There are two types of Auctions. One is known as high court/land office and the other LACA (loan cum assisngment). LACA only when the master title is not split into individual titles or strata titles.

For high court auction, banks will absorb quit rent and assessment as both are required for a transfer to take place. However, service maintenance, late interests varies and you need to read the POS carefully.

Now, this is where it gets interesting. Rightful owner, beneficial owner and succesful bidders have different rights. You will be bidding for the property which means you have no rights to the property at the moment. Bidding for it doesn't mean you will definitely win. Hence you have no rights to knock on the door and ask the "tenant" or the "owner" to leave. Personally, I have knocked on doors before signalling the resident my intention to bid for the property. It will give you a rough gauge of how hard it might be to chase them away later if you did win. Most of the time, if it is tenants residing, they would tend to coperate and some would ask me to rent them the unit once I buy over. I tend to minimise further any damage by giving them the same rent as they are paying to their current landlord. But beware, some would lie and then you need to inform them the real market rental rates.

Caveat is not as simple as you think. You cannot simply lodge a caveat. A caveat would not prevent a transfer, just create more hassle for you to remove it. If you suffer losses as a result of a negligent caveat, you can even sue the person who lodge the improper caveat. for high court cases, normally it is quite safe to buy even though there are caveats. Remember, the banks always win.

You do not need to pay 1% to an agent for auction cases. In many cases, these agents are paid by the banks. A simple courteous note to your agent telling him/her you will need to consult the auctioning bank regarding the agents fees, they would freak out as they would be blacklisted by the auctioning bank.

Buying auction properties in the past could make money as most would end up 15-20% cheaper than market values. Looking for 30-40% would only happen in undesired locations. but these days, perhaps the market is flushed with money, occasionally auction properties might end up higher than the market value by 5-10%. Why? Auction can be a very emotional event. In the midst of wanting to win, you might exceed your budget.

If you are planning on going to the said auction, I wish you all the best.

No doubt the bank lawyers can be quite efficient at delaying you (the longer they drag, the more interests they can charge to the previous borrower) and sad to say, I personally have been given first hand experience with Maybank. I was rather inexperience then and thought that by using Maybank as my bank, I could save time but I was wrong. being inexperience, I had to pay the balance post auction 120 days with cash. Of course I do not allow it to happen again. There are many ways to protect yourself and I am sorry I shall not share the methods and the best person to give you advice is of course your lawyer.

BTW, for auction properties I read someone paid RM800 for outstanding TNB bills. Actually for. TNB you do not need to pay. All you need to do is to create a new account. They would not blacklist you for other people's outstanding. If you have problems with that, feel free to contact Che Khalid. I am sure he will be happy to assist you. hehehe

I always asked my friends who wants to try their luck with auction to go and test the water. Set the budget a bit lower to get a feel. Owner coming to auction has been a trick of the book from ages ago. Unfortunately you should not sympathise this fella. Afterall, he did not pay the bank. Everyone has their own problems.

Once an auction property has gone through the hammer in high court, there is no way the borrower can reverse unless of course if he can prove there are irregularities. he might have a fighting chance if he has valid reasons before the auction.

People who truly makes money from properties are those who purchase from auctions or distress properties. It is a simple equation of higher risks higher return. Trust me, the first auction that you have succesfully bid for will only spur you further to look at other auctions. The only subsale deal I have done are those who have owed quite a bit of money. If you know your way around, "people" will tell you which properties are in distress. I hope I won't be showing off by saying this. My average capital gains in the past 5 years base on acquisition price against my selling price has been slightly over 100%. My yield against total acquisition price and incidentals (purchase, renovation, legal, finishings) is in the region of 14% and my ROI is nearly 30%. Impossible?

Good luck to you and wishing you all the success in properties.

Now here's the tricky part. Yes you need to pay maintenance straight away after you win the auction. Actually the old owner has no right to collect rental. Unfortunately most banks did not ask previous owner to sign assignment of rental otherwise the bank has a right to collect rental. You don't have a right either. If I am the tenant I will pay to no one. But a trick I use is to scarf the tenant telling them to pay me immediately. Failing which upon transfer, I will kick them out. It has worked well so far.

Thank you. For auction property it is crudely call paying up rather than redemption. Once we have paid the auction bank the balance of the successful bidding price, the lawyer will arrange for a transfer. If it is high court, it is quite easy as the auctioning bank would have most documents ready and being approved by the courts, transfer can take place quite fast. You will be given your title (or a copy if you charge it to the bank). Floor plans are not included in those documents. you need to contact the management office for a sample floor plan. However, some offices might take a little bit more effort in asking for it.

For LACA cases (and in high rise) it could be a little more difficult. Having a good lawyer is of vast importance as a clumsy lawyer could screw up your timing, and hence you might not be able to draw down by 90 or 120 days (depending on POS). Once that happens, you need to come up with the cash to pay up the balaence. Again, this would not be good especially for the investors as once you have the ability to pay up, then you cannot claim interests payable against tax.

The temporary contract is called Memorandum of sales is actually quite an important document and it is not temporary. In some ways, that is the "SPA".

Hope the above helps.

It depends on how daring you are. Since the property is not yours just yet, and in case it cannot be transferred, whatever you put in will be someone else's. So you might end up renovating for someone else.

A bank never loses. When you give your 10% it is not refundable unless it is the fault of bank or auctioneer. With LACA cases, you need to be very careful as to who the developer is. You need developer consent for all transaction. If a developer liquidates, I don't know what are the process for transfer. Could be tough. I have one case hanging from 2005 until now. But I have collect enough rental and the previous owners do not give a damn.

You need to becareful with the 18 months defect guarantee as the developer signed the SPA with the previous owner. They might not be obligated to fix it for you. Just like deed of covenants. Those who purchase via auction will not sign one. So I always tell the management, it is really up to me to cooperate with them. If they are nasty to me, i would not be cooperative. A lot of management companies fail very badly with the Strata Title Act and Building and Common Property Act (maintenance and management) 2007. Both are very un-detail, probably less than 100 pages but yet no one bothers to read them.

I am involved in a lawsuit against a management company with what you have said above, so I cannot comment about my suit. At current level, yes, you need to pay all 3 different management as you are owing the "community" not a company.

Is the title still under master or it has strata title already? If there is strata title, then developer not involved, so you do not even need developer's consent.

There shouldn't be any drawback. In fact for some of the properties under master title, you can claim outstanding maintenance fees from the auctioning bank (but do read the POS carefully as some banks nowadays do "cheat" and not pay). However, one most important thing about auctioning under master title is to make sure the developer is NOT bankrupt as it can be problematic for your transfer as you do need developer's consent.

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Added on April 27, 2011, 10:33 pmUnfortunately this is something I cannot share but if I have the opportunity to share in future, I would. I wouldn't advise you to sue though. The best way is to ask the management if it is under master or strata title. If you would want to share with me in private your case, perhaps I could share my opinion. Cheers.

This post has been edited by michaellee: Apr 27 2011, 10:33 PM

No worries. I try to help where I can. Yes, if you cannot get consent by the stipulated date, you might be in for a bit of a trouble. Unless you have cash to settle the balance sum, your bank may not release money.

Personally, I am on good terms with quite a number of developers and hence a lot easier when performing tasks. But still, there are quite a few cases where I had to go all the way until the last minute (4pm of the last day without any interest penalty) by screwing the auctioning bank, auctioning bank's lawyer and developer. At the end of the day, the cheap property makes it all worth while.

Hopefully you can find a property that you like soon! Good luck in your property hunting.

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Added on April 28, 2011, 3:24 pmUnfortunately that is not so. The risks is on you as a purchaser. The bank will not be responsible for any lapses in transfer.

This post has been edited by michaellee: Apr 28 2011, 03:24 PM

Yes you can and it is definitely worth a try. But having said that, the bank may give you another 30 days and thereafter 8% pa interest. Just becareful with LACA auction.

What do you mean? Buildings are under Commisioners of Buildings.

I see. I think your main grouse is still on the outstanding maintenance fees. Unfortunately, it is assumed under the Building and Common Property Act, the unit owner is expected to pay all outstanding. Because of the way you purchase the property, the bank has effectively transfer all liabilities to you, whether you like it or not. You do have a right not to purchase the property but if you do continue to bid and purchase, the liabilities will be transferred to you. I know of another purchaser who is currently fighting in court but I think it is an ongoing case, so I do not know how the judge will rule. But personally I believe it won't be easy. You will suffer ultimately, because if you don't pay, management will not give you water or other assistance, you won't be able to rent out the unit. How much is the outstanding anyways?

BTW, I think the correct person to check with regards to the legality of the management corporation or joint management body would be commissioner of buildings rather than local council as they have to report to COB.

Auction properties depending on if it is high court auction or LACA. For high court auction, it usually clear you of everything including unnecessary caveats but excluding government's caveat, eg. IRB, customs, police, etc. Eventually the government agencies will clear the caveats, once they received their supposed share. But I wouldn't touch government caveats with a 10 foot pole even if it is way below valuation. Individual caveats can be removed but takes time, so might be difficult for your financing bank to draw down on time.

Something which I noticed since late last year was that POS for the whole west malaysia high courts seemed to have been standardised (I have only seen POS for high court in KL, Seremban, Malacca and JB). So if it is so, then you do not need to pay the difference at the auction date but to settle the differences within the stipulated time.

Don't get the same bank to pay off as I had previous experiences where the bank ain't in a hurry to pay off and I had to come up with cash. Very bad of the bank.

You can apply the loan anywhere you want. Not just malaysia, as long as they are happy to lend you.

You need your own lawyer to do the transfer. But seriously, you must make sure you have cash at hand in case your bank cannot draw down on time. Or you will lose your RM40k initial deposits.

Hi, I understand your concerns but I have explained both in PM and in public on the risks of buying properties from auction. It is best to steer clear of such purchases unless you have seen it done before or have plenty of cash to play with.

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Added on April 7, 2012, 2:05 pmOkay, I am going to say something which will surprise you. If you look closely at the facilities agreements, your so called lawyers are actually acting on behalf of the bank and NOT you even though YOU will be PAYING for the bills. It is weird but true. In the sense that if something were to go wrong, your lawyer cannot actually help you. So you do not need to use their panel lawyers for transfer as it is non of the bank business but the vendor can accuse you of picking the wrong lawyer/banker which caused the deal to be delayed and hence penalise you heavily by way of interests or forfeiture of deposits. It can sometimes be a dog eat dog games and survival of the fittest. If you have enough volume, banks and lawyers would usually try to accomodate you. If you are going to see your lawyer once every 5 years or so, don't expect the best of customer services.

I have one single experiences with MAYBANK. I can say out the name of the bank as it is a true case incident which happened some 6 years ago. I bought a LACA property from MAYBANK auction and thought that it would be best to use the same bank so expedite the matter. Loan approval done and ready. But their auction side was extremely slow from missing papers to whatever. Given that I knew the developer quite well, they were even ready with the direct transfer documents (from master to strata) to my name within a couple of weeks from auction. I made a complain to their head of customer services but at the end decided not to follow it up as it may costs someone their jobs. I rather allow these people continue working so that will give me plenty of excuses not to use Maybank. It was delayed by more than 2 months and I had to settle by cash, even though it was entirely their fault.

This post has been edited by michaellee: Apr 7 2012, 02:05 PM

Facilities agreement is not the same as SPA. So only one lawyer will be used which will be the lawyer, whom you have hired but must be under the bank's panel and that particular lawyer, you will need to pay them (with discounts if they are happy to give you some) but they will end up as banker's lawyers. Confusing? Yeah, a lot of seasoned players didn't know that even. Most lawyers will not sue banks as they are worried that the bank will not give them businesses later on. But you can always complain about lawyers to the bar.

The auction you are going for is by CIMB. That does not mean you need to use CIMB panel lawyers but rather the panel lawyers of the bank you are hoping to obtain loan from.

As for before auction, it is optional to register with licensed auctioneer/agent/bank. Unless you are getting some kickbacks (not so proper) best is you do not register, as some auctioneers may not be ethical enough and "inform" friends to kacau the auction.

After auction, depending on how the POS is worded, you may or not have to top up the balance of 10%. So far since late last year, I have seen all POS for high court do not require the top up. Kindly advise if any of you have seen otherwise. You do not sign SPA for auction properties but MOC (Memorandum of contract). The lawyer will need to help you prepare the transfer documents. At the same time, you need to look for a bank to do up your loan. Best to use the same lawyer for transfer and loan to prevent delays in communications. For auctions you do need to hassle your lawyers to remind them of the 90 or 120 days. Most lawyers couldn't give jack shit and I have seen a lot of bidders who are not able to complete on time and hence the need to pay cash for the balance. A good lawyer with good follow up will ensure that the delay is minimal. Remember time is of essense in completing such documentations.

To ensure the title is clean for transfer. As per above, it is NOT necessary to register. Any agents telling you so is trying to secure their commission from banks. And the auctioneer is right. Just go on the day with the appropriate documents will do. Like I said, unless you are getting some kickbacks, there is really no point in registration.

There are two types of auctions, high courts and LACA. For high court, no approval is necessary even for bumi lots. It is transfer straight away without restrictions.

If LACA, then yes, you need plenty of approvals, etc.

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Added on April 7, 2012, 11:27 pmShould be the same. Though for high court auctions, lawyers are more willing to give more discount as less work is needed to complete the transfer.

This post has been edited by michaellee: Apr 7 2012, 11:27 PM

Like all my other postings, I will only talk about the proper ways of doing things. For the kacau part, you need to gain more experiences then you understand. I have given a BIG HINT that unless you have KICKBACKS, there is no point in registration.

It is not about rich or not but learning the right thing. I already said, no need to register. Just don't register la, I mean what benefits do you have with registering your name?