MALAYSIA Law and Practice Contributed by: Natalie Ooi and Nicholas Ooi, Ooi & Ooi
2. Sale and Purchase 2.1 Categories of Property Rights
land ownership and dealings through the NLC. The Torrens title system operates on the princi - ple of “title by registration” . The cornerstone features of the Torrens system as applied and enforced in Peninsula Malaysia are as follows. • It ensures that the land registry and the land titles registered accurately reflect all vital details about the land’s registered owner and any interests or encumbrances affecting said land. The NLC does not recognise the English law principle of adverse possession. • The title of the land and all particulars con - tained therein are conclusive of the ownership of said land and any encumbrances affecting it. A lawful and proper transfer of title in Malaysia is effected through the following steps. • Agreements, whether a sale and purchase agreements (SPA), deed of gift or other form of agreement, should comply with the legal requirements under the CA1950. • The execution of transfer documents – once the agreement is signed and the conditions fulfilled, the prescribed memorandum of transfer form under NLC (Form 14A) will be executed by the parties. Form 14A must be stamped according to the Stamp Act 1949. • Lodgement with the Land Office or Registry – Form 14A is then lodged with the relevant State Land Office or State Land Registry for registration. The submission must include the original land title and other relevant docu - ments, and proof of the payment of stamp duty. • Registration and endorsement – the State Land Office or State Land Registry will then process the transfer. If all formalities and
In Malaysia, proprietors of land generally hold their land in perpetuity (freehold) or under a state lease (leasehold). 2.2 Laws Applicable to Transfer of Title The key legislation applicable to conveyancing in Peninsular Malaysia are as follows: • the NLC; • relevant State Land Rules, which supplement the NLC and may impose additional require - ments or procedures specific to the state in which the property is located; • the Stamp Act 1949, relating to stamp duty payable; • the Real Property Gain Tax Act 1976 (RPGT), relating to RPGT payable; • the Contracts Act 1950 (CA1950), for contrac - tual liabilities; • the Local Government Act 1976, in respect of change of ownership for the purposes of assessment; • the Housing Developers (Control and Licens - ing) Act 1966, which applies if purchasing from a licensed developer; • the STA, which applies to the subdivision and transfer of strata properties, including apart - ments and condominiums; • the Pengurusan Danaharta Nasional Berhad Act 1998, which is relevant in conveyancing involving distressed or foreclosed properties; and • the Environmental Quality Act 1974 (EQA), pertaining to industrial lands. 2.3 Effecting Lawful and Proper Transfer of Title As noted in 1.1 Main Sources of Law , Peninsular Malaysia practises the Torrens system governing
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