TOPIC 5: THE SALE & FINANCING OF PROPERTY WITHOUT TITLE

Property with individual title Property without individual title

There is no any separate document of title There is no any separate document of title
because the property is still under the master because the property is still under the master
title. title.
Memorandum of Transfer (Form Deed of Assignment (by way of
14A) will be used as the instrument of transfer) will be used to assign rights and
transfer to effect the legal transfer of the interests in the property from one to
property to one to another. another.
Upon conducting the relevant land search on Only can conduct land search on the master
the property, the land search report will be title.
able to show the title details, category of
land use, the particulars of the property
owners, whether the property has been
charged to any bank and whether any caveat
has been entered.
Proof of ownership – name of the property Proof of ownership – all the original Deed
owner is duly registered on the title deed of of Assignments made previously are the
the property. evidence to trace the beneficial owner.
N/A Developer of the property will be involved
in the sale and purchase transaction, such as
letter of confirmation from the developer
will be required, requirement to notify the
developer in relation to the sale assignment
and so. All these would become the
essential terms and conditions in the Sale
and Purchase Agreement.
The duly dated and stamped Memorandum The duly dated and stamped Deed of
of Transfer must be presented at the relevant Assignment cannot be registered at any land
land office together with all the necessary office. However, some necessary steps need
accompanying documents and requisite fees to be taken to perfect the sale assignment,
to effect the transfer. such as the notice of assignment.
The process of selling and buying is The process of sale and purchase in property
completed upon full settlement of purchase without individual title will be completed
price and of course, issuance of a new title when all the rights and interests in the
deed duly registered under the name of the property have successfully been passed to
new purchaser. the new purchaser in exchange for the
purchase price of the property.

Schedule H – Form 16A, high rise building, build and sell

Difference between SnP With and Without Title:
1. The search on the master title
2. The consent

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 3. Although we are asking whether MOT is executed, in reality the PS did not give any
Form 14A to vendor to execute a Form, because there is no title available. Instead
there is letter of inquiry.

• Schedule H HDR: (Building intended for Subdivision)

• Cases:
• Foong Seong Equipment Sdn Bhd (Receivers & Managers Appointed) v Keris Properties
(PK) Sdn Bhd [2009] MLJU 421
• Yeoh Cheng Han & Anor v PPH Resorts (Penang) Sdn Bhd [2011] 3 MLJ 207
• Lim Chon Jet @ Lim Chon Jat & Ors v Yusen Jaya Sdn Bhd [2011] 5 MLJ 239
• Oxbridge Height Sdn Bhd v Abdul Razak [2013] MLRHU 808 [2014] 1 LNS 1449
unreported
• Audrey Gertrude de Souza v Sunway D’mont Kiara Sdn Bhd [2015] 4 CLJ 853 (C.A)
• Yee Hock Lai & Anor v Unity Performance Sdn Bhd [2014] 3 MLRA 598 (CA)

5.1 INTRODUCTION
• Sometimes individual sub divided title may be pending when the SPA is executed. This
could be applicable whether it is sub divided land with building on each unit or high rise
buildings such as flats, apartments, condominiums pending issue of strata title.
• The process for loan application will be the same as in Lectures 1 and 2. As soon as the
SPA is executed the Purchaser starts applying for a loan.
• Eg. Buyer purchases a condominium unit under Schedule H HDA for RM 500,000/-.
He is capable of settling the 1 st 10% of the purchase price and seeks financing for the
balance of 90% . However strata titles are not issued yet.
• You may refer to ‘Janab’s’ for precedents given in Chap. 6 from p 311 onwards. However
note that the eg. given may be slightly different. You will have to note the differences and
modify accordingly.

I. SALE
• The Vendor Solicitors (VS) shall prepare the SPA stating particulars of –
The V’s name, address of registered office, license no. details of the property as required
under Schedule H / J .
• The VS will then write to the Purchaser’s Solicitor (PS) forwarding 5 sets of the SPAs for
completion of particulars – name, NRIC, address of Purchaser and execution by the
Purchaser

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• PS will –
(i) Vet the SPAs, write to the Purchaser requesting the Purchaser’s particulars his NRIC,
income tax no. and address of the branch office, 10% deposit to execute the SPA and also
forward a copy of his bill for fees.
(ii) make a title search on Master Title and a company’s winding-up search on the vendor
(iii) prepare 5 sets of stamping Proformas (Now we use e-stamping)
(iv) prepare entry and removal of private caveat on Master Title specifying P’s parcel and
interest
• If everything is in order, the Purchaser then executes the above mentioned documents pays
the 1st 10% of the purchase price and settles his Solicitor’s bill.
• The PS then forward the duly executed documents and the 10% of the purchase price to the
VS for V’s execution.
• PS will lodge a private caveat on the Master Title identifying the P’s interest, on behalf of
the P (in current practice, the PS needs to seek for the consent from the Developer prior to the
lodgment of the private caveat).
• The Purchaser has a reasonable time from the execution of the SPA within which to finalise
his loan.

II. LOAN
• Purchaser applies to Bank – PB for a 90% loan. PB processes the application and issues a
Letter of Offer to Purchaser with copies to PS and PB’s Solicitors (PBS).
• Purchaser replies accepting the offer.
• PB instructs PBSto prepare the loan documentation.
• PBS then write to Purchaser requesting him to attend at their office bringing along with
him:-
(i) Original SPA
(ii) Copy of his NRIC
(iii)Settlement of their professional fees and disbursements as per their enclosed Bill.4
• Conduct three mandatory searches
• Write three letters of Enquiry to PS, V/VS and V’s Bank (Assignee/Chargee)
• Purchaser’s Solicitors (PS)
(i) has MOT been executed and adjudicated and if so forward the duly adjudicated and
registrable MOT; and

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(ii) where applicable the Consent / Notice of/ to the original title holder (usually the
developer) and in the event of any restrictions in title the Letter of Consent from the relevant
authority to the same in favour of the Purchaser.
• Vendor’s Solicitors (VS)
VS enquiring as to whether the property is charged and if so:
(i) whether the differential has sum been settled;
(ii) particulars of the Chargee bank and the redemption sum for the particular parcel
(iii) The Letter of Undertaking from the V to PB:-
to refund the loan sum released by PB in the event that the sale of the property in favour of
the Purchaser cannot be ‘ perfected ’ and consequently the assignment to PB cannot be
‘perfected’. Upon the issue of strata Title to provide a duly executed, validly stamped and
registrable MOT of the said property in favour of the Purchaser upon issue of separate IDT
so that the assignment to PB can be converted to a charge in favour of PB to the said
property.
(*This is extra and has to be negotiated with the Bank to avoid future problems)
• V’s Bank / Chargee Bank
Request the Redemption Statement from the VB/ Chargee Bank:
(i) In consideration of PB paying the redemption sum a Letter of Release and Disclaimer
from VB once the redemption sum is paid, releasing the Purchaser’s parcel from any legal
proceedings against V;
(ii) In consideration of PB paying the redemption sum VB’s Letter of Undertaking to PB to
refund the redemption sum released to them in the event the Redemption cannot be perfected;
and
(iii) Undertaking to forward all the original documents evidencing title
• PS will reply:
(i) that title has not been issued yet
(ii) Upon issue of title they will forward the duly adjudicated and registrable transfer in
favour of the P
• V/VS will reply:
(i) that that the Differential Sum has been fully settled by the Purchaser
(ii) the particulars of (VB) Chargee Bank
(iii) V’s undertaking to refund all loan monies released in the event that the purchase cannot
be perfected.
•VB will then write to PBS:
(i) providing the Redemption Statement cum Letter of Undertaking
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(ii) that upon the release of the Redemption Sum their undertaking to: deliver all the original
documents and duly executed Letter of Release and Disclaimer excluding the P’s said Parcel
from any foreclosure proceedings upon receipt of the full redemption sum for the P’s parcel
(iii) Letter of Undertaking to refund the redemption sum in the event the redemption cannot
be perfected.
• Upon receipt of the reply from PS, VS and VB giving the particulars requested for, the PBS
will then advise PB to release the redemption sum.
• PB will proceed to prepare the Loan Agreement cum Assignment (LACA) with the Power
of Attorney for the execution of the Purchaser and PB and also prepare a private caveat for
PB .
• * It is advisable for the purchaser/ borrower to negotiate with the bank that in the event that
individual strata title is issued and the MOT executed and presented for registration the
LACA should also be converted to a Charge and registered.
• PBS upon receipt of the redemption sum will forward the same to the VS upon their
undertaking to forward:-
• The original documents evidencing title of the said property
• Undertaking to refund the same in the event that the LACA cannot be perfected.
• VB will upon receipt of the redemption sum provide a
Letter of Release and Disclaimer (LR & D)and forward it to
the VS/ PBS with all the original documents evidencing
title.
• PBS will upon receiving all the above:
(i) date and stamp the LACA; and
(ii) advise PB to release the balance of the loan to the VS as applicable.
(iii) PBS will also proceed to register the PB’s Power of Attorney pursuant to the LACA and
(iv) lodge the private caveat for PB.
(v) The original of these will be sent to the PB and copies to the Purchaser.

III SUB SALE - P1 to P2 & FINANCING FOR P2

• P1 now becomes the vendor in the sub-sale.
• PS now becomes PS1 who will in fact be the vendor’s (P1) solicitor.
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• The sub-sale Purchaser is P2 and his Solicitor PS2.
• P2’s Bank is PB2 and the solicitors PBS2.
(i) PS2 will conduct the same steps as above for the sub sale
i.e conduct searches etc.
(ii) write to PS1.
(iii) request PS1 to send of Notice of sub-sale to V and any other relevant authorities as may
be required as per s.22 D (2) HDA 1966 [Refer Lecture 3 Part 2].
(iv) send V a Letter seeking confirmation of particulars of the property and vendor and P1 etc.
under s. 22D(4) HAD 1966
(v) Advise on execution of SPA2 and Deed of Assignment assigning all of P1’s beneficial
rights, title, interest and liabilities under the SPA1 to P2. However P1 will only sign the
SPA2. He will not the DOA until notification of the redemption of P1’s loan
(vi) enter caveat for P2.
22D. Assignment.
(1) For the avoidance of any doubt, an absolute assignment in writing, under the hand of
the assignor of the housing accommodation, not purporting to be by way of charge
(2) only, of the proprietary right or interest in the housing accommodation and the legal
chose in action in the sale and purchase agreement in respect of a housing
accommodation, of which express notice in writing has been given to the housing
developer by the assignor in the manner set out in subsection (2) shall be deemed to
have been effectual in law to pass and transfer the proprietary right, interest, chose in
action and all legal and other remedies for the same to the assignee, from the date of
the receipt of such notice by the housing developer, and the concurrence of the
housing developer shall not be required.
(2) Subject to subsection (8), every notice of assignment given to the housing developer
pursuant to subsection (1) shall be delivered by the assignor or his solicitors to the housing
developer at or after the completion of the sale and purchase between the assignor and the
new purchaser of the housing accommodation and shall be accompanied by-
(a) duly stamped sale and purchase agreement between the assignor and the new purchaser of
the housing accommodation, if any;
(b) duly executed deed of absolute assignment between the assignor and the new purchaser of
the housing accommodation together, if applicable, with a letter of undertaking from the new
purchaser or the new purchaser's financier, as the case may be, to deliver the duly stamped
deed of absolute assignment within fourteen days after the same has been stamped;
(c) full payment of all sums and outgoings due to the housing developer under the sale and
purchase agreement.
(3) A housing developer shall keep and maintain an up-to-date, proper and accurate register
of all purchasers of the housing accommodation until separate or strata titles for all the
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housing accommodation in the housing development have been issued by the appropriate
authority and registered in the names of all the purchasers of the housing accommodation in
that housing development.
(4) The housing developer shall provide all necessary and accurate confirmation of the
records in the register whenever requested by a purchaser of the housing accommodation or
his solicitors or his financier or his financier's solicitors subject to a payment of a fee not
exceeding fifty ringgit or such amount as may be prescribed from time to time for meeting
every request for confirmation in respect of all of the following:
(a) full particulars of the housing accommodation;
(b) the postal address of the housing accommodation;
(c) the current purchaser of the housing accommodation;
(d) the current chargee or assignee of the housing accommodation;
(e) the total amount due to the developer under the sale and purchase agreement as at the date
of the confirmation; and
(f) such other matter as may be prescribed from time to time.
(5) Any person who requires any consent from a housing developer to any absolute
assignment or assignment by way of charge in contravention of subsection (2) shall be guilty
of an offence and shall, on conviction, be liable to a fine which shall not be less than fifty
thousand ringgit but which shall not exceed one hundred thousand ringgit or to imprisonment
for a term not exceeding three years or to both.
(6) Any housing developer who-
(a) requires any consent to any absolute assignment in contravention of subsection (1);
(b) imposes any condition to any absolute assignment or assignment by way of charge
including requiring the new purchaser to execute any additional agreement or make any other
payment in contravention of this section;
(c) fails to comply with subsection (3); or
(d) fails or refuses to provide any confirmation in contravention of subsection (4) or imposes
any condition or any other fee in respect of any matter arising from subsection (4), shall be
guilty of an offence and shall, on conviction, be liable to a fine which shall not be less than
fifty thousand ringgit but which shall not exceed one hundred thousand ringgit or to
imprisonment for a term not exceeding three years or to both.
(7) For the purpose of this section, references to "new purchaser" wherever appearing shall
include a purchaser's financier or any beneficiary under the estate of a deceased purchaser or
an assignee under an absolute assignment whether with or without consideration.
(8) The expression "completion of the sale and purchase" in subsection (2) in relation to a
deed of absolute assignment executed in favour of a purchaser's financier or any beneficiary
under the estate of a deceased purchaser or an assignee under an absolute assignment whether

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with or without consideration not in pursuance of a sale and purchase agreement shall mean
the date of that deed of absolute assignment in which case paragraph (2)(a) shall not apply.
(9) This section shall apply to any housing accommodation where separate or strata title for
the housing accommodation has not been issued by the appropriate authority.
LOAN for P2
• PBS2 as above – write to PS2, PS1 and PB1
• PS2 :
(i) whether the DOA has been executed and adjudicated
(ii) undertaking to forward duly adjudicated DOA
(iii) Notice to V and Letter of Confirmation from V regarding particulars of the property and
ownership.
(iv) Upon issue of Strata title to forward the duly executed, validly stamped and registrable
MOT of the said property in favour of the P2 upon issue of separate IDT to the said property
and quit rent and assessment receipts.
(v) As well as the original stamped SPA between the original Vendor and P1 and all
subsequent documents evidencing beneficial ownership [ **and / title of the present vendor –
if the vendor is not the initial purchaser.]
• PS1 :
(i) whether the property is charged and if so particulars of the PB1 and the redemption sum
for the particular parcel.
(ii) To forward the:-
-The duly executed and stamped SPA2 and Deed of Assignment between the P1 and P2
-where applicable the Consent of / Notice to the original title holder and in the event of any
restrictions in title the Letter of Consent from the relevant authority to the same in favour of
the P2
(iii) The Letter of Undertaking from the P1 to PB2 to refund the loan sum released by PB2
in the event that theassignment of the property in favour of P2 cannot be ‘perfected ’.
• PB1:
(i) The Redemption Statement
(ii) In consideration of PB2 paying the redemption sum, PB1’s undertaking to:
-Forward the duly executed and stamped Receipt and Reassignment (R&R) with the Power
of Attorney clause revoked and registered in the High Court.
• PB1’s Letter of Undertaking to PB2 to refund the redemption sum released to them in the
event the Deed of Receipt and Reassignment cannot be perfected.

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• PBS2 upon receipt of the required information and undertakings from PB1 and PS1 will
advise PB2 on the release of the redemption sum.
• PB2 upon receipt of the redemption sum will execute the Deed of Receipt and
Reassignment and revoke the PA1 at the High Court and remove their caveat.
• PS1 will also reply that that the Differential Sum has been fully settled by the P2.
• Upon receipt of the Deed of Receipt and Reassignment and revocation of PA1, P1 will
execute and date and stamp the Deed of Assignment in favour of P2.
• PS2 will then forward the stamped DOA to PBS2.
• P2 will execute LACA2 and Power of Attorney 2 which will then be registered in the High
Court.
• PBS2 will upon receiving all the above documents date and stamp the LACA2 advise PB2
to release the balance of the loan to PS1 as applicable.
• * It is advisable for the purchaser/ borrower to negotiate with the bank that in the event that
individual strata title is issued and the MOT executed and presented for registration the
LACA should also be converted to a Charge and registered .
• The original of these will be sent to the PB2 and copies to the P2.
•Delivery of VP
• Filing of Borang I
•Assignment’s case does not involve of presentation of instrument/ documents to the land
office for registration.
• Serve NOA to the Developer/ Revocation/Registration of Power of Attorney at the High
Court.

FIVE REASONS WHY YOU NEED A STRATA TITLE

1. As ultimate proof of ownership
2. As a dealing instrument for instances of charging to banks for loans
3. To facilitate disposal of property, should you wish to sell it, so that you don’t need to
pay the consent fees to the developer
4. To be able to get involved when the management corporation is formed by owners of
the units in the subdivided building to maintain and manage the property
5. As final proof of the built-up area of your unit and ultimately your apportionment of
the share in the total aggregate units.

Sale of Commercial Properties by Developer

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(a) Transactions that do not come within the HDA & are subject to the Developer’s
consent
• Lee Ming Chong Sdn Bhd v Prudential Properties Sdn Bhd [2012] 8 MLJ 1
(b) Administration Fee payable to Developer
• Bank of Tokyo v Mohd Zaini b Arshad [1991] 2 CLJ 989
• Tan Yang Long & Anor v Newacres Sdn Bhd [1992] 1 CLJ 211
• Isabela Madeline Roy & Ors v Sarimah Low bte Abdullah & Ors [2005] 2 MLJ 521
• Hong Leong Bank Bhd v Goh Sin Khai [2005] 3 MLJ 154
• Lim Seang Mee v Keepahead Holdings Sdn Bhd [1992] 2 CLJ (Rep) 776

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