LAND LAW

Overview

Although the main sector that contributes to economy growth in Malaysia is the service sector, however manufacturing and agriculture sectors contributed substantially to our country Gross Domestic Product (GDP). Both sectors required manpower and large amounts of land to operate.

Thus, land law in Malaysia has gathered huge amount of attention. The applicable law governing land dealings is National Land Code Act 1956 which has been amended in year 2016.

The major issues that may arise are registrations, disposals and dealings which includes transfer of land etc. Of all the parties, banks, property agents and law firms will liaise with government registries to ensure all transactions are done properly.

Common scenarios faced by You

The question often asked is when a purchaser buys a property from a seller, he is subject to several types of fees which amounts to a huge bill which is reflected in the lawyer’s bill. On top of legal fees, they have to pay for disbursements.

When a person rents a property to the others, the contract is embodied in a tenancy agreement. It is signed by both parties and then sent to the land office for “stamping”. When it is conducted in a law firm, usually a lawyer will seal and sign on it. The question asked is whether the stamping procedure and chop by the lawyer is necessary?

Solutions for You

In a standard sales and purchase transaction, a law firm bill is usually divided into 2 parts; one for the sales and purchase transaction and another for the loan transaction (if there is). Under each part, it is further divided into the following:

  1. Legal fee: This is the fee charged by the law firm for their professional services in rendering the task. This scale of fees have been fixed by the Bar Council. Depending on the purchase price, the amount of legal fees have been fixed, subject to discount allowable as Bar Council had introduced a ruling in year 2016 that allows discount.
  1. Disbursement: these comprises of stamp duty (a fee charged by the government), travelling charges, photocopying expenses, document fees and miscellaneous charges. Bear in mind that the law firm did not gain from the disbursement as it is an expense borne by them first for their clients.

Under National Land Code Act, there is no requirement for a tenancy agreement to be stamped. Tenancy to mean tenancy period not more than 3 years. If more than 3 years, it is called as lease and the discussion here wont apply. The purpose of stamping is to make sure the agreement to be admissible in court contentious issues arises between the parties regarding the agreement. As for the seal and signature, this is neither a stipulation under the law. However, it is advisable as when there arises dispute between the parties, the lawyer witnessing can attest to the signatures of both parties.