The following summarises the strata title system in Malaysia as is governed by the Strata Titles Act 1985 (Act 318):

     DUE DILIGENCE    

With Strata Title

Strata Title Search (where issued)

Memorandum of Transfer

Without Strata Title

Stage of Issuance

Consent of Developer

Master Title Search

Transfer by Assignment

Buying a property from developer where strata title has not been issued

If the housing developer has not obtained a strata title for the Property it sells to you, the developer will sign a deed of assignment (instead of a memorandum of transfer) in your favour, and undertakes to deliver title to you when the strata title is issued. Therefore, the sale and purchase agreement is only complete when strata title is issued to the purchaser. In the normal course of events, an application for strata title takes about 5 years to be approved from the time of application. The developer would be required to submit the application within five (5) years from completion of the development project.

Reselling or Purchasing a property where strata title has not been issued

An owner of property where strata title has not been issued may resell by way of assignment  to another purchaser (known as sub-purchaser). As the housing developer is also a party to the assignment, the developer must  consent to the sub-sale, or re-sell. The developer has the right to request payment of 0.5% of the purchase price (or a maximum of RM500-00) has administrative fee.

Property Checks

The Purchaser's Solicitors will contact the developer to (a) obtain or confirm the master title details before conducting a search (b) check if the strata title is in the process of being issued (c.f. application being processed); and (c) if strata title is not on the process of being issued, then whether they will consent to the transfer of the Property to a new owner / purchaser.

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