Guide to Legal Conveyancing: SPA Contract Terms, Fees and More
Frazzled by the very term “conveyancing”? Let us save you that Google search. For those of us who are not exposed to legal services on the daily - and no, binge-watching Suits doesn’t count - seeking legal services can seem like a far-fetched stage of your home transaction process and as such, many home buyers can’t figure out what it means nor what it does. Legal representation and conveyancing is an integral part of buying or selling a property. If you want to be demystified on the role conveyancing plays when buying a property in Malaysia, this article is for you.
What is conveyancing all about?
Conveyancing is when a legal title of a property or land and the payment of the price is successfully passed over from vendor to the purchaser (i.e. owner to the buyer) and this process is overseen by a lawyer. This involves mainly two things which are the drawing up of contracts (i.e. the sales and purchase agreement or SPA) and the completion stage when the contracts are consensually signed and the property is passed over, finalising the purchase.
What are the terms in a sale and purchase agreement?
In a run of the mill SPA, the agreement terms would appoint the buyer to pay 10% of the property sale price upon signing the contract. The remaining amount can either be paid over a specified period of time via installments or with a lump sum - whichever was agreed upon between the two parties.
How much do I need to pay when I hire a lawyer to draw up the SPA?
It depends on the price of the property. Say you’re looking to buy a terrace house in Subang Jaya for RM750,000 and have appointed a lawyer to draw up your SPA. The legal fees would add up to RM2,500. But that’s not all there is to it. The legal fees you’re paying for also covers the registration of transfer or assignment and the documents needed to process your SPA such as your financial/loan documents.
Here’s how the fees are calculated according to the Solicitors’ Remuneration Order 2005:
|Consideration or Adjudicated Value (whichever is higher)||Conveyancing Fees|
|For the first RM500,000.00||1.0% (min. fee of RM500)|
|For the next RM500,000.00||0.8%|
|For the next RM2,000,000.00||0.7%|
|For the next RM2,000,000.00||0.6%|
|For the next RM2,500,000.00||0.5%|
|Where the consideration or the adjudicated value is in excess of RM7,500,000.00||Negotiable on the excess (but shall not exceed 0.5% of such excess)|
Do note that there’s also a stamp duty fee of RM10!
Whether you’re buying or selling, conveyancing is part and parcel of any home transaction journey. To avoid any unfortunate bamboozled mishaps and secure quality legal service, we advise you to put in the homework and find a credible and trustworthy law firm to handle the processing of your SPA.
Have more questions about conveyancing? Call us now at +6016 299 1366 to get in touch with our friendly property experts.
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