Perfection of Transfer

Perfection of transfer is the process of registering the individual or strata title of a property in the purchaser's name after that title is issued. It commonly arises where a purchaser bought from a developer before the individual or strata title existed, so the original transaction was documented through the sale and purchase agreement and assignment arrangements rather than an immediate registered transfer of the issued title.

Once the individual or strata title is issued, the ownership record can be "perfected" by completing the appropriate transfer and registration process.

Quick summary

• Perfection of transfer is required when the individual or strata title has now been issued but has not yet been registered in the purchaser's name.

• The transfer is effected through Form 14A and becomes effective as a registered transfer when it is registered under the National Land Code.

• Legal fees are governed by the Solicitors' Remuneration Order 2023 (SRO 2023). The applicable cap is not always 50%: it depends on whether the same solicitor handled the original pre-title transaction.

• Where the same solicitor handled the original transaction before title issuance, the subsequent transfer fee is capped at 25% of the applicable scale, subject to the applicable minimum. Where a different solicitor handles the later perfection, the cap is 50%, again subject to the applicable minimum.

• Malaysian land law does not make a solicitor the only person legally capable of completing every transfer, although a conveyancing lawyer is commonly appointed and may be required in practice where financing is involved.

• The Form 14A must still go through the applicable stamping or adjudication process, but perfection of transfer does not automatically mean a second full ad valorem transfer duty is payable if an earlier qualifying agreement has already borne duty under section 21 of the Stamp Act 1949.

1. Why do you have to do perfection of transfer?

When a purchaser buys a property before the individual or strata title has been issued, the purchaser's rights are usually documented through the sale and purchase agreement and the relevant assignment arrangements. The purchaser may therefore have acquired the contractual and beneficial interest in the property even though the issued individual or strata title is not yet registered in the purchaser's name.

Once the individual or strata title is issued, the next step is to register the transfer of that title.

Section 215 of the National Land Code provides that a transfer of alienated land is effected through Form 14A. Upon registration, the transferor's registered title passes to the transferee in accordance with section 215(2).

Registration is important because it places the purchaser on the land register as the registered proprietor. Registered title is generally protected by the National Land Code's indefeasibility regime, but that protection is not absolute. Section 340 contains statutory exceptions, including certain situations involving fraud, forgery, void instruments or unlawful acquisition.

2. How will you know if the individual or strata title has been issued?

The developer, developer's solicitor or property-management body may notify purchasers once the individual or strata titles are ready for transfer.

If you have not received an update, you can:

• contact the developer or its appointed solicitor;

• ask whether the title for your parcel or unit has been issued;

• check whether the developer has begun the perfection exercise; or

• obtain a land search where appropriate to confirm the current registered title particulars.

If the title has already been issued but remains registered in the developer's or original proprietor's name, perfection of transfer may still be outstanding.

3. How much does perfection of transfer cost?

The total cost can include professional legal fees, Land Office registration charges, land-search costs, stamping or adjudication costs, and other transaction-specific disbursements.

A. Lawyer's fee for perfection of transfer

For current work, the relevant fee framework is the Solicitors' Remuneration Order 2023, not the old SRO 2005.

SRO 2023 distinguishes between two common situations for the subsequent transfer after the individual or strata title is issued:

1. The same solicitor handled the original pre-title transaction. Under Sixth Schedule rule 2, the fee for the subsequent transfer must not exceed 25% of the applicable First Schedule scale, subject to the specified minimum fee.

2. A different solicitor handles the later perfection of transfer. Under Sixth Schedule rule 3, the fee must not exceed 50% of the applicable scale, subject to the specified minimum fee.

The important point is that 25% and 50% are conditional rules. It is incorrect to state that every perfection-of-transfer matter automatically attracts 50% of the normal scale fee.

The quotation may also include permitted disbursements and applicable taxes. Ask the solicitor to identify the professional fee and transaction disbursements separately so you can see what each amount relates to.

B. Government charges, searches and stamping

Depending on the property and state, the transaction may involve:

• Land Office registration fees;

• official land-search fees;

• stamping or adjudication of Form 14A; and

• other state or transaction-specific charges.

The Form 14A still has to undergo the applicable stamping or adjudication process. However, do not assume that perfection automatically creates a second full ad valorem transfer duty.

Section 21 of the Stamp Act 1949 is relevant. Where an earlier qualifying contract or agreement has already borne the applicable ad valorem duty, section 21(3) provides a mechanism under which the later conveyance or transfer is not charged again with further duty, with the earlier duty capable of being denoted on or transferred to the later instrument on application to the Collector.

The correct treatment depends on the stamped SPA or earlier instrument, the previous adjudication and the current assessment. The solicitor should therefore check the actual stamped transaction documents rather than assume either that no duty is payable or that a second full ad valorem duty is automatically payable.

4. Do you need a lawyer for perfection of transfer?

Malaysian land law does not make a solicitor the only person through whom every land transfer must be completed.

The National Land Code allows execution of land-dealing instruments to be attested by several categories of authorised persons, and JKPTG states that land transfers can be undertaken without a lawyer in appropriate circumstances. That does not mean every perfection matter is practical to self-manage.

In practice, perfection of transfer often involves:

• the developer or developer's solicitor;

• Form 14A preparation and execution;

• title and land-search review;

• stamping or adjudication;

• Land Office registration;

• financing documents where the property is charged or financed; and

• coordination with a bank where a financier is involved.

Where financing is involved, the bank will commonly require solicitors to handle the financing and security documentation.

A conveyancing solicitor can coordinate these steps, check the title and transaction documents, and deal with registration or requisition issues that arise.

5. What documents should you prepare?

The exact documents depend on the original transaction, the developer, the title and whether financing is involved. Commonly requested documents include:

• a copy of the purchaser's identity card or identification document;

• the Sale and Purchase Agreement;

• the Deed of Assignment or earlier assignment documents, where applicable;

• the developer's notice or correspondence concerning issuance of the title;

• the latest quit rent receipt;

• the latest assessment receipt, where applicable;

• the existing financing or bank details, if the property is financed; and

• any previous stamped or adjudicated transaction documents relevant to the transfer.

A solicitor may request additional documents after reviewing the title and transaction history.

6. Who signs the Memorandum of Transfer (Form 14A)?

Form 14A is the prescribed instrument used to transfer the issued title from the registered transferor to the transferee.

Section 215 of the National Land Code provides that the transfer is effected through Form 14A. The prescribed form contains execution by the transferor and acceptance or execution by the transferee, and execution by natural persons is subject to the attestation requirements in section 211.

A typical perfection process may therefore involve:

1. checking the issued title and the original transaction documents;

2. preparing Form 14A and related documents;

3. arranging execution and attestation by the relevant parties;

4. sending documents to the developer or registered proprietor for execution where required;

5. completing the applicable stamping or adjudication process;

6. satisfying any financing or charge requirements; and

7. presenting the instrument for registration at the relevant Land Office.

Once the transfer is registered, section 215(2) provides for the registered title to pass to the transferee.

"Perfection of transfer is the step that moves the purchaser from a pre-title transaction structure into the land register once the individual or strata title exists. The important part is not simply signing Form 14A, but coordinating the title, stamping, developer and any financing requirements so the transfer can actually be registered." — Akmal Saufi Mohamed Khaled, principal at ASCOLAW (Tetuan Akmal Saufi & Co).

Frequently Asked Questions

How do I know if I need perfection of transfer?

If your individual or strata title has been issued but the title is still registered in the developer's or original proprietor's name rather than yours, perfection of transfer may still be outstanding. A title search and the developer's records can confirm the position.

Are legal fees always 50% of the normal scale?

No. Under SRO 2023, the applicable cap depends on who handles the subsequent transfer. Where the same solicitor handled the original pre-title transaction, the cap is generally 25% of the applicable scale; where a different solicitor handles the later perfection, the cap is generally 50%, subject in each case to the applicable minimum and the precise SRO rules.

Do I legally have to appoint a lawyer?

Not as a universal National Land Code rule. However, professional handling is common, and a bank will commonly require solicitors where financing or security documentation is involved. A lawyer can also coordinate the developer, stamping, title and registration requirements.

Will I have to pay full stamp duty again on Form 14A?

Not automatically. The Form 14A must still be dealt with under the stamping and adjudication process, but section 21(3) of the Stamp Act 1949 can prevent further duty on the later transfer where an earlier qualifying agreement has already borne the relevant ad valorem duty. The actual stamped SPA and previous adjudication should be checked.

What happens if I do not complete perfection of transfer?

The issued title may remain registered in the developer's or original proprietor's name. That can complicate later dealings such as a sale, refinancing, charge, transmission or other transaction involving the title.

What should you prepare before asking ASCOLAW to assess the matter?

If you have been notified that the individual or strata title has been issued, prepare the documents you already have, such as:

• the SPA;

• the Deed of Assignment or earlier assignment documents;

• the developer's title-issuance or perfection notice;

• the purchaser's identification details;

• current financing or bank information, if any;

• any stamped or adjudicated transaction documents; and

• the title particulars or land-search result, if available.

Submit those details through the enquiry form below so ASCOLAW can assess what remains outstanding, whether financing or developer coordination is required and what information is needed for a proper quotation.

If you need help with perfection of transfer, contact ASCOLAW's property lawyers here.

This article is for general information only and does not constitute legal advice. Every transaction and every set of facts is different. Obtain specific advice from a qualified adviser before acting on any part of it.

Related guides

• Land Title Transfer Procedure in Malaysia

• Discharge of Charge by Lawyers

• Conveyancing Lawyer

• Land Title