Perfection of Transfer

What is Strata Title

A Strata title is a title issued in respect of a parcel and a provisional block. There are stratified properties or easily said multi-story buildings such as apartments, condominiums, and offices. They all shared the common facilities and types of equipment within the development, for instance, gated and guarded communities, security, car parks, and facilities governed by a common owner.

All purchasers shall obtain their title to ensure that the property will eventually be owned by them legally.
Worry not, all the applications and issuance of the strata title to the buyer, will be managed by the developer. The purchaser will be notified about it, and they can always call the developer to find out the status of the title.
After the strata title has been issued, what should the purchaser do?

As the topic highlighted, the buyer must undergo the process of perfection of transfer to transfer the ownership of the property. Is this necessary?

What is Perfection of Transfer?

Perfection of Transfer (POT) is a legal procedure to transfer the ownership of the property into the name of the property purchaser. This is necessary if the land office has not yet issued an individual title or strata title for the subject property. This process usually occurs with newly released houses or principal units bought from a real estate developer.

The Strata Title issued by the developer did not yet indicate the ownership of the buyer until the transfer of ownership had been executed.

Process of Perfection of Transfer:

1. The purchaser appoints his/her lawyer.
2. The lawyer prepares a Memorandum of Transfer (Form 14 A) which is signed by the developer and buyer.
3. The developer will deliver the original title (at this stage still under their name) to the lawyer to finalize the transfer of property ownership to the buyer.
4. The lawyer files an adjudication of the MOT with the Inland Revenue Board (IRB). The buyer then pays stamp duty according to the property’s purchase price.
5. The lawyer presents and registers the MOT and finalizes the transfer of ownership at the land office.
   Documents:
6. Purchaser’s identity card
7. A copy of the strata title
8. A copy of the SPA
9. The latest assessment receipts.
10. The quit rent receipts.
11. Other relevant documents.
    Effects of no transfer
12. No acknowledgment as the registered owner.
    Until the procedure is done, the property will be under the ownership of the developer. The buyer cannot do anything with the property including sell, rent, or charge for the loan.
13. Selling property will be a lengthy process.
    Yes, the purchaser still can sell the house but must face the tedious and prolonged processes to get there, which costs more time, money, and commitment.
14. Hard to get a housing loan.
    Banks typically will not approve loans when a property does not have titles. Plus, the purchaser may have to bear the additional costs when executing the transfer (MOT), when applying for the loans, as Perfection of Transfer is used as an instrument of charge to banks for loans.
15. Get a penalty.
    Regulation 11A (3) of the Housing Development (Control & Licensing) Regulations 1989 specifically states that a housing developer shall execute the instrument of transfer within 21 days from the date the strata title is issued and received by the housing developer from the appropriate authority, and thereafter forward the same to the purchaser who shall execute the instrument of transfer within 21 days of receipt of the same from the housing developer.

Any person who contravenes shall be guilty of an offense and shall be liable on conviction to a fine not exceeding RM 5,000 or a term of imprisonment not exceeding 3 years or both.