In the process of buying and selling of a property, usually the lawyer will ask the seller to give a copy of the title deed before the transaction is completed. There is no other reason, than that the title deed is an “identity card” for the property. With the title deed, the lawyer can know the information and nature of the property, or what needs to be paid attention to in the property. Of course, for safety reason, the lawyer will also do a land search of the land at the Land office to get the latest information of the property.
Looking at the title deed, we usually look at three parts. The first, of course, is whether the landlord is the same as the information in the title deed.
The second is that whether the property needs to obtain the State Consent (i.e consent of the state to transfer the property), or it can be transfer directly without the state consent. Perhaps some readers do not understand what the state consent is. Let me explain briefly.
Usually, a property can be divided into a freehold and leasehold. As the name implies, the freehold means that the landlord permanently owns the property, unless he transfers it to another person or is acquired by the government; and the leasehold technically means that the landlord leases the property from the state government for a period of time (usually the lease term is 99 years). Therefore, if it is a leasehold, generally the state government, as the owner of the land (technically), must agree and consent a new buyer to replace the seller as the landlord.
Therefore, the lawyer must clearly state in the sale and purchase agreement (SPA) that the seller must apply to the state government to obtain a consent to perform any transaction (changing of ownership or charge) before the period of the SPA becomes effective. The process of applying for the state government’s consent letter usually takes 1 to 3 months (the processing time of the state land office is different). After getting the state government’s consent, the 3+1 of the transaction periods in the agreement will start to run. If it is a freehold title, it usually can change ownership without obtaining the consent of the state government. Therefore, not every sale and purchase process can be completed within 3 months. If the consent of the state government is required, the time required will be longer, and the entire sale and purchase process may take about 4 to 6 months. However, it must be noted that there are also some freehold land require the consent of the state government to conduct any transaction.
In the title deed of the property that needs consent of the state government for transaction, the “Sekatan-Sekatan Kepetingan” will indicate that the state government must consent before any transaction can be carried out.
Thirdly, we will look at whether the seller charge the land to any bank before. If the land has been charged to the bank, then in the title deed, under the landlord information column, there will be information indicating the borrower’s bank. At the same time, the borrower’s bank will also safe keep title deed to protect the bank’s own interests. In this case, the buyer must use part of the purchase price to help pay off the seller’s loan and redeem the title deed from the borrower’s / seller’s bank. If the land does not have any encumbrances, then the process of the entire SPA may be simpler and easier.
“One more thing to add is that for any transaction in the Land Office, the Land Office must obtain the original title deed before processing it. This is also one of the effective ways to prevent land fraud.”
BY WINSON TAN
Note: This article is for reference only and does not constitute legal advice. Therefore, if readers have any legal questions or needs, they should seek professional legal advice. If the reader suffers any loss by relying on this article, the author will not be held responsible.