However, to make wise property decisions, it’s important to understand every single one of these complexities.
Ethan Leong, director of the Malaysian Institute of Estate Agents (MIEA) and CEO of WEREG Properties, has been a key figure in Malaysia’s property sector for over 18 years.
Since 2010, he has been a councillor, committee member, and accredited speaker at MIEA, training over 40,000 real estate negotiators through the Professional Negotiator Certification Course (NCC).
Today, he shares his expert advice with FMT readers, so you too can learn how to protect your property investments legally.
Get your own lawyer (and a good one too!)
One major pitfall when it comes to buying or investing in property is the assumption that estate agents alone will suffice for legal advice.
Leong explained a real estate lawyer plays a crucial role in ensuring that all legal documents are in order, representing your interests during negotiations, and helping navigate complex legal requirements.
“While agents are helpful, buyers should also rely on qualified lawyers or solicitors,” said Ethan.
He quickly warned against over-reliance on lawyers who are friends and family members, assuming everything will be alright.
According to Leong, buyers should engage “professional and well-versed lawyers” familiar with local land regulations, restrictions, and challenges.
“Avoid using the same lawyer as the seller to prevent conflicts of interest and to ensure you’re not unrepresented. Some people do this to cut costs. Don’t. It is dangerous and you can be unprotected,” Leong advised.
Regularly following up with your lawyer, especially after the signing of the Sale and Purchase Agreement (S&P), is crucial to ensure all legalities are properly addressed according to the timeline.
Do a thorough background check
Leong urged first-time property investors to conduct thorough due diligence and market research before forking out any money. This includes checking the developer’s background, including any blacklisting by the Ministry of Housing and Local Government (KPKT).
“Online reviews and past project performances can provide additional insights,” he noted.
Utilising government resources and financial databases to verify the developer’s credibility and project compliance is also advisable.
Leong stressed the importance of verifying the credentials of the real estate negotiator through the official Board of Valuers, Appraisers and Estate Agents Malaysia website.
“Check their tag to see if they are indeed registered,” he said.
He also warned against transferring payment to the negotiator’s personal account instead of the agency’s account just to avoid the Sales & Services Tax.
“Avoid transferring funds to personal accounts to sidestep additional taxes. Instead, make payments directly to the company’s account to maintain a secure transaction trail.”
Find out if there are pre-existing defects and covenants
For the purchase of property from the secondary market or sub-sales, Leong said checking for any property defects is an absolute must.
“Normally, people would only ask about the price first. This is not right. You also need to find out if the property has any defects. Your agent should be able to get this information from the vendor/seller,” said Leong.
More importantly, Leong advised checking for any pre-existing covenants signed by the vendor/seller.
“Many people miss out on this but it’s important. If the vendor/seller had signed a mutual covenant before, this would apply to you as the purchaser as well. It will affect you.
“So, get your agent to check the principal S&P and look for any complications and implications,” Leong said.
With these crucial tips in hand, you will now be in a better position to make informed decisions when purchasing or investing in your next property.
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