ADVISORY: Transfer of strata title — should you pay?


FEE FACTS: For years, developers and liquidators are charging fees to transfer strata title and to consent to ownership transfer. Is it legal?

Andrew K@Petaling Jaya:

Q1: I am the house buyer of a housing project developed by a company which is being liquidated and the court has appointed a liquidator to take over the company’s affairs. The liquidator then called for a Purchasers Verification exercise and wanted to collect 2% of the purchase price as administrative fee in transferring the strata title. Is it lawful for the liquidator to collect administrative fee to transfer the strata title?
Further, when the current house buyer wants to dispose his house to another party, the Liquidator is asking for another administrative fee upon his execution of the letter of confirmation and consent for deed of assignment. Is this lawful?
A1: Pursuant to section 232(2) and (3) of the Companies Act 1965, Liquidators are allowed to collect fees permitted by the Court or a committee of inspection or with agreement with its creditors. In this context, ‘fees’ must be reasonable and acceptable under the circumstances.
House buyers who feel aggrieved by the ‘conduct of affairs’ by their Liquidators may lodge an official complaint to the Government Official Receiver pursuant to s 229 of the Companies Act for their due investigation. Details of the Official Receiver are as follows:
Malaysia Department of Insolvency
Aras 2 & 3, Bangunan Hal Ehwal Undang-Undang, Presint 3, Pusat Pentadbiran Kerajaan Persekutuan 62692, Wilayah Persekutuan Putrajaya, Malaysia
Talian Am: 03 88851000
Faks: 03 88851303
The Government Official Receiver, where a private liquidator has not been appointed, currently charges a nominal fee of RM500 only.
Q2: I heard some developers charging house owners RM500 to RM700 as administrative fee to transfer the strata title to the owners upon issuance of the strata title. How much fee is acceptable or reasonable to be collected by the liquidator or developer in transferring the strata title or in consenting to the transfer of house ownership?
A2: Our view is that the fees chargeable by the developer depend on the terms and conditions stated in the Sale and Purchase Agreement (SPA) in the case of commercial or non-regulated properties, for example in sub-sale transactions.
In the case of the statutory Sale and Purchase Agreement (SPA) regulated under the Housing Development (Control & Licensing) Regulations, it is stipulated in the SPA that the developer should execute the Memorandum of Transfer within 21 days from issuance of the strata title. There is no mention of any fee payable as it is part and parcel of the developer’s obligation and thus no extra fees should be chargeable. However, in instances where liquidators are appointed, the above answer in A1 is applicable.
For the benefit of the readers, s 229 of the Companies Act is hereby reproduced:
Section 229. Control of unofficial liquidators by Official Receiver
(1) Where in the winding up of a company by the Court a person other than the Official Receiver is the liquidator, the Official Receiver shall take cognizance of his conduct and if the liquidator does not faithfully perform his duties and duly observe all the requirements imposed on him by any written law or otherwise with respect to the performance imposed on him or if any complaint is made to the Official Receiver by any creditor or contributory in regards thereto, the Official Receiver shall inquire into the manner, and take such action thereon as he may think expedient.
(2) The Official Receiver may at any time require any such liquidator of a company which is being wound up by the Court to answer any inquiry in relation to any winding up in which he is engaged, and may, if the Official Receiver thinks fit, apply to the Court to examine him or any other person on oath concerning the winding up.
(3) The Official Receiver may also direct a local investigation to be made of the books and vouchers of such liquidator.
By National House Buyers Association of Malaysia (HBA)
DISCLAIMER: The answers are solely the experts’ opinions and act as a guide only. NST RED will not be liable for any losses arising out of reliance on the advice here.


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