MALAYSIA Law and Practice Contributed by: Natalie Ooi and Nicholas Ooi, Ooi & Ooi
Legal Documentation and Procedures Please see 2.3 Effecting Lawful and Proper Transfer of Title and 2.10 Taxes Applicable to a Transaction . Compliance with Land Laws and Regulations Please see 2.2 Laws Applicable to Transfer of Title , 2.3 Effecting Lawful Transfer of Title , 2.4 Real Estate Due Diligence and 2.5 Typical Rep- resentations and Warranties . Financial Considerations Financial aspects such as financing options and Costs associated with property transactions should be considered – eg, legal fees, stamp duty and valuation fees. Engaging with legal professionals experienced in Malaysian real estate law is highly recommend - ed to navigate these complexities effectively. 2.7 Soil Pollution or Environmental Contamination Generally speaking, specific laws concerning pollution or contamination impose strict liability upon the proprietor of any land. If the proprietor is prosecuted, the burden of proof of the cause of such pollution generally lies with the proprie - tor. RPGT should be considered. Legal Fees and Other Costs Under Malaysian environmental law, the buyer may be held liable for pollution or contamina - tion even if they did not cause it, particularly in cases where: • the contamination is present at the time of the transaction; or
and the buyer’s need for a reasonable timeframe to identify potential issues. Cap on Seller’s Liability for Breach of Representations and Warranties It is customary for the seller’s liability to be capped in commercial real estate transactions in Malaysia. The cap is often negotiated. Use of Representation and Warranty Insurance Representation and warranty insurance is increasingly being used in larger commercial real estate transactions in Malaysia, particularly for international buyers and sellers, but it remains rare in more typical domestic transactions. 2.6 Important Areas of Law for Investors Investors should focus on the following key areas of law. Eligibility and Restrictions for Foreign Investors Foreigners are permitted to purchase property in Malaysia, although the following restrictions apply. • Minimum purchase price – foreign investors are generally required to purchase properties valued at MYR1 million or higher. • Types of properties – foreigners are typically restricted from acquiring properties that are classified as low or medium-cost housing, Malay reserved land, or agricultural land unless converted for other uses. • State authority approval – prior approval from the relevant state authority is mandatory for foreign property acquisitions.
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