MALAYSIA Law and Practice Contributed by: Natalie Ooi and Nicholas Ooi, Ooi & Ooi
Seller’s Warranties Provided Under Statute There are some statutory provisions in the CA1950, the STA and the NLC that may imply warranties regarding the sale of real estate. However, specific warranties about the state of the building or environmental conditions (eg, asbestos) are generally addressed through express contractual representations and warran - ties, rather than statutory obligations. Buyer’s Remedies Against the Seller for Misrepresentation The typical buyer’s remedies for misrepresenta - tion or breach of warranty in Malaysia include: • damages; • rescission of contract; and • specific performance. In practice, the SPA will often outline the specific remedies available to the buyer, including indem - nities and procedures for addressing breaches. Security for the Enforcement of Remedies In commercial real estate transactions in Malay - sia, security for the enforcement of remedies is
requirements are met, the title will be regis - tered in the name of the new proprietor. The land register is updated, and an endorsement is made on the land title to reflect the new ownership. 2.4 Real Estate Due Diligence Typical conveyancing due diligence includes: • land searches on the land title, either con - ducted online or at the respective State Land Office or State Land Registry, to ascertain ownership, express conditions of the title (if any) and any existing encumbrances; • bankruptcy searches if the vendor is an indi - vidual, or winding-up searches if the vendor is a company, which can be conducted online via the Insolvency Department’s website; • asearch on the vendor (if the vendor is a com - pany) can be done online via the Companies Commission of Malaysia’s website; • a valuation report on the land or property (by a registered valuer); and • physical inspection of the real estate. 2.5 Typical Representations and Warranties In Malaysia, common warranties in a typi - cal commercial real estate transaction would include: • title and ownership; • legal compliance;
usually provided through: • escrow arrangements; • bank guarantees; or • indemnities.
• condition of real estate; • no pending litigation; and • leases and tenancies (if applicable).
However, it is not uncommon for buyers to rely heavily on the seller’s representations and war - ranties in the SPA itself rather than seeking third- party security. Survival Period of Representations and Warranties The parties usually agree to a survival period, balancing the seller’s interest in limiting liability
These warranties are negotiable but tend to focus on the fundamental aspects of title, legal compliance and condition of the property.
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