deed of assignment in malay

Memorandum Of Transfer (MOT) And 4 Important Documents In Malaysia

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When it comes to buying that dream home, there are more than a few documents you need to remember.

These legal documents are the official checkpoints on your property purchase journey, and one of the most important you’ll encounter is the Memorandum of Transfer (MOT) or Deed of Assignment (DOA) .

The MOT/DOA is the clap-your-hands-and-laugh-in-delight part of purchasing a property. Sure, you’ve got your fancy Sale and Purchase Agreement (SPA) with all the terms and conditions laid out.

That’s important too, don’t get us wrong. But it’s when the Memorandum of Transfer comes into play that things really get ownership-level exciting.

What Is MOT And DOA?

In Malaysia, a Memorandum of Transfer (MOT) is a document that the buyer signs to transfer ownership from the seller to the buyer.

Signing the MOT means that the Land Title will be transferred from the developer or previous proprietors’ name to yours. Hence, it’s not issued if the property in question doesn’t have its Land Title yet.

In cases where the property to be bought had not received its relevant Land Title, a Deed of Assignment (DOA) form is used to transfer ownership of property, and a further document recording the Developers Consent will also be required.

What Are The Steps In Transfer of Ownership?

Transferring ownership of something as important (and valuable!) as a property requires some crucial legal steps.

So once you’ve identified a realistic piece of real estate which you can afford and it shows good potential for capital gains yield, it’s time to start the legal process.

Here are the 5 key steps in the legal process of buying a house, and the documents that go along with them.

1) Home Loan And Lawyer Up

Searching for the right home loan is the first step towards owning a property, unless you’ve got reallyyy deep pockets, of course! It’s also the perfect point to contract a legal professional to help with the process.

It’s not compulsory for you to hire said professional, but with all the many legal documents to come, it’s probably a pretty good idea to get all the help you can!

2) Letter Of Offer (LO)

You’re at the start of the purchasing process, and you’re keen to put your name down for a property.

The Letter of Offer is a document which sets out your initial desire to purchase, and a seller’s willingness to sell.

It notes things such as the agreed selling price, relevant furnishings, and the date by which the SPA should be signed.

3)  Sale And Purchase Agreement (SPA)

This is it, the legal document we’ve all been waiting for. The SPA is a comprehensive agreement setting out the terms and conditions of a purchase.

This important document sets out conditions such as the date of transfer, conditions of purchase, items included in the sale, as well as other relevant terms.

4) Facility Agreement

It’s time for the Facility Agreement! Don’t worry, this isn’t about setting out your access to the swimming pool and gymnasium.

This is the legal document to officially confirm the home loan agreement that you have signed with your bank.

5) Memorandum Of Transfer / Deed of Assignment

It’s the big one now! Here’s your chance to sign your Memorandum of Transfer  (MOT) , or the less excitingly titled ‘Form 14A’. MOT in Malaysia is the document which legally confirms the actual transfer of ownership.

It’s the legal equivalent of handing you the keys to the front door and saying the property is yours. 

Why Is Having A Lawyer Important When Buying Property?

We mentioned the value of getting a lawyer to help you through this process, and now hopefully you’ve got a good idea of ‘why’.

The lawyer is essentially your champion in ensuring you get the right deal, and that everything is done properly and honestly .

They’re trained to draft up and check through complex legal documents (like the SPA) to ensure that the terms and conditions are fair and balanced. 

That means making sure you’re not signing up to some crazy deal where it turns out you’re only allowed to use the front door of your property every third Tuesday.

Of course, in reality, that kind of extreme example is unlikely to happen, but there are all sorts of complicated legal jargon that are important to cross-check.

A legal professional is also experienced in navigating processes to:

Ensure everything runs smoothly

Making sure things like documents are stamped

Legal requirements are fulfilled within the right time frame

All sorts of other little miscellaneous things you’d never know to check

That also involves searching Land Office registrations to ensure the property you’re actually buying, really does belong to the person selling it.

There’s so much to remember that it’s easy to slip up, thus having someone in-the-know would greatly expedite everything!

What Does Stamp Duty Have To Do With The Memorandum Of Transfer And Deed of Assignment?

When acquiring a property, you can expect plenty of legal documents, plus stamp duty tax on each document to top it off.

The MOT and DOA is no different, and in fact, is one of the heftiest when it comes to stamp duty costs. MOT and DOA stamp duty varies between 1% and 4% of the property sale price. Scroll down to check out the detailed tiers.

What Are The Costs Associated With Each Stage of Buying A Property?

Alongside the major payments of purchasing the property itself, there are actually a number of financial requirements and transactions linked to the various legal steps noted above:

1) Loan Agreement

As if the financial burden of a loan wasn’t “exciting” enough, you also have to pay the legal fees for it!

2) Letter Of Offer

This is usually the point where an earnest deposit comes into play . That’s 2% of the total value of the property, and counts towards the overall 10% down payment.

The earnest deposit is usually non-refundable.

Signing the SPA is when the big money payments begin. At this point, the full 10% down payment will be required. Any earnest deposit already paid will count towards this total.

This will also require payment of the SPA’s legal fees.

As for the stamp duty, the cost is RM10 per copy of SPA and normally you will need 4 copies, which works out to RM40 in total.

4) Instrument of Transfer: MOT / DOA

It makes sense that the Instrument of Transfer document, i.e. MOT or DOA is also the part where the largest stamp duty is owed!

The stamp duty for MOT and DOA is payable upon transferring the deeds to your name.

So, if you’re buying a new property that’s yet to be built or under construction, the stamp duty will comes later. If it’s a completed new or sub-sale property, the stamp duty will comes much quicker.

T hese are the stamp duty charges that will be due.

[PropertyTip] First time homeowners currently benefit from various government exemptions, which you can find out more about on our stamp duty guide . [/PropertyTip]

Stamp Duty and Legal Costs For Purchase Of Property

Now, let’s put that into perspective shall we?

Here’s an example of how much it will cost you in stamp duties and legal fees when purchasing a home. To illustrate, let’s say you’re purchasing a house at RM800,000 with a loan of RM700,000.

Stamp Duty Exemptions In 2023

Ouch, that’s a lot of money for stamp duty alone… good news though! There are stamp duty exemptions in place to help you shave off some of the costs.

Announced during Budget 2023, for first-time homebuyers who purchase a home valued at RM500,000 and below, full stamp duty exemption will apply until the end of 2025.

While residential properties purchased worth between RM500,0001 to RM1 million will get a 75% stamp duty exemption up until 31st December 2023.

How About Closing Costs When Buying A Property?

The fees don’t stop there, there are closing costs too. Closing costs are the necessary fees to be paid by the buyer during the final steps of the property transaction. In Malaysia, these are mostly paid by the buyer.

Stamp duties aside, some closing costs that you may incur are:

1)  Real Property Gains Tax (RPGT)

RPGT is a tax imposed on gains derived from disposal of real property. In simplest terms, it’s a tax on your net profit when you sell a property . If you’re the seller, this cost may be applicable to you.

RPGT is taxed on a tiered basis between 5% – 30% depending on various factors such as how long you’ve owned the property for before selling it off. Just as with stamp duty however, there are RPGT exemptions too!

2)  Legal fee s

Legal fees are the fees charged by the lawyer to draft the Letter of Offer as well as the Sale and Purchase Agreement (SPA) as well as other legal matters associated with the sale. In Malaysia, the legal fees are typically split between seller and buyer and are charged on a tiered basis.

3)  Valuation fee

The valuation fee is paid to a bank-appointed valuation expert to estimate how much money the property is likely to be worth . This fee typically costs about 0.3% of the final property value.

4)  Property agent commission

If you’ve enlisted the help of an agent to assist you in the sale or purchase of a property, it will typically cost you a commission fee. This fee is stipulated by the agent, but regulated at a maximum of 3% of the property’s sale price.

5)  Mortgage insurance

Your mortgage insurance will either come in the form of Mortgage Level Term Assurance (MLTA) or Mortgage Reducing Term Assurance (MRTA), with the MRTA generally ten times more affordable than the MLTA.

6) Home renovation and refurbishments

Aside from the costs associated with the legal documents involved, let’s not forget about the renovation costs! Before closing the deal, you’d want to settle any pressing renovations such as leaks or tiling.

What Does A Transfer Of Love In Property Mean? 

A transfer of love is (maybe) the sweetest-sounding property transaction you’ll ever hear of. What it relates to, is use of an MOT to transfer property between family members.

That means situations like husband to wife or parent to child. I n these cases, the stamp duty for the MOT is waived either fully or partially.

You receive 100% exemption in the case of wife to husband and vice versa, and 50% exemption in the case of parent to child or vice versa.

Relevant Guides:

The Essential Guide To Vacant Possession Of Your New Home

Spa, stamp duty malaysia, and legal fees for property purchase, here’s all you need to know about joint home loans.

Disclaimer:  Information provided on this website is general in nature and does not constitute legal advice. PropertyGuru will endeavour to update the website as needed. However, information can change without notice and we do not guarantee the accuracy of information on the website, including information provided by third parties, at any particular time. Whilst every effort has been made to ensure that the information provided is accurate, individuals must not rely on this information to make a legal decision. Before making any decision, we recommend you consult a legal professional to take into account your particular situation and individual needs. PropertyGuru does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this website. Except insofar as any liability under statute cannot be excluded, PropertyGuru, its employees do not accept any liability for any error or omission on this web site or for any resulting loss or damage suffered by the recipient or any other person.

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Apakah yang Dimaksudkan dengan Deed of Assignment

• Agricultural Land
• Commercial land
• Condominium
• Land/ Bungalow Lot
• Service Suite
• Bandar Baru Bangi
• Bandar Baru Nilai
• Bandar Baru Salak Tinggi
• Bandar Bukit Mahkota
• Bandar Kinrara
• Bandar Saujana Putra
• Bandar Seri Putra
• Bandar Sri Permaisuri
• Bandar Tun Razak
• Batang Kali
• Damansara Perdana
• Desa Petaling
• Hulu Langat
• Kota Kemuning
• Kota Warisan
• Kuala Lumpur
• Kuala Selangor
• Nilai Impian
• Petaling Jaya
• Port Dickson
• Puncak Alam
• Puncak Jalil
• Putra Nilai
• Seri Kembangan
• Subang Jaya
• Sungai Besi
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HOT AREA SELANGOR & KL Ampang , Balakong , Bandar Baru Bangi , Bandar Baru Salak Tinggi , Bandar Bukit Mahkota , Bandar Seri Putra , Bangi , Banting , Cheras , Cyberjaya , Dengkil , Gombak , Kajang , Kota Warisan , Kuala Lumpur , Kuala Selangor , Petaling Jaya , Puchong , Puncak Alam , Putrajaya , Rawang , Semenyih , Sepang , Serdang , Seri Kembangan , Setapak , Shah Alam , NEGERI SEMBILAN Nilai , Nilai Impian , Port Dickson , Putra Nilai , Senawang , Seremban , October 6, 2015  |   One Comment Deed of Assignment atau dalam bahasa melayu diterjemahkan sebagai Surat Ikatan Tugas adalah dokumen perjanjian yang membuktikan pemindahan hak milik oleh pemaju kepada pembeli. Ia digunakan apabila hartanah masih lagi dibawah geran induk atau master title. Disebabkan hartanah terbabit masih berstatus ‘Geran Induk’, pihak pemaju akan memenyediakan perjanjian yang berasingan yang dipanggi Deed of Assignment atau DOA. Pada asasnya ianya bertujuan untuk membuktikan bahawa pihak pemaju adalah merupakan pemilik hartanah dan bersetuju dan berjanji untuk membenarkan anda sebagai pemilik sementara untuk mendiami atau menggunakan hartanah tersebut dan anda tertaktuk kepada terma dan syarat yang terkandung dalam Deed of Assignment yang telah disetemkan. Dengan adanya perjanjian Deed of Assignment ini, pihak pemaju juga berjanji untuk mengeluarkan Geran Strata (Strata Title) atau Geran Individu (Individual Title). Sebagai pemilik baru yang tidak mempunyai geran, anda tidak boleh memindah, mencagar, atau menjual hartanah anda melainkan mendapat kebenaran untuk menjualnya dari pihak pemaju. Apakah perbezaan Deed of Assignment dengan Memorandum of Transfer ? Perbezaannya adalah Deed of Assignment adalah merupakan perjanjian yang dikeluarkan oleh pemaju jika hartanah masih dibawah geran induk manakala Memorandum of Transfer pula adalah merupakan surat perjanjian yang disediakan oleh pemaju atau pemilik hartanah jika hartanah tersebut telah mempunyai Geran Strata atau Geran Individu. Tajuk Memorandum of Transfer akan dikupas dengan lebih lanjut pada arktikel yang akan datang. Semoga bermanfaat. Tweet !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); Print KAWASAN JAJAHAN

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Selangor, Kuala Lumpur and Johor Law Firm - Deed of receipt and reassignment in Malaysia by the lawyer

Deed of receipt and reassignment in malaysia.

Deed of Receipt and Reassignment is to be treated as the same process as Discharge of Charge except that this will not include the redemption of Original Title from the Bank. This is because when the Purchaser/Borrower bought the property, the Individual Title or Strata Title is yet to be issued so they will use Deed of Assignment by way of security in order to protect the beneficial interest of the Bank for the assistance given to the Purchaser/Borrower in purchasing the property. Normally, the Purchaser/Borrower will signed the Deed of Assignment documents together with Power of Attorney upon receiving the loan from the bank. These documents worked as a protection for the Bank to sign the Perfection of Charge documents on behalf of the Purchaser/Borrower (if the Purchaser/Borrower is missing or do not have money to pay the fees) once the Individual or Strata Title has been issued. Therefore, once the Purchaser/Borrower already signed this Deed of Receipt and Reassignment documents, it can be a proof that the Purchaser/Borrower already settled the repayment of the housing loan with the bank and the Power of Attorney given to the Bank earlier will also be revoked. Most importantly, once the Individual Title or Strata Title has been issued later, the Purchaser/Borrower must prove to the Perfection of Transfer’s solicitor that the loan is fully settled by showing this Deed of Receipt and Reassignment documents and Perfection of Charge should not be done anymore. As a result, upon the registration of the Purchaser’s name on the Title by Perfection of Transfer, the Purchaser/Borrower can collect the Original Title for their safekeeping and don’t have to forward the same to the Bank anymore. • Basic process for Deed of Receipt and Reassignment 1. Deed of Receipt and Reassignment documents signed by Purchaser/Borrower 2. Deed of Receipt and Reassignment signed by Bank 3. Stamp relevant documents at LHDN 4. Revoke Power of Attorney at High Court 5. Purchaser/Borrower can collect all Original Documents for their safekeeping • Documents needed for Deed of Receipt and Reassignment:- 1. Identity card of Purchaser/Borrower 2. Prove of settlement of the housing loan from the Bank (if any) 3. Other relevant documents • What type of property under Deed of Receipt and Reassignment - master title property Disclaimer All data and information provided on this site are for informational purposes only. HS LIM & CO makes no representations as to the accuracy, correctness, completeness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis. If you are in any doubt, please contact us for further information.

What is Perfection of Transfer?

In summary, it is the process transferring ownership of property from the vendor to the purchaser by registering the property title in the name of the purchaser.

There are instances where the individual title is not yet issued at the time of purchasing the property and hence cannot be transferred into the name of the new owner. An example of this is when purchasing a unit in a new development from a property developer where the developer who owns the property holds the entire property under a master title.

In such cases, the entire plot of land where the development project is built will need to be subdivided into individual parcels where a strata title will be issued for each parcel. This allows purchasers to own individual units in the development project which was previously held under one master title by the developer.

What is strata title?

Strata title (also referred to as subsidiary title) is a title that is issued as a result of subdivision of a building. Where a building has been divided into multiple individual parcels, the strata title is the evidence of ownership of such parcels by the purchasers.

Why do I need to attend to the perfection of transfer?

When buying a unit in a new development from a developer where strata title is not yet issued, the sale is done by a Sale and Purchase Agreement (SPA) and with an undertaking from the developer to apply for strata title and subsequently transfer the strata title into the name of the purchaser.

By virtue of the SPA, the Purchaser acquires an in personam right meaning that the Purchaser acquires the right to the property against the vendor personally but not against the whole world.

This is so because in Malaysia, we follow what is known as the Torrens System where only the registration of ownership in title at the land office constitutes conclusive evidence of ownership of property. Thus, where title is not yet issued, registration of the name of the purchaser on the title cannot be performed.

If the purchaser subsequently sells the property before strata title is issued, the Deed of Assignment acts as evidence that the right has been assigned to the new owner.

Back to the question of “what is perfection of transfer?” – it is simply the act of completing (or perfecting) the transfer of the title into the name of the purchaser as the new owner when the strata title is issued.

The perfection of transfer grants the new owner an indefeasible title that is registered in his name at the land office. This tells the whole world that he is now the registered legal and beneficial owner of the property as per the National Land Code. The new title will also reflect any encumbrances or restrictions on the property, such as charges that were registered prior to the transfer.

Brief description of the perfection of transfer process

1. issuance of the strata title.

When strata title is issued, you will be duly notified of this by your developer or alternatively, you may be notified of this by the lawyer who attended to your SPA.

This marks the beginning of the perfection of transfer process. At this stage, you may appoint a lawyer to attend to the perfection of transfer – you may appoint the same lawyer who attended to your SPA or you may appoint any other lawyer of your choice.

Your developer will require a Letter of Authorisation notifying them that you have appointed a lawyer to act for you. The Letter of Authorisation will allow your lawyers to liaise with the developer and obtain the necessary documents.

*if there is a restriction in interest (a.k.a. “sekatan kepentingan” in BM) on the title, the consent of the State Authority will be needed before any transfer or charge can be registered. Usually, the developer is responsible for applying for consent and will require the purchaser to assist with filling up the application form and providing the necessary documents. The application for consent may take up to 3 months depending on the requirements of the land office.

2. Preparation and execution of the Memorandum of Transfer (MOT)

The MOT is the document that sets out the details of the transfer. Your lawyer will assist with preparing the MOT in the required format stipulated by the National Land Code.  The MOT is then signed by both the transferee (purchaser) and the transferor (developer).

3: Adjudication of the MOT

Before the MOT can be registered, it must be adjudicated and stamped at the Inland Revenue Board (IRB/LHDN). Adjudication is the process where the amount of ad valorem stamp duty payable is ascertained to fulfil the requirements of the Stamp Act 1949. Stamp duty that is calculated based on the value of the property is known as stamp duty ad valorem . When the adjudication is complete, the Inland Revenue Board Malaysia (IRBM) will issue a Notice of Assessment requiring stamp duty to be paid.

4: Payment of stamp duty and stamping of MOT:

Upon receiving the Notice of Assessment, payment of the stamp duty must be made within 30 days from the date of the Notice failing which a penalty will be charged. After payment is made, the MOT will be stamped at the stamp office to indicate that the stamp duty has been paid. If stamp duty ad valorem has already been paid on the Deed of Assignment, you will not need to pay for this again.

5: Registration of the MOT  

Registration is done by presenting the MOT at the land office for registration. The land office will review the transfer documents to ensure that it complies with legal requirements and the appropriate stamp duty has been paid. Once the transfer has been registered, the land office will issue a new title in the name of the new owner.

Where the purchaser has taken a loan to pay for the property, the MOT will be forwarded to the Bank’s solicitors for perfection of charge.

The perfection of transfer may be completed within 3 – 6 months. Where the State Authority’s Consent is required, this process may take longer.

What are the documents required for the perfection of transfer?

• Copy of the purchaser’s NRIC or passport
• Copy of the strata title (obtained from the developer)
• Copy of latest quit rent and assessment receipt
• Copy of latest and TNB bill for the property
• Copy of latest receipt for maintenance fees
• Copy of Deed of Assignment (if applicable)
• Copy of SPA
• Other relevant documents as may be requested for by your lawyer or the developer

What is perfection of charge?

Perfection of charge is required when the purchaser has used a loan from the bank to finance the purchase of the property. It is the process of registering the name of your lending bank on the strata title as the chargee of the property. This process is done along with the perfection of transfer.

When taking out a loan to purchase the property, the lending bank will require a charge to be registered on the title in its name as security for the loan. This will give the bank the right to sell the property should the purchaser default on the loan repayment.

The bank is responsible for the perfection of charge and will appoint its own lawyers to attend to the matter. As such, the purchaser will forward the MOT to the bank’s lawyer for registration of the charge.

The perfection of transfer process involves transferring ownership from the developer to yourself whereas the perfection of charge involves transferring that ownership to the bank who paid for the property.

Brief description of the perfection of charge process

The lawyer will prepare the charge document (Form 16A) together with Annexure which will be signed by both the purchaser and the bank. These documents are then submitted to IRB/LHDN for stamping and finally it is presented at the land office for registration. When the new strata title is issued, the original document of title is to be forwarded to the bank for safe keeping.

Do I need to attend to the perfection of transfer and perfection of charge?

Some of the complications may arise should you delay or refuse to attend to the matter:

• You may face some difficulty in selling your property as the developer will have to transfer the strata title to the new owner. The purchaser may also face some difficulty obtaining a housing loan where the property they intent to finance does not have the strata title in the name of the vendor.
• This may delay the formation of the management corporation for stratified properties such as apartments and condominiums. You will not have a right to attend of vote at the annual general meeting of the management corporation if your name is not registered in the strata title.
• Possible issues in relation to inheritance/succession – your next of kin may deal with a lengthy process involving the developers for the transfer of title.
• The developer may impose a fee for storage of the strata title

How much stamp duty do I need to pay for perfection of transfer?

If the property was purchased from an individual owner under subsale, stamp duty ad valorem would have been paid on the Deed of Assignment. As such, no further stamp duty needs to be paid on the transfer. Stamp duty only needs to be paid once on a purchase and transfer.

If the property was purchased directly from the developer, stamp duty ad valorem may be payable on the transfer and the amount payable is prescribed by the Stamp Act 1949. Stamp duty is calculated based on the sale price of the property as stated in the SPA.

From time to time there may be certain stamp duty exemptions available to purchasers for medium and low cost properties. First-time home buyers may want to look out for such exemptions which will help in saving money.

What are the fees involved for perfection of transfer?

Your lawyer’s professional fees for the perfection of transfer are provided under the Solicitors Remuneration Order (SRO). The applicable legal fees for transfer are prescribed by Schedule 1 of the the SRO:

As per the SRO, the applicable fee shall be 25% of the scale fee above if the solicitors attending to the perfection of transfer are the same solicitors that previously attended to the sale and purchase agreement / loan documentation. If new solicitors are appointed to attend to the perfection of transfer, the applicable fee shall be 50% of the scale fee above.

You may refer below for an estimate calculation of the fees involved for perfection of transfer:

In conclusion, the process of perfection of transfer can be a rather daunting and lengthy process therefore it is always advisable to engage a professional to attend to it as this ensures that the transfer is properly completed your rights and interests are protected.

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Stamp Duty Imposed For Transfer Of Properties In Malaysia

Stamp duty is one of the unavoidable costs in property purchase in Malaysia.

Under the Stamp Act, stamp duty is tax payable on the written documents during the sale and/or transfer of a real property. At least two documents will attract stamp duty in a conveyancing transaction:

i. the Sale and Purchase Agreement; and ii. the Memorandum of Transfer (if the individual title/strata title of the Property has been issued) or the Deed of Assignment by way of transfer (if the strata title of the Property has yet to be issued).

In a conveyancing transaction, the Purchaser has to pay ad-valorem stamp duty on the written instrument being the conveyance of sale, ie. the Memorandum of Transfer or the Deed of Assignment by way of Transfer and a nominal stamp duty at on every copy of the Sale and Purchase Agreement.

The ad-valorem stamp duty is variable cost payable on the Memorandum of Transfer or the Deed of Assignment by way of Transfer will be calculated based on either the purchase price of the Property or the market value of the Property, whichever is higher, whereas the nominal stamp duty are charged at a set price of RM10.00 on every copy of the document.

In a conveyancing transaction, the Memorandum of Transfer or the Deed of Assignment by way of Transfer has to be submitted to the Collector of Stamp Duty for assessment of such ad-valorem stamp duty payable. Take note that the amount of purchase price stated in the Memorandum of Transfer or the Deed of Assignment by way of Transfer by the parties is not binding on the Collector of Stamp Duty and they have discretion to call upon a valuation expert to obtain the market value of the Property.

From 1st July 2019 onwards, the calculation of the ad-valorem stamp duty of transfer pursuant to normal sub-sale Sale and Purchase Agreement is as follows:-

In cases where the transfer is done pursuant to Sale and Purchase Agreement entered into with a developer, two situations can arise:-

i. When the individual title is available at the time of entering into the Sale and Purchase Agreement, the stamp duty assessed will be based on the purchase price stated in the Memorandum of Transfer and Sale and Purchase Agreement OR the market value of the Property;

ii. When the individual title is not issued during the signing the Sale and Purchase Agreement, the Sale and Purchase Agreement and the Deed of Assignment will carry only the nominal stamp duty of RM10.00 on every copy of the documents. When the individual title is issued subsequently, the stamp duty assessed will be based on the market value of the Property on the date of the Sale and Purchase Agreement entered into with the developer and not the date of the Memorandum of Transfer which is drawn up substantially later.

In circumstances where the transfer is done pursuant to a Deed of Assignment which has already been duly stamped (because the Property was bought when the individual title was not issued), then the stamp duty payable on the transfer is a nominal sum of RM10.00 pursuant to section 11 of the Stamp Act subject to production of the original Deed of Assignment which has already been stamped. Upon issuance of individual title of the Property, an application has to be made for endorsement on the Memorandum of Transfer to evidence that an ad-valorem stamp duty has been paid on the Deed of Assignment prior to the issuance of the individual title.

Further, transfer of property pursuant to grant of probate or letters of administrators will carry a nominal duty of RM10.00.

Many transfers are made between families or close relatives for love and affection without any Sale and Purchase Agreement. Take note that the ad-valorem stamp duty for some transfers for love and affection between families can be exempted either fully or partially.

Get free quotation (for legal fees and stamp duty applicable) by filling in the form below and our property and conveyancing lawyers will send you the quotation in less than 2 working hours via WhatsApp/SMS .

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101 on Assignment and Novation Agreements

By aqila zulaiqha zulkifli ~ 6 january 2024.

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Aqila Zulaiqha Zulkifli

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As a general rule, parties to an agreement must perform their respective obligations set out therein. However, where such performance becomes unfeasible or impossible to perform, parties may consider novating or altering the agreement. The present article, shall focus on novation of the said agreement.

A novation of an agreement is summarized as when an agreement is made between two contracting parties to allow for the substitution of a new party for an existing one.

There could be two (2) classes of novation [1] , that is:

• where a new contract is substituted for an old one between the same parties; and
• where a new contract is substituted for an old one between different parties.

Novation is provided for in Section 63 Contracts Act 1950 as follows:

“Section 63 Effect of novation, rescission and alteration of contract

If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed.

Several examples are reproduced below:

• A owes money to B under a contract. It is agreed between A, B and C that B shall henceforth accept C as his debtor, instead of A. The old debt of A to B is at an end, and a new debt from C to B has been contracted.
• A owes B RM10,000. A enters into an arrangement with B, and gives B a mortgage of his (A's) estate for RM5,000 in place of the debt of RM10,000. This is a new contract and extinguishes the old.

Novation requires the consent of all parties as a new contract is substituted for an existing contract and a former party is discharged. Whether there was is no written consent, to novation may, however, be inferred from conduct and not only by way of express words [2] .

Unlike assignments (See our article on Assignment of Debt in this link ), a novation is not to assign or transfer a right or liability. Rather, it is to extinguish the original contract and replace it with another [3] .

The effect of it is that the original contract between parties need not be performed. It is a practical way to rescue a transaction amicably between parties and to avoid a situation where a party to the agreement is stranded without recourse or is forced to resort to litigation to recoup it’s losses.

[1] See the High Court case of Malaysian International Merchant Bankers Bhd. V. Datuk Mohd. Salleh & Anor. [1988] 1 CLJ Rep 786. [2] See the High Court case of Malaysian International Merchant Bankers Bhd. V. Datuk Mohd. Salleh & Anor. [1988] 1 CLJ Rep 786 . [3] See the High Court case of H & R Johnson Tiles & Anor v H & R Johnson (M) Bhd [1998] 4 MLJ 13

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Selangor, Kuala Lumpur and Johor Law Firm - Deed of receipt and reassignment in Malaysia by the lawyer

Deed of receipt and reassignment in malaysia.

Deed of Receipt and Reassignment is to be treated as the same process as Discharge of Charge except that this will not include the redemption of Original Title from the Bank. This is because when the Purchaser/Borrower bought the property, the Individual Title or Strata Title is yet to be issued so they will use Deed of Assignment by way of security in order to protect the beneficial interest of the Bank for the assistance given to the Purchaser/Borrower in purchasing the property. Normally, the Purchaser/Borrower will signed the Deed of Assignment documents together with Power of Attorney upon receiving the loan from the bank. These documents worked as a protection for the Bank to sign the Perfection of Charge documents on behalf of the Purchaser/Borrower (if the Purchaser/Borrower is missing or do not have money to pay the fees) once the Individual or Strata Title has been issued. Therefore, once the Purchaser/Borrower already signed this Deed of Receipt and Reassignment documents, it can be a proof that the Purchaser/Borrower already settled the repayment of the housing loan with the bank and the Power of Attorney given to the Bank earlier will also be revoked. Most importantly, once the Individual Title or Strata Title has been issued later, the Purchaser/Borrower must prove to the Perfection of Transfer’s solicitor that the loan is fully settled by showing this Deed of Receipt and Reassignment documents and Perfection of Charge should not be done anymore. As a result, upon the registration of the Purchaser’s name on the Title by Perfection of Transfer, the Purchaser/Borrower can collect the Original Title for their safekeeping and don’t have to forward the same to the Bank anymore. • Basic process for Deed of Receipt and Reassignment 1. Deed of Receipt and Reassignment documents signed by Purchaser/Borrower 2. Deed of Receipt and Reassignment signed by Bank 3. Stamp relevant documents at LHDN 4. Revoke Power of Attorney at High Court 5. Purchaser/Borrower can collect all Original Documents for their safekeeping • Documents needed for Deed of Receipt and Reassignment:- 1. Identity card of Purchaser/Borrower 2. Prove of settlement of the housing loan from the Bank (if any) 3. Other relevant documents • What type of property under discharge of charge - master title property Disclaimer All data and information provided on this site are for informational purposes only. HS LIM & CO makes no representations as to the accuracy, correctness, completeness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis. If you are in any doubt, please contact us for further information.