Hassles in buying Malaysian property

[Regulators]

Opening a bank account in Malaysia for the purposes of property buying can be a nightmare especially when a person does not have a work permit or some kind of entry visa. Taking up a loan is an even greater hassle if you are a foreigner. I was wondering if anyone here has bought a Malaysian property without loan n what is the safest way to move the cash around? being a cowboy country, it is dangerous to hand the large sum of money to a small law firm or property agent, so I reckon it may be best to engage the most reputable law firm around to do the conveyancing. also where is the best place to change a large sum of sgd to rm for the best rate if buying Malaysian property in cash? anyone care to share that experience?

[blackjack21trader]

Opening a bank account in Malaysia for the purposes of property buying can be a nightmare especially when a person does not have a work permit or some kind of entry visa. Taking up a loan is an even greater hassle if you are a foreigner. I was wondering if anyone here has bought a Malaysian property without loan n what is the safest way to move the cash around? being a cowboy country, it is dangerous to hand the large sum of money to a small law firm or property agent, so I reckon it may be best to engage the most reputable law firm around to do the conveyancing. also where is the best place to change a large sum of sgd to rm for the best rate if buying Malaysian property in cash? anyone care to share that experience?

why dun u try asking the managers at the local MayBank branch, many of the management are Malaysian I believe.

:)

[blackjack21trader]

why dun u try asking the managers at the local MayBank branch, many of the management are Malaysian I believe.

:)

they are also very helpful. in fact they are usually the first to approve my loans and want my business unlike some AH TAO Bank.

WOAHHHEHEHHEHEH

[Regulators]

these guys don't know anything, I tried talking to them until my blood pressure go up. Also few people buy paying cash so hard to find people to advise.
why dun u try asking the managers at the local MayBank branch, many of the management are Malaysian I believe.

:)

[Regulators]

in fact I find the Malaysian banking system deterring more than encouraging foreign investors.

[ESTUARY GUNDU]

these guys don't know anything, I tried talking to them until my blood pressure go up. Also few people buy paying cash so hard to find people to advise.
worst still..they don't know but "insist" or pretend to know n start talking as if they are sooooo...knowledgeable:banghead: sometimes just wonder how the bank select these so call "Professional"...

[DC33_2008]

Try talking to the premier or private banking group in the bank.
these guys don't know anything, I tried talking to them until my blood pressure go up. Also few people buy paying cash so hard to find people to advise.

[leesg123]

Opening a bank account in Malaysia for the purposes of property buying can be a nightmare especially when a person does not have a work permit or some kind of entry visa. Taking up a loan is an even greater hassle if you are a foreigner. I was wondering if anyone here has bought a Malaysian property without loan n what is the safest way to move the cash around? being a cowboy country, it is dangerous to hand the large sum of money to a small law firm or property agent, so I reckon it may be best to engage the most reputable law firm around to do the conveyancing. also where is the best place to change a large sum of sgd to rm for the best rate if buying Malaysian property in cash? anyone care to share that experience?
My experience totally different. I just go to causeway, pop in their cimb bank branch and open a prime account that comes with cheque facility. Bank loan also no problem.

[leesg123]

in fact I find the Malaysian banking system deterring more than encouraging foreign investors.
One thing to note is that it is difficult to open a chequeing acct as it require introducer. This is to minimise bounce cheque.

Some current account no need introducer so is easy. Cimb prime is one such acct. If you have sg cimb acct too, you can transfer s$ to your msia cimb acct instantly. But exchange rate not as good as money changer. Once you have open a acct in msia, just use those remittance service at money changer. Usually the rate is better than cash and serive fee is $10. But they will put in your acct rm10k per day max. So if you transfer rm 70k, it will take 7 working days to complete the deposit. This is due to currency control in msia.

[leesg123]

Try talking to the premier or private banking group in the bank.
Yes, another option is to use hsbc premier. If you have sg premier, you can also open a msia premier instantly.

[leesg123]

Opening a bank account in Malaysia for the purposes of property buying can be a nightmare especially when a person does not have a work permit or some kind of entry visa. Taking up a loan is an even greater hassle if you are a foreigner. I was wondering if anyone here has bought a Malaysian property without loan n what is the safest way to move the cash around? being a cowboy country, it is dangerous to hand the large sum of money to a small law firm or property agent, so I reckon it may be best to engage the most reputable law firm around to do the conveyancing. also where is the best place to change a large sum of sgd to rm for the best rate if buying Malaysian property in cash? anyone care to share that experience?
My advice is not to fully pay in cash. Go for 60% loan, open a full flexi home loan acct, dump all your cash there and your interest will be offset totally. So you maintain liquidity.

[DC33_2008]

[But why pay interest of at least 4.25% while u get return of 3.8% fm fd in RM. Unless you invest in their bonds. QUOTE=leesg123]My advice is not to fully pay in cash. Go for 60% loan, open a full flexi home loan acct, dump all your cash there and your interest will be offset totally. So you maintain liquidity.[/QUOTE]

[leesg123]

[But why pay interest of at least 4.25% while u get return of 3.8% fm fd in RM. Unless you invest in their bonds. QUOTE=leesg123]My advice is not to fully pay in cash. Go for 60% loan, open a full flexi home loan acct, dump all your cash there and your interest will be offset totally. So you maintain liquidity.[/quote]interest offset lah. Mortgage loan attract 4.2% interest, but cash in deposits also earn 4.2%. Fully flexi solution.

[leesg123]

interest offset lah. Mortgage loan attract 4.2% interest, but cash in deposits also earn 4.2%. Fully flexi solution.[/quote]http://www.cimbbank.com.my/index.php?ch=cb_per_hf&pg=cb_per_hf_buy&ac=3&tpt=cimb_bank

[Regulators]

thanks for all the advices. I think loan may be a good thing as I heard that 26 % rental tax is deductible if one has mortgage to finance, is that true?

[buttercarp]

Hi Regulators, I searched a few websites which I hope will be useful for you.

http://www.iproperty.com.my/news/112/step-by-step-guide-to-buying-property-in-malaysia

https://docs.google.com/viewer?a=v&q=cache:NHYnKbIZVbgJ:www.hhq.com.my/wp-content/uploads/2012/04/Legal-Guidelines-When-Buying-Property-in-Malaysia-English-Version-clean.pdf+buying+property+in+malaysia&hl=en&gl=sg&pid=bl&srcid=ADGEEShF2MfWjWzz3WQedXa2vdqZqPMH8abR1iPan-SMSNiQy-DfwikIugRoZYNbJy-Gne5DlSL-GC85ca8MF_6G6vZuRbzFpug9iVM4Ojud5j-leHbd7XBMxYkERD4CU3yLWj4I8j5e&sig=AHIEtbSXc88L13KtCdKr4J6S2Nix25EqMQ

The most important thing that you have to do is to buy from a reputable developer so you need to do lots of homework on it.

[leesg123]

thanks for all the advices. I think loan may be a good thing as I heard that 26 % rental tax is deductible if one has mortgage to finance, is that true?
Yes, the interest on the mortgage is deductible. But if purely looking at income, it is more worth to pay up and pay the 26% tax. Dont forget tat investing in KL is more than the rental yield, is the capital appreciation. Mine has appreciated at least 15% over one year.

[zzz1]

Opening a bank account in Malaysia for the purposes of property buying can be a nightmare especially when a person does not have a work permit or some kind of entry visa. Taking up a loan is an even greater hassle if you are a foreigner. I was wondering if anyone here has bought a Malaysian property without loan n what is the safest way to move the cash around? being a cowboy country, it is dangerous to hand the large sum of money to a small law firm or property agent, so I reckon it may be best to engage the most reputable law firm around to do the conveyancing. also where is the best place to change a large sum of sgd to rm for the best rate if buying Malaysian property in cash? anyone care to share that experience?
If u are taking loan from Singapore for oversea property loan, u need to open an account in Singapore. This is because the contract is with a Singapore bank. For this, u may be locked in the exchange rate at the point of time for the given loan period. And the bank normally has their own lawyer and assigned firm to do the legal part. In a way it is much secure..

Like wise, if you want to take up oversea bank loan, u need to provide a lot of supporting document In order to process and get approval ..

If you intend to make a full payment, I suggest that u take a very small amount of loan from Singapore bank, in this way, u will ride on the security using a 'proven' law firm as assigned by the bank. And u loose out a bit here and there but get a peace of mind...

In all sense, use the bank legal firm is safer...instead of select your own...

[hyenergix]

Opening a bank account in Malaysia for the purposes of property buying can be a nightmare especially when a person does not have a work permit or some kind of entry visa. Taking up a loan is an even greater hassle if you are a foreigner. I was wondering if anyone here has bought a Malaysian property without loan n what is the safest way to move the cash around? being a cowboy country, it is dangerous to hand the large sum of money to a small law firm or property agent, so I reckon it may be best to engage the most reputable law firm around to do the conveyancing. also where is the best place to change a large sum of sgd to rm for the best rate if buying Malaysian property in cash? anyone care to share that experience?

Different country, different style of working.

I hope you have found the solution, which is easy if you know the step: TT any amount you like via remittance company in Singapore direct to the developer's account. Never TT to the law firm's account.

For withdrawing cash in Malaysia, just set up a savings account with any bank in Malaysia, then TT via cheque in Singapore to your own Malayia account. Withdrawal using your card can be done at any ATM. If the ATM does not have your branch, you just pay additional $1 RM surcharge for using the ATM but you will still get your cash.

Have fun and don't miss the boat ;) Current investors are very aggressive and have been buying up a lot of properties in Iskandar.

[buttercarp]

http://biz.thestar.com.my/news/story.asp?file=/2013/3/30/business/12890598&sec=business

Be forewarned: Do not sign your rights away
BUYERS BEWARE
By CHANG KIM LOONG


“THE developer says I must sign the letter to collect the keys.”

How often do we hear that from house buyers? Too often. How often do house buyers know what to do when faced with such dilemma when taking vacant possession? Not often enough. Do you know the entire content of the letter that you are asked to sign? Not really. Are the content too confusing and legalistic? Ehh Conclusion: Guess there is too much pride to admit that they are ignorant. The worst affected ones are the nave and unwary first-time house buyers.

When completion of a house is delayed, the developer must pay compensation or liquidated damages, commonly referred to as LAD (liquidated ascertained damages) to the house buyer. This LAD is calculated at 10% per annum on the purchase price for the period of delay in handing over the house.

Developers (unscrupulous ones) are known to have resorted to various ways and means to avoid paying LAD and these include misleading house buyers into signing waiver letters before handing over the keys to the house buyers. Some even resort to refusing to hand over the house keys unless the house buyers sign such waiver letters. What are house buyers to do?

First of all, house buyers must know their rights, benefits and entitlement. Secondly, they must not sign their rights away.

The developer must hand over the keys to the house buyers when the house is completed and ready for delivery of vacant possession. Buyers will be asked to sign a letter when collecting their keys. What house buyers must know is that this letter for collection of keys should contain nothing more than an acknowledgement by the buyer that he has collected the keys and a confirmation as to how many sets of keys are given. This letter must not contain any terms or conditions that the buyer waives LAD or other rights, benefits and entitlement under the sale and purchase agreement (SPA) or that the buyer will not make any claim whatsoever against the developer.

HD Act and its governing regulations

Under the Housing Development (Control and Licensing) Regulations 1989 (HDR) [which are regulations made under the Housing Development (Control and Licensing) Act 1966 (HDA)], the sale and purchase agreement (SPA) for any housing accommodation sold by a housing developer must be in the format prescribed under the HDR. This SPA, unlike any other contract of sale, contains provisions which cannot be changed at all unless such changes have been sanctioned by the Controller of Housing at the Housing and Local Government Ministry (MOH). In other words, this SPA is a statutory contract and all the provisions in this SPA are statutory requirements which must be strictly complied with.

One of the provisions of the SPA gives the house buyer a right to be paid LAD immediately by the developer in the event of delay in the completion of the housing accommodation. It is found in Clause 22(2) of Schedule G and the corresponding Clause 25(2) of Schedule H - Sale & Purchase Agreement.

Can this statutory right be waived by the house buyer? According to the Federal Court, the answer lies in the overall purpose of the legislations and whether this purpose would be defeated by permitting waiver and contracting out.

There is no shortage of cases whereby the Courts of Law have decided that the housing legislations are a social legislation, the main purpose of which is to protect the interest of house buyers. And, according to the Federal Court, the protection given to house buyers under the HDA and HDR is not just a private right but a matter of public interest. Such court decisions have even received affirmation and endorsement by Parliament in 2007 when it amended the long title to the HDA to read as “An Act to provide for ... the protection of the interest of purchasers... ”

If statutory rights given to house buyers could be waived by them individually, surely the good and commendable intention of parliament to provide the much-needed protection for house buyers (and indeed the whole purpose of the housing legislations) would be defeated and eroded.

The conclusion is therefore clear and simple. Waiver letters are not worth the paper they are written on. They cannot be held against the house buyers and must be declared null and void. Developers must be made to stop trying to wriggle their way out of paying LAD. They must accept that the only way they can escape liability to pay LAD is for them to secure a certificate from the Controller of Housing extending the delivery date.

Word of caution

House buyers are strongly cautioned not to sign waiver letters to avoid possible undesired delay(s) or outcome in their claims and unnecessary legal battles with unscrupulous developers who will raise whatever issues possible to avoid or simply delay the legitimate claims from the house buyers.

“But what can I do if the letter contains a waiver? I don't have a choice. I want my keys and the developer says I must sign then only can give me the keys.”

Sign “Under Protest” is one way. The house buyer can write a note on the letter that he does not agree to waive LAD, or that he does not agree to waive his rights, or that it is “Without Prejudice” to his/ her rights under the SPA. Alternatively, he can delete the offending words or sentences.

If the developer refuses to give the keys unless the house buyer signs without adding or deleting anything from the letter, the house buyer are constrained to sign and collect the keys but should immediately after that write to the developer to state that he was not given a choice but was “arm-twisted” and that he does not agree to waive LAD or other rights. A complaint should be immediately lodged with the Enforcement Division of the Housing Ministry (www.kpkt.gov.my ) and a claim can be filed at the Housing Tribunal, both of which should be done expeditiously.

Tribunal for Home Buyer Claims: www.kpkt.gov.my Portal TTPR)

The Tribunal for Home Buyer Claims, commonly known as the Housing Tribunal, is empowered to deal with house buyers' claims against developers and can give awards up to RM50,000. Its awards can be enforced against developers just like a judgment from a Court of Law. In addition, non-compliance of its awards is an offence and the defiant developer can be prosecuted.

Even though its head office is in Putrajaya, the Housing Tribunal has branches in Johor Baru, Seberang Prai as well as Kuala Terengganu. It conducts court hearings, not just in Putrajaya and its branches, but also many other localities for the convenience of house buyers. The filing fee is RM10 and no lawyers are required. It has been set up for the benefit of house buyers. It is cheap, fast and easy, so make use of it.

Even though I take the view that a waiver of rights and benefits under the SPA by any house buyer is void and cannot be enforced, house buyers are strongly advised to avoid signing any such waiver letter to avoid undesired outcome to their claims.

House buyers are cautioned to exercise prudence when dealing with such shrewd and unscrupulous housing developers who have no principles. Avoid buying property from those developers who have such unprincipled track record.

Chang Kim Loong is the honorary secretary-general of the National House Buyers Association (www.hba.org.my), a non-profit, non-governmental organisation manned by volunteers. He is also a councillor at the Municipal Council of Subang Jaya.

[kane]

Interesting article. Good points.