Types of Land Dealings

We have been really busy lately but don’t worry we haven’t forgotten our readers! Due to our other commitments we have been unable to be as active as we would like on this blog. Fear not, we have not abandoned our commitment to CJ Consulting and are making plans to expand our content into other areas.

First let’s talk about The Boring (but important) Stuff... Read more!

Under the National Land Code 1965 there are four main types of dealings :
1) Transfers
2) Leases and Tenancies
3) Charges and Liens
4) Easement

Are you guys cracking out the dictionary? Don’t worry we will explain what these dealings are.

1) Transfers
Transfer means the transfer from one party to another either the land, a share in the land, a lease in the land or a charge on the land. The most common and well known transfer is of course the transfer of the land and the transfer of the lease. The transfer of a lease is more commonly known as a transfer during a sale of a leasehold land (e.g. a 99 year lease land) A less common transaction would be the transfer of a share in the land and a charge on the land.

2) Leases and Tenancies
This refers to the lease of a land by the registered owner and differs from the ‘transfer of lease’ stated above. If you own a piece of property and would like to rent it out to another party for a period exceeding three years and would like that agreement to be afforded protection under the National Land Code, then a lease is usually drawn up. This transaction is very common among landowners who lease out their lands to small farmers, companies and even banks who want a long term tenancy. Tenancies refer to tenancies that do not exceed three years and are exempt from registration. For one, who is a party to a tenancy that exceeds three years, to benefit from the protection of the Code, that dealing must be registered at the land office.

3) Charges and Liens
Charge refer to an instrument that is registered to secure payment of a principal sum (for loans) and are commonly entered by banks. Lien is created when the registered owner of a land deposits the title with another person as a security for a loan. The person who holds the title is known as a lienholder but his interest is not a registrable dealing but protection is afforded by the entry of a lienholder’s caveat. So if you lend your friend some money as a friendly loan, get him to deposit his title with you as a security and you can enter a lienholder’s caveat to protect that interest.

4) Easement
Easement refers to any right given by one registered owner to another registered owner for the beneficial enjoyment of the first registered owner’s land. A well known easement is the right of way. In circumstances where one landowner might need to access another owner’s land to reach a public amenity (like a main road or a river) an agreement can be made between the parties where an easement can be granted to the owner requiring the access.

We hope that the above explanation will somewhat enlighten our readers on the different type of dealings on land.

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Getting A Loan: 4 Crucial Tips

First off, sorry for the hiatus from posting… last two months have been really hectic. Due to the many queries we receive asking for loan tips, here goes:-
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1. Creditworthiness
Your creditworthiness is the most important factor in determining the success of your loan application. What the heck does that mean?
In simple terms, creditworthiness refers to your payment and financial profile. In approving loans, banks will look at:

a) Can your income sustain your loan repayment? As a general rule your monthly repayment should not exceed 40% of your monthly income (this varies with banks). So if you need to pay at least RM1000 per month on your car payment, credit cards, etc , this amount together with your monthly housing loan repayment should not exceed 40% of your monthly income. In simple mathematical terms:

(Monthly Housing Repayment + Minimum Monthly Credit Card Repayments + Car Loan Repayments + Other monthly repayments to financial institutions) < 40% of monthly income

b) Your payment profile; i.e., whether you have been paying your loans on time or have you been consistently paying late. If you constantly default for a period of more than 2 months and for more than one of your loans, most banks would consider you an “undesirable” candidate for loan approval. Basically, if you have a tendency to pay late, they feel that you will also have a tendency to pay them late if they give you the loan. Makes sense, right?

2. Paying Taxes
I know most of you hate paying taxes but a wise man once said (I can’t remember who) there are only two things in life that are certain: Death & Taxes *LOL*. Man, that wise man really cracks me up!

What has taxes got to do with loan approvals? Well for one it proves that you have the income that you say you have. Therefore, if you own a business and are thinking of fabricating payments slips as “proof of income” ...DON’T. Banks look at legal income as well so if you provide them with payslips you must back it up with your tax declaration and tax payment receipts.

3. Clean up your financial records beforehand
Before you even think about buying a property, try to clean up your financial records first to ensure that you are a desirable customer for a loan. If for some reason or other, you don’t meet the general criteria set out above, take a year to improve your creditworthiness and to improve your financial and tax records before you buy a property. If you feel really really desperate to buy that property you have been eyeing, either slap yourself silly or get someone to co-sign the loan.

4. Shop around for the right loan for you
Most people tend to rely on the bank’s officers or marketing agents to give them all the information about their taking a loan. Don’t. Understand that their primary objective is to close the deal. Or sale. They will not be looking at giving you the best deal. They are looking at getting you to accept the loan which provides their bank with the best return on the Bank’s investment. In other words, to pay the highest interest for the longest period of time.

To know which loan package suits you, you need to know yourself. Do you have regular income or is it irregular? Do you have kids? Will your income increase in the next 5 years? Do you intend to pay off the loan within a short period of time?

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I'm a Foreigner Purchaser - What Should I Do?

"UGA OMO ROOR TAP" (Oops! Sorry, I thought I was writing to aliens, until I realise... NOT the UFO kind. Let’s try again...If you are a foreign purchaser, it is more likely than not that you will find buying a property in Malaysia is totally....well....alien! Well here are some tips to help you out.
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No matter what, you need permission!
Just like getting permission to land your alien spaceship, you need to get consent from the state authority to purchase any property in Malaysia. Don’t get confused. This consent is different from the consent given by the Foreign Investment Committee. This consent comes from the state authority. So if you decide to buy in Kuala Lumpur, you need to get the Wilayah Land Office’s Consent. Every State has different requirements on the consent, so make sure you find out before you pay that 2% down payment.

You can only buy properties within a certain price range
I know that the title above is particularly vague but different rules apply for different states! Generally, foreign purchasers can only purchase property with the purchase price of RM250,000.00 and above.
IMPORTANT NOTICE: The Selangor Government has made it a policy that all purchases of property in Selangor by a foreign national (including Permanent Residents) shall only be allowed to purchase residential properties RM500,000.00 and above. This policy is enforceable from 1st June 2009 onwards.

It will take you longer
Because of the extra consent required to purchase a property in Malaysia, the foreign purchaser must be patient. It will usually take 6 months or more to complete a sale. So make your necessary arrangements. You can either rent the property you intend to stay in or prepare the rent to stay elsewhere.

You may not get 90% loan
More often than not, unless you can show proof that you intend to stay in Malaysia permanently, have lucrative businesses in Malaysia (if you do...call me!) it is unlikely that the banks here will give you 90% margin of finance. Expect about 60-70% margin of financing unless you can get a bank from your home country to finance the purchase. But this rule does not apply to everyone. Different banks have different requirements. Do check with the bank first before you part with your $$$.

That’s the tips for today. It’s not exhaustive but I hope it helps!

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Tenancy Tips for Dummies

Before you take affront at being called a Dummy, I consider myself one too...until I acquire the necessary knowledge, then I am an Educated Dummy! So much for trash humour...Alrighty then, this week I would like to share with you some useful tips to know before you decide to rent a house or a room.
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Deposits
Most landlords will require that their tenants pay a security deposit and the amount is usually two month’s rent. If the unit is furnished with luxurious furnishings, the landlord may require an additional month’s rent. This deposit must be paid up front together with one month’s rent in advance. So before you go and find a rental unit, make sure you have a monthly budget for your rental and an additional two month’s rental to pay this deposit. No fear, the deposit will be returned to you at the end of the tenancy period.

Aside from the security deposit, you will also need to prepare an amount as utilities deposit. This deposit is paid to ensure that should you leave the unit without paying the utilities (eg. water, electricity etc), the deposit can be used by the landlord to set off the outstanding. This amount may vary depending on the number of fixtures that accompany the unit. If the unit has five air conditioners, be prepared to pay a higher amount, though as a general rule, the amount is equivalent to a half month’s rent.

Tenancy Period
How long can the tenancy be? Before you sign that tenancy for 10 years thinking that you got a great rental deal, think again. Tenancy can only be for a period of 3 years. Any period exceeding that will require a registration at the relevant Land Office for the enforcement of your rights. A tenancy period exceeding 3 years is a lease which must be registered at the land office for the enforcement of the terms of the lease.

A Thing about Room Rental
When renting a room, do make sure that the main tenant is entitled to sub-let to you. Get a copy of the main tenancy and have a look as to whether there is a sub-let clause. If there isn’t one you run the risk of being a trespasser! If you are the main tenant, make sure you have the right to sublet, and do collect the above deposits to protect your interest.

Who Pays for What
Make sure that the agreement spells out who pays for what. If the unit is an apartment, as a general rule the landlord will foot the bill for the quit rent, assessment and maintenance and the tenant will pay the utilities including the sewerage charges. If you want the landlord to pay for it, spell it out in the agreement.

Well that’s all folks, if you have any comments, please post them, and I shall be happy to entertain any queries!

Communication Breakdowns & How They Affect Us

Breakdowns in communication just happen. Hey, we're human.

Communication breakdown can be the source or the result of conflict, but it is also important to recognize that a lack of conflict can also be a sign of communication breakdown. Inadequate training, misunderstandings, differing backgrounds, or lack of respect can all be causes of communication breakdown. The results of communication issues include withholding information, loss of trust, reduced cooperation, reduced productivity, reduced creativity, personal attacks, sabotage, complaints, or team breakup.
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What is unfortunate, however, is how these breakdowns affect our relationships, both business and personal. The fact is, because most of us were never taught how to communicate in a way that produces desired results, we continue to experience frustration, resistance, conflicts, or breakdowns in our communication. Some of the obstacles that may prevent you from reaching certain objectives during the communication process are:-

-We want to be heard, but we don't always pay attention to the quality of our message.
-We want to be understood, yet we only assume that our communication was successful.
-We want others to agree with us and we often become consumed with having to be right, that we forget to listen to others.
-We want an action or response from the others, but we do not let them know what we really want or how to achieve it.
-We want to understand the message that the other person is communicating to us, yet our ability to listen is tainted by our perceptions of the person speaking and by the outcome we are looking to achieve. So, we often pass judgment on the speaker, evaluating the messenger rather than fully accepting the entire message.

Evolving your communication skills requires taking full responsibility for the outcome of each conversation, responsibility for what you say and for the message that the other person is hearing. Since we all listen and process information differently, it is crucial to uncover and to become sensitized to the other person's style of communication in order to align it with our own.

Mastering Communication Skills & Confidence

Communication skills are important in developing professional & personal relationships. Relationships begin & grow through communication. Effective communication skills are essential. Without them, one’s effectiveness in all roles of life – professional, leader, manager, parent, friend, etc – is limited. Effective communication will help you become an a pleasure to your listeners.
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To understand effective communication, we need to first realize the aim of any communication, be it a letter or a speech or just a simple conversation. What is the main reason for communicating with others? What do you plan to achieve with this communication? Why do you need it to be an effective communication in the first place?

Communication can occur via various processes and methods and depending on the channel used and the style of communication there can be various types of communication.

Based on the channels used for communicating, the process of communication can be broadly classified as verbal communication and non-verbal. Verbal communication includes written and oral communication whereas the non-verbal communication includes body language, facial expressions and visuals diagrams or pictures used for communication.

So in a nutshell, why is communication important?
1.To relate to others and build relationships
2.To express ourselves and meet our needs
3.To share with others, to empathize and share intimacy
4.As a professional payoff as there is a great advantage to being a good communicator (most successful people and corporations have strong communications to get what you want)
You need to learn the best method to communicate your desires. And CJ Consulting is the place to get fast-tracked educational seminars that will enrich your skills.

Did you find this useful? Want to know more? Our seminar is coming soon. Please send us a message or email us.

Things You Need To Do Before Buying A Property

Deciding to buy a property is easy. Paying the deposit is easy. These two decisions may often be the two easiest decisions you have ever made when buying a property. Then the problem starts. Which lawyer should I use? Can I move into the Property? What is an ‘assignment’?
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Often, a new purchaser will just pay the deposit, call up a friend (who is equally clueless), appoints a lawyer recommended by a friend’s friend’s uncle and hope that nothing goes wrong. This is a common scenario especially so for purchases from secondary market listings where the terms of the contract between the seller and the purchaser is king.

This often results in:
• The purchaser paying late interest to the seller.
• The purchaser having his deposit forfeited when his application for financing is rejected
• The purchaser getting a house with ‘extras’- tenants that do not pay rent.
• The purchaser not getting the property but having to service the loan
• .... and others .....

Scary? Forewarned is forearmed.

Here are five most important things to know & do when buying a property.

1) Read the Offer to Purchase Carefully….Better Yet, Get a Lawyer to Read It!
Before you hand over your hard earned money to the seller or to a property agent, usually you will be asked to sign a document called “Offer to Purchase”. Don’t. Read it first. If you can, get the seller to give you at least 48 hours to read it first (so that you can give a copy to your lawyer). This “Offer to Purchase” is usually an agreement by itself and would contain the important terms and conditions which are to be incorporated into the sale and purchase agreement. Make sure you can fulfill those terms and conditions.

Delaying the signing of the ‘Offer to Purchase may not always be possible especially so where the property is a ‘hot cake’. It may just be a sales spiel: “If you don’t sign now, there is another buyer waiting to grab it!” Don’t be fooled. ‘Hot cakes’ are usually rare in secondary market listings unless the owner is looking to sell quickly due to financial hardship. This in itself is a red flag which brings us to the next nugget.

2) Get A Proper Conveyancing Lawyer
When you want to learn to bake a cake do you go to a sandwich maker? The answer is of course a resounding “NO”. Surprisingly a lot of people instruct lawyers who are unfamiliar in conveyancing transactions to act on their behalf. Do not hesitate to question you lawyer. Ask him/her how long it will take to complete the transaction, what is the procedure like? Ask for a step by step account on how the entire process will take place. It is important for you to understand the process as this will not only cut down miscommunication and finger-pointing when things go wrong, it will also help you understand the various implications and assist you in your decision making process. If your lawyer cannot give you a reasonable account of the process….get another.

3) Don’t Deposit Money With The "Agent"
Before all the real estate agents shred me to pieces, what I mean is that the purchaser should only pay the earnest deposit with a licensed agent and in the name of the agency and NOT the agent’s personal name. This is to ensure that if the seller refuses to sign the agreement, the agency shall be required to return the earnest deposit. Many a times, when this happens, these rogue “agents” will abscond with your money.

4) Try to Get Your Loan Approved Before the Sale and Purchase Agreement is Signed.
Ordinarily people would apply for a loan after the sale and purchase agreement is signed but to do this is risky if you have a bad history of paying any loans you might have albeit credit cards, car loans or personal loans. If your loan application is rejected and you have already signed the sale and purchase agreement…Bye-Bye Deposit.

5) Find Out if There Are Any Tenants
If there is a tenant staying at the house you intend to buy, get a copy of the tenancy agreement and furnish it to your lawyer. If you want to let the tenant continue with the tenancy get your lawyer to prepare an assignment of the proceeds over to you when the sale is completed. If you do not want the tenant, make sure you give the seller a deadline to remove the tenant within a certain period of time or else….charge the seller Late Interest.

Did you find this useful? Want to know more? Our seminar is coming soon. Please send us a message or email us.

Five Important Aspects of a Subsale Agreement

What is a subsale agreement?

A subsale is a sale of property between two parties neither of whom are property developers. So when you purchase from a party who is NOT a developer, the agreement that you sign is called a Subsale Agreement. This agreement is important as it covers all the terms and conditions between the two parties. Remember a subsale transaction falls under the Housing Development (Control and Licensing Act), 1966. So what are the important aspects that you need to know?
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The important aspects are:-

1) ‘With’ Title or ‘Without’ Title
First you need to know if the property is ‘With’ Title or ‘Without’ Title. This means you need to know if the individual document of title (IDT) has been issued. IDT is to land what an identity card is to a Malaysian. Why is this significant? Well, whether a property is with or without title will determine the entire transaction process. Different documents are used for both types and the rights under the law are also different.


2) Leasehold or Freehold
Another aspect that you need to know before you buy a property is whether the property is a leasehold property of a freehold property. These two types of property affect both your decision to buy and the documents that are involved in the transaction. Two of the main issues to consider are that a leashold property are usually consider to depreciate in value (although not necessarily true) and the time it takes to complete the purchase is usually double that of purchasing a freehold property.

3) Citizenship / Residency of the Purchaser
If you are a foreign national, the good news is that you no longer need to get the approval from Malaysia’s Foreign Investment Committee as long as the purchase price is above RM250,000.00. Properties below that price cannot be purchased by a foreign national. Do remember, however that you STILL need to get the relevant state’s consent to the sale. For instance, if you purchase a property in Selangor, you need to get the Selangor Land Office’s Consent.

4) Seller’s Loan
If the property is still charged or assigned to a bank for a loan taken by the Seller, make sure you check to see that the amount that he owes his/her bank is NOT more than 90% of the purchase price. If it is more than that, there is a risk that the Seller may ‘run away’ before the sale is completed and the only way for you to complete the transaction is to pay whatever extra that the Seller owes his/her bank.

5) Make Sure You Can Pay
Before you even pay an earnest deposit to the real estate agent or the Seller, please make sure that if you intend to get a loan to finance the sale, your loan can be approved. If you do not have the necessary proof of income or if your name has been blacklisted for consistent failure to pay your monthly installments on your debts (credit cards, car payments, personal loans etc.) your loan could be rejected. If your loan is rejected after you have paid your deposit, the seller has the right to forfeit the deposit if you do not go ahead with the purchase. Play safe, get the loan before paying any monies or better yet, get the Seller to agree to give you two weeks to get the loan approved and if it is not, any deposit paid should be returned to you. Lastly, make sure you get it in writing!

Did you find this useful? Want to know more? Our seminar is coming soon. Please send us a message or email us.

Taking the Advantage of Owning an Auction Property During the Current Economic Slowdown

Developers & banks are now resorting to auctions to move properties that have generally outperformed the market throughout the steep market slowdown. More properties are now being sold at auctions, and the public should be aware on the potential of auction sales in Malaysia.

Despite the current downturn, there are many who are actually taking advantage of the current situation and are getting good bargains for good properties in hosted auctions. Do you want to know the drills of owning an auction property? How much cheaper do you pay? Pros & cons? Any hassle? Paperwork?
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Want to know more? Our seminar is coming soon. It is affordable, and you do not want to miss this opportunity! Please send us a message or email us.