I am buying a properties with my friends which has no relationship. Due to the friend of mine already own 3 properties and he is not able to get 90% Loan. So the bank advise us to apply loan and s&p under my name ( this is my first properties) to get 90% Loan. And bank also advise to form a sub-contract between me and my friend stated that both of us own the house. Is this a common way to do it? Any lawyer able to help answer. Thank you

I don't think this kind of "sub-contract" has a footing.

Land office only recognise the owner through the title.
If S&P purchaser is solely your name, then the property is yours.
End of story.

It is always not advisable to buy property with joint name, potential messy and troublesome in the future only.

Why not go for 3rd party charge? SnP 2 names and Loan under your name.


Or if really no choice as you mentioned above, there is some way out of it such as Prepare a trust deed. Enter caveat to protect your interest on that property. Can pm me if you wish to clarify more on it. Hope this answer part of your question.

Hmm... last time I chat with banker, I think it is no more possible to have SnP 2 names when loan under a single person name

not all bank accept snp with 2 names when loan under a single person. just need to find which back accepts that, i think cimb or maybank allows that. bought under my name and wife but charge to bank my wife only.

i dont advise on sharing names with friends, if your friend defaults the responsibility is under you.

Hong Leong doesn't accept as well.

Rule of thumb:
(a) banks don’t mind a lot of borrowers (in fact more the MERRIER BUT on condition each of the borrowers have a maximum of 2 loans)
Note:- this guarantees the bank to get back their money. Cannot get from one, can still whack from the other 3.

(b) banks prefer to have either ONE or ALL of the borrowers reflected in the SPA but not a third party.
Note:- why One person in the SPA is better? Fuuuuuuuu… you make the Bank’s lawyer life so easy, just deal direct with one person.

Current case law with respect to third parties in the SPA from what I understand is a bit iffy, there has been arguments raised that for example, since A is the one who took a loan from the Bank, B should not be liable for it. The Bank should pay B his portion of the sales proceed of the house. This effectively means the bank won’t be able to recover full amount. Also, there is a possibility B is going to throw up all sorts of legal arguments, effectively stalling the Bank’s recovery process.

As advised, don’t EVER share loans with a friend.

Though the national land code recognizes “contractual arrangements” entered into by the parties (example SPA), which in turn allows an “interested person” to caveat the land because he/she has an interest in it, you have to bear in mind the pitfalls…

The national land code is pretty clear, whoever is the registered proprietor in the land registry is the owner of the land. Of course there are other interested parties example banks.

Now you jump on the bandwagon and say, hey look I am an interested party as well even though my name is not in the SPA (or in other circumstances my name is not in the Loan Documentations). However, there is this piece of paper between me and my partner that say I have an interest in the land in question.

So imagine, you now have a dispute. Your “Partner” is the registered proprietor on RECORD. The Bank has a charge over the land. Suddenly, you come into the picture with a piece of paper. While both your Partner and the Bank enjoy protection under the national land code, you are force to stand under the rain and rely on contract law.

If I am not mistaken your caveat, if you attempt to lodge, is subject to the Bank’s interest in the land. You will need to seek Bank’s approval before they will allow you to lodge your caveat on the land. The Bank be like “here’s a kite, go fly it”.

Thank you all for the help

Whatever Oral Agreement between you and your friend, it is better to put in paper (Black and White).

Oral Agreement doesn't recognise in Malaysia.

Oral agreement is still recognized and binding in Malaysia but it will involve a lot of complexities (like he said, she said and … etc.)

Besides, every day you are entering into a verbal agreement. You just don’t know it.

Example:

When you go and repair your car. When you buy grocery in a market. When you need plumbing service. Etc…

May I know where you learn this knowledge? Which Book?

i learn from Google.

book ermm... contract act 1950.

I go one step further and quote you the section:-

9. Promises, express and implied
So far as the proposal or acceptance of any promise is made in words, the promise is said to be express. So far as the proposal or acceptance is made otherwise than in words, the promise is said to be implied.

I thought you going to shoot me with your Evidence Act Section 91 & 92 and illustration. Which I have forgotten.

It's simple and straightforward just google and see whether oral agreements are applicable or otherwise.

why not? third party owner. still valid until today

Hmm... not sure, ask my banker friends and he told me that it is difficult and will be pending bank discretion. According to him, it usually only works for family members, husband working, wife not working. Or Children working, parents not working.
For TS case, since both partner is working and non-related, and TS is taking the full loan of the house instead of 50%, bank mostly will not approve.

Well said.