Purchasing a Property – What You Need To Know – Legal Fees

Buying a house could be the largest single investment you will ever make, but one may be entering into it with little or no experience on real estate or mortgage finance.

Unfortunately, it is not as simple as obtain a mortgage, grab the keys and bish bash bosh, you’re in. Purchasing a property is almost guaranteed to cost more than you think.

The main inherent costs are legal fees, mortgage arrangement fees, stamp duty and valuation fees. Make sure you keep some cash aside from your deposit to cover them.

There are instances when ill informed purchasers failed to allocate funds for the completion of property transactions, thus resulting in forfeiture of deposits paid. The importance of proper financial planning is paramount to avoid such losses.

Our legal advisor, Mr Marcus Hwang, Partner in Kwong & Hwang (Advocates & Solicitors) has been kind enough to provide us with the following schedule of legal fees involved in property dealings :-

SALE AND TRANSFER

Consideration or Adjudicated Value Scale of Fees
For the first RM150,000 1.0% (subject to a minimum fee of RM300)
For the next RM850,000 0.7%
For the next RM2,000,000 0.6%
For the next RM2,000,000 0.5%
For the next RM2,500,000 0.4%
Where the consideration or Negotiable on the excess (but shall
adjudicated value is in excess not exceed 0.4% of such excess)
of RM7,500,000

LEASE AND TENANCY

Lease
Monthly Rent Scale of Fees
For the first RM10,000 50% (subject to a minimum fee of RM600)
For the next RM90,000 20%
Where the rent is in excess of Negotiable on the excess (but shall
RM100,000 not exceed 20% of such excess)
Tenancy
Monthly Rent Scale of Fees
For the first RM10,000 25% (subject to a minimum fee of RM300)
For the next RM90,000 10%
Where the rent is in excess of Negotiable on the excess (but shall
RM100,000 not exceed 10% of such excess)

CHARGES, DEBENTURES AND OTHER SECURITY OR FINANCING DOCUMENTS

Amount secured or financed Scale of Fees
For the first RM150,000 1.0% (subject to a minimum fee of RM300)
For the next RM850,000 0.7%
For the next RM2,000,000 0.6%
For the next RM2,000,000 0.5%
For the next RM2,500,000 0.4%
Where the amount secured or Negotiable on the excess (but shall
financed is in excess of RM7,500,000 not exceed 0.4% of such excess)
For the principal instrument Full scale fee
For each subsidiary instrument 10% of scale fee (subject to a
within the meaning of subsection minimum fee of RM200 and a
4(3) of the Stamp Act 1949 [Act 398] maximum fee of RM1,000)

 

DISCHARGE OF CHARGE AND DEED OF REASSIGNMENT

Discharge of Charge
First title RM300
Each additional title in the same instrument RM50
Deed of Reassignment
First title RM300
Each additional title in the same instrument RM50
If the Deed of Reassignment includes a Revocation of Power of Attorney, an additional
fee of RM100 shall be payable to the solicitor.

PREPARING, FILING OR WITNESSING MISCELLANEOUS DOCUMENTS

For witnessing execution of a document RM50 for first and RM10 for each
subsequent copy
For witnessing execution of a document, RM100 for first and RM10 for each
and giving an attestation certificate subsequent copy
Forms under section 108-113, of the RM300 per set
Companies Act 1965 [Act 125]
Real Property Gains Tax form 1 (CKHT 1) RM300 per form
Real Property Gains Tax form 2 (CKHT 2) RM200 per form
Application to State Authority/Statutory Body for consent to transfer/lease/charge :-
for properties where the consideration RM200 per application
or the loan sum, as the case may be,
is RM45,000 or below
for properties where the consideration RM300 per application
or the loan sum, as the case may be,
is in excess of RM45,000
Filing of any other form with an RM100 per form
appropriate Authority
Entry of caveat pursuant to an option RM200 for first title and RM50 for
to purchase, sale and purchase each subsequent title
agreement or loan transaction
Withdrawal of caveat RM150 for first title and RM50 for
each subsequent title

Click here to download the full Solicitor’s Remuneration Order 2005

Buying a house is not only a huge financial decision, but likely one that will affect the day-to-day lives of you and your family for years to come. If you ever feel that emotion is taking over, or that the process is moving too fast for you to understand, then stop everything. Take the time to make a well-reasoned decision, and you’ll find buying a house to be a much more enjoyable and successful process.

Kwong & Hwang (Advocates & Solicitors) are legal practitioners with more than 16 years of experience in conveyancing and law of property in Malaysia. For any enquiries, please contact them via email –  mh@kh.my

TwinHomes International are promoters of the Malaysia My 2nd Home (MM2H) Programme. We are licensed MM2H Visa Agency under the purview of Ministry of Tourism Malaysia. TwinHomes International have been providing support and information to foreigners intending to make Malaysia the ideal second country to live in. We pride ourselves as the most comprehensive one stop centre for all our clients’ migration needs, simply by creating synergies with the widest business network in and around the country.

Settle down to the most sustainable lifestyle in a second country and benefit from the best of both worlds!mm2h@twin-homes.com

2 thoughts on “Purchasing a Property – What You Need To Know – Legal Fees

  1. Some property developers offer to pay first-time buyers’ legal fees as an incentive to buy a property from them. I am not sure how to translate this into French. Does it only cover what we call “frais de notaire”? Thank you for your help!

    1. I believe it is known as Scale Fees in Malaysia. What we have above is the published scale fee applicable in Peninsular Malaysia.

      To answer your question, there are no requirements for the Developer to pay any legal costs on behalf of Purchasers. Therefore, it is best to check with the Developer what is covered under their incentive scheme and what other legal costs is required, but not covered by that particular scheme.

      However you must bear in mind that the lawyer appointed and paid for by the Developer is actually acting for the Developer and not the Purchaser. He/She is merely witnessing the Purchaser’s signature and is not legally accountable to the Purchaser.

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