not living in Malaysia, he mentioned that he'll come back around end of Feb to sign the snp. And this is only snp stage....sigh...

Is there really no win win situation in this matter? Is there any clause I can add to protect myself. My lawyer is not being very helpful...

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?

Bro,... great opinions there. Thank you.

To your last question, I found out this group of purchasers had a meeting with the Developer, which was witnessed and arranged by the local authority. The developer gave their consent in front of everybody, and later followed-up with a letter saying that the houses have been surrendered back to the purchasers to be completed using the purchasers' own money.

Hence, everything has been documented carefully under witness by many parties and the houses surrendered back fully to this group of purchasers to be completed on their own.

Tks, Bro.

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?

Hi Bro,... I have some opinions of my own though - there was never a letter mentioning that the land will be MOT'ed back to the purchasers, just that the properties are surrendered to the purchasers for completion. So will there be a weakness here when these purchasers try to do their MOT ?

About Dan,... hey, did you "disagree" with him that badly,.. hehe, kidding,.... but it would be good if he gives a say to this too.

Looks like there are ways for purchasers to take back their abandoned houses today.

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!

I would think, if you are willing to wait out the 1year for the state consent... then the agreement that they will obtain state consent within that period should be a benefit to you.

Maybe get an undertaking from the Vendor to obtain the State Authority's Consent within that period of 1 year + a 3 month extension.

You may want to consult your lawyer on these, assuming that your lawyer has not already spoken to you about this nor inserted them into the Agreement -

(1) whether you can further enforce your rights in the manner speaking by asking for an undertaking from the Vendor to obtain the State Authority's Consent within the period and/or extended period.

(2) whether it is possible to include within the "termination by purchaser" clause, that by the failure, omission, neglect or refusal by the Vendor to comply with his undertakings and covenants under the Agreement, the Purchaser shall be given the option to terminate the Agreement. And, from the termination, the Vendor has to return to you, all monies he has received + pay an additional sum equivalent to 10% of the Purchase Price.

(3) whether it is possible to include in the agreement that the Vendor within 14 days from execution of the Agreement to make the application with all due diligence to the relevant state authority.

(4) who should appeal if consent is rejected, at whose cost.

Dariofoo, I would like to know what you think about inserting such clauses into the SPA agreement as well....

Hi,

Can any kind soul out there advise me on the procedure for selling a property to a direct buyer?

The buyer have asked me to give him a copy of my S&P in order for him to ask his lawyer to process the paperwork. Is this the right procedure? I feel uncomortable to give my S&P to a stranger. I am first time selling so is not familiar with that.

Also, do i need to appoint own lawyer or can i just use the buyer lawyer as I have outstanding mortgage loan.

Thanks.

This post has been edited by anjoilin: Jan 22 2011, 03:45 PM

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?

Very true, all of it... Now that I've come to think of it, 15 months is indeed too long

Thanks for the clarification... I've learnt something new today.

Just a few questions tho,

Is there anything that mentions that the Vendor has automatically (for example) 6 months to obtain consent? Or is it usually a period that is negotiated?

Can clarify about the nature of 'undertaking' further? ... I know it only as a formal guarantee, or promise or agreement to do something and it should be legally binding on the person who gave the undertaking.