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Understand the title deed when buying a property in Malaysia

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Looking into property investment in Malaysia is intriguing. The market has diverse options, including tropical villas, urban apartments, and beachfront properties with great potential.

However, international buyers may find it challenging to navigate the Malaysian real estate market, particularly when verifying the authenticity and legality of the "Geran Tanah," which serves as the official title deed in Malaysia.

We have actually covered this specific document (among others, like the sales contract) in our property pack for Malaysia.

In this article, we will give some insight to ensure a smooth and legally compliant property transaction in Malaysia.

However, please do not forget that this blog post is for informational purposes only and that we are not legal experts. It's always advisable to consult with one. They can indeed thoroughly examine your specific situation and provide you with the most appropriate and tailored advice.

What is the Geran Tanah in Malaysia?

The "Geran Tanah," also known as "Geran Harta Tanah," is a vital legal document in Malaysia pertaining to real estate ownership.

Think of it as a government-issued certificate that provides definitive proof of property ownership. It's essential in real estate transactions and distinguishes itself from other property documents by being the primary and most authoritative record of land ownership.

One key aspect of the Geran Tanah is the legal rights it confers to the property owner. It grants the owner the right to use, manage, and dispose of the property. This includes selling, leasing, or mortgaging the property.

Also, it's a reliable document, backed by the Malaysian government, ensuring that the information it contains about the property's ownership, size, and boundaries is accurate and legally binding.

However, the Geran Tanah does have its limitations. It does not grant any rights over the airspace above or the subsurface below the property, unless specifically mentioned.

It's also important to note that owning a property doesn't automatically confer rights to conduct any type of activity on it. Local zoning laws and regulations might restrict certain uses of the property.

In terms of resale and inheritance, the Geran Tanah plays a crucial role. For resale, it's the primary document required to transfer ownership.

Without it, selling property is practically impossible in Malaysia. For inheritance, the Geran Tanah ensures that property rights can be smoothly transferred to heirs in accordance with Malaysian inheritance laws.

For foreign investors, understanding the Geran Tanah is crucial. While they can own property in Malaysia, there are specific guidelines and limitations, such as minimum purchase values and locations where foreign ownership is allowed.

The Geran Tanah ensures that foreign investors have the same rights as local owners, within the framework of these regulations.

However, they should be aware of additional rules that might apply to them, especially regarding the repatriation of funds and tax implications.

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How to verify a title deed in Malaysia?

The process

Verifying the authenticity of a Geran Tanah, the property title deed in Malaysia, is essential in real estate transactions.

You can indeed verify it to safeguard against fraud and ensure the deal's legitimacy.

To start, the Land Office (Pejabat Tanah) or the Land Registry in the Malaysian state where the property is located is your go-to government body.

Each state's Land Office holds the records of all registered land. When you request a search for a specific property, they provide a report detailing the legal owner, any encumbrances, and other crucial information. It's important that these details match the ones on the Geran Tanah.

Lawyers, especially those specializing in property law, are invaluable in this process. They can not only interpret the information from the Land Office but also provide legal guidance based on their findings. They ensure that all legal procedures are correctly followed during the transaction.

Real estate agents, while helpful in locating and negotiating deals, are generally not qualified to verify Geran Tanah. Their expertise lies more in the commercial aspects of real estate.

However, they should be able to point you to the right legal and government resources for verification.

Identifying red flags and avoiding scams is crucial. Be cautious if the details on the Geran Tanah don't match the Land Office records.

A seller's reluctance to provide the original document for verification or to allow a Land Office search is a warning sign. Beware of pressure tactics intended to rush the transaction, as legitimate deals usually allow time for thorough due diligence.

Be skeptical of unsolicited property deals or offers that seem overly favorable.

Lastly, always verify the identity of the person you're dealing with to ensure they are the legitimate owner or are authorized to act on their behalf.

In property transactions, especially in a foreign setting like Malaysia, being cautious and seeking professional legal assistance are key to protecting your interests.

Conducting comprehensive due diligence is the best way to prevent potential fraud.

What to check

Accessing, tracing, and interpreting the history of a property in Malaysia through its Geran Tanah is a crucial part of any real estate transaction.

To delve into a property's history, you start with the Land Office or Land Registry of the area where the property is located. They maintain detailed records of all transactions and ownership changes.

By requesting a historical search or report, you can get a comprehensive view of the property's past transactions and ownerships.

Understanding the property's history is important for several reasons. It helps in identifying any patterns of disputes or recurring issues with the property. It also provides insight into the property's market value trends over time. This knowledge is essential for making informed decisions about the property's potential and any risks involved.

Checking for outstanding debts or liens is another critical step. These can include unpaid mortgages, taxes, or other legal encumbrances that might still be attached to the property. The Land Office records will show any such encumbrances. If a property has debts or liens, they can significantly impact a new owner.

In some cases, the new owner might become responsible for settling these debts, which can affect the property's value and your financial planning.

Verifying the accuracy of property measurements and boundaries as stated in the Geran Tanah is also essential. For this, you can compare the details on the Geran Tanah with physical surveys and land measurements done by certified surveyors.

If there are discrepancies, resolving them might involve legal proceedings or negotiations with neighbors or previous owners. It’s crucial to resolve such issues before finalizing any property transaction to avoid future disputes or legal challenges.

Finally, understanding zoning laws and land use restrictions is key to utilizing the property as intended. Local municipal councils or planning departments are the best sources for this information.

They provide guidelines on what activities or developments are permissible on the property. This is especially important if you plan to develop or significantly alter the property, as non-compliance with zoning laws can lead to legal issues or financial losses.

After our research and the feedback collected from our local real estate partners, we have written an article about the risks and pitfalls when buying a property in Malaysia, you might want to check it out.

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How to update the title deed after the property transaction in Malaysia?

Once you've purchased a property in Malaysia, updating the title deed, or Geran Tanah, is a critical step.

This process officially records you as the new owner of the property. To update the title deed, you need to go through a few specific steps.

First, the transfer of ownership must be documented in a Sale and Purchase Agreement, which is then presented to the Land Office or Land Registry. The Land Office oversees all such transactions and is responsible for updating the Geran Tanah.

Along with the agreement, you'll need to provide proof of payment, identity verification documents, and any other paperwork requested by the Land Office. They will process these documents and issue a new Geran Tanah in your name. This process can take some time, so patience is key.

Regarding insurance and additional protections, once the title deed is verified and the property is purchased, there are a couple of things to consider. Property insurance is highly advisable to protect your asset against damage, theft, or natural disasters.

Additionally, you might consider title insurance, which protects against any legal issues that might arise with the title in the future, like undiscovered liens or documentation errors.

For foreign owners, understanding the implications of the title deed concerning inheritance laws is important. Malaysia's inheritance laws can be complex, especially for foreigners.

Typically, Malaysian law applies to properties located in Malaysia, but the inheritance of these properties can be influenced by the nationality and domicile of the owner. It's advisable for foreign owners to have a clear will or estate plan that aligns with Malaysian laws to ensure their property is inherited as intended.

Consulting with a legal expert in Malaysian property and inheritance law is crucial to navigate these complexities and ensure your property is handled according to your wishes after your passing.

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This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.