Buying Property in Malaysia: 7 Legal Mistakes to Avoid

Purchasing property is one of the most significant financial decisions most Malaysians will ever make. Whether you’re buying your first home, growing your business, or investing in real estate, it's crucial to ensure that the transaction is legally sound. At Chan & Chia, we are experienced in conveyancing and property matters, we’ve seen how costly legal mistakes can derail what should be a smooth process.

Here are 7 common legal mistakes to avoid when buying property in Malaysia:

1. Not Verifying the Land Title

Before signing anything, ask for a copy of the title to ensure that the seller is the registered owner of the property. Check the title for any restrictions, category of land use, or any other encumbrances endorsed on the title.

Ensure that the property is not tenanted or leased out and that the seller is able to deliver vacant possession to you. 

Tip: Perform an official land search or appoint a conveyancing lawyer to conduct due diligence.

2. Ignoring Encumbrances

An encumbrance (such as a bank charge, lease, caveat or any other endorsement on the title restricting land dealings) registered on the property can prevent the transfer of ownership.

Buyers must ensure that the property is free from such legal burdens, or that they are addressed during the purchase process.

Tip: Always include a clause in your Sale and Purchase Agreement (SPA) requiring the removal of all encumbrances before completion.

3. Choosing To Be Unrepresented In The Sale & Purchase Agreement

The SPA is a legally binding contract that outlines the terms of your purchase. Relying solely on a standard template or letting agents handle the paperwork without legal review exposes you to potential loopholes and unfair clauses.

The breach of certain terms under the SPA may lead to hefty penalties or significant delays.

Tip: Engage a trusted conveyancing lawyer to review or draft your SPA to protect your interests.

4. Relying Solely on Property Agents

While property agents can help with listings and negotiations, they are not qualified to advise on legal issues. Some may even downplay potential red flags to close a deal quickly.

Tip: Treat agents as facilitators, but always consult a lawyer for the legal side of things.

5. Underestimating Stamp Duty and Legal Fees

Many first-time buyers focus only on the purchase price and overlook the other costs involved. These include stamp duty, legal fees, disbursements, valuation fees, and loan agreement charges.

Tip: Ask your lawyer for a cost estimate breakdown so you can budget appropriately.

6. Not Understanding Property Restrictions and Express Conditions

If the property has a restriction in interest, the necessary consent must first be obtained before the property can be transferred. This process can take months. 

The express condition is a restriction or requirement imposed by the State Authority and stipulates the permitted use and activities that may be conducted on the land that must be complied with. 

Tip: check the title / land search to ascertain if there are any restrictions in interest. 

7. Failing to Time Loan and Transfer Properly

Mismatched timelines between your housing loan approval, SPA signing, and property handover can cause delays or breach of contract. If deadlines are missed, you could face penalties or be liable for breach. 

Tip: Appoint a lawyer early on and work closely with your lawyer to ensure all processes are coordinated with your bank and the seller’s solicitor.

Conclusion

Buying property should be an exciting milestone—not a legal nightmare. By avoiding these common mistakes and engaging an experienced conveyancing lawyer, you protect your rights, finances, and peace of mind.

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