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When do I get the keys to my property?

This is one of the questions I get asked at my public talks.

Getting keys to your property is also known as delivery of vacant possession.

Buying sub-sale properties

If you are buying properties from the sub-sale market, delivery of vacant possession takes place once the bank has disbursed the money to the seller and is usually between 3 months to 6 months.

Why 3 to 6 months? Once the SPA is signed and the balance 10% is paid, legal procedures will be initiated by our lawyers to start the title transfer process. This depends on whether –

1. it’s a leasehold property or a freehold property
2. the property is with strata title or without title

Buying from developer

A developer is required to deliver vacant possession (VP) within 24 or 36 months. If VP is delivered after the prescribe period, developer needs to compensate purchaser DAILY, unless extension of time is granted under the HDR 1989 (Read: When does time for delivery of vacant possession of property start?)

And the jury is still our when does the 24-month or 36-month period start. Is it from the date of booking fee paid? Or from the date of the S&P? (Read: When does time for delivery of vacant possession of property start?)

Of late I’ve been hearing delay in VP from my friends. There is one particular project that I am personally familiar with, was launched in January 2011, but has yet to deliver VP even today (October 2019)! And I’m still unsure when VP can be delivered as I write …

But for some of my friends who have, at last, get their keys ended up very happy. This is because, not only do they receive keys to their property, but also a big checked (in the region of 5 figures) from the developer.

As a property investor, I’ve always preferred buying from the subsale market as compared to from developer.

Not only do I get my property faster, I also get to receive my rental faster and this enable me to continue buying my properties and create more passive income.

If you have any questions or comment, feel free to drop me a personal reply or in the comment box below.

Talk soon!

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When does time for delivery of vacant possession of property start?

WHEN one buys housing accommodation from a developer in Malaysia, the terms of the sale and purchase agreement with the developer are prescribed by law (S&P), specifically the Housing Development (Control and Licensing) Regulations 1989 (HDR 1989).

Depending on the type of development, a developer is required to deliver vacant possession of the property (commonly referred to as VP) within 24 months or 36 months from the date of the S&P. If the VP is delivered after the prescribed period, the developer needs to compensate the purchaser for every day of the delay, unless extension of time is granted under the HDR 1989.

So, when does the 24-month or 36-month period start? From the date the booking fee is paid? Or from the date of the S&P?

This seemingly straightforward question has caused dispute between developers and home buyers. Past cases have held that for purposes of ascertaining the date of delivery of VP, time starts to run when the purchaser paid the booking fee.

These are the cases of Hoo See Sen & Anor v PUBLIC BANK BHD & Anor, 1988 (Hoo See Sen) and Faber Union Sdn Bhd v Chew Nyat Shong & Anor, 1995 (Chew Nyat Shong). The question then seemed settled.This position is beneficial to purchasers since the booking fee is usually paid before signing of the S&P. However, to be clear, the S&P prescribed under the current HDR 1989 in fact states that time starts from the date of the S&P.

So, when does time for delivery of VP actually start to run? The Court of Appeal has, in two recent cases, added some confusion to the seemingly settled question.

GJH Avenue case

In the recent judgement of GJH Avenue Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Ors (GJH Avenue case), the Court of Appeal clarified the words “from the date of this agreement” should be interpreted as the date of the S&P. In other words, the period for delivery VP commences from the date of the S&P. Therefore, the sooner one signs the S&P, the earlier one can expect to get VP.

Case background

In the GJH Avenue case, the purchasers bought a bungalow from the developer and paid the booking fee to the developer on Nov 24,2011. The statutorily prescribed S&P for the bungalow was signed on Feb 13,2012. The S&P requires VP to be delivered within 24 months “from the date of the agreement” and VP was delivered on Feb 14,2014. As the S&P was dated Feb 13,2012, the developer compensated the purchaser for the two-day delay.

The purchasers subsequently initiated a claim with the Tribunal for Homebuyer Claims (Tribunal) for a higher sum and the Tribunal granted the award. Dissatisfied with Tribunal’s decision, the developer filed a claim (by way of judicial review) to the High Court to set aside the Tribunal’s award.

High Court findings

The High Court did not find any illegality in the Tribunal’s decision and had instead decided that the Tribunal had applied the law to the facts correctly. This was on the basis that the Tribunal had taken into account two previous decisions of the High Court, which in turn relied on the decision of the Supreme Court (as it then was) in Hoo See Sen and Chew Nyat Shong. The High Court believed that the Tribunal is bound by the Supreme Court in those cases. Following this outcome, the developer filed an appeal to the Court of Appeal.

Decision of the Court of Appeal

On appeal, the Court of Appeal decided that the Tribunal had acted beyond the scope of the Tribunal’s powers under the HDR 1989 in making the award. This resulted in the award being tainted with illegality. The Court was of the opinion that the Tribunal had made an error of law when making the decision as the relevant clause in the S&P was very clear and unambiguous. The Tribunal should have just applied the law by giving plain meaning to the words in deciding the purchasers’ claim, without sieving through various authorities to justify the findings.

This also follows the Court’s earlier decision in Kompobina Holding Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Ors & Anor (Kompobina case), where the Court upheld the decision of the Tribunal that the timeline for delivery of VP is 24 months from the date of the S&P although the deposit was paid more than one year after the S&P was signed.

PJD Regency case

In the second decision of PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Ors (PJD Regency case), delivered just two days after the GJH Avenue case, a separate panel of the Court of Appeal decided that the time for delivery of VP actually starts to run from the date the purchaser paid the booking fee and, not the date of the S&P.

Case background

In this case, the purchaser paid a booking fee to the developer on Jan 16,2013. The time for signing of the S&P lapsed but the parties proceeded to sign the S&P on March 21,2013. The developer delivered vacant possession on Jan 23,2017, which was later than the 42 months contracted under the S&P. The Tribunal calculated the time for delivery of VP from the date of payment of the booking fee and awarded the purchaser damages for late delivery accordingly. The developer applied by way of judicial review to the High Court to set aside the Tribunal’s award.

High Court’s decision

The High Court applied the case of Chew Nyat Shong and, agreeing with the decision of the Tribunal, dismissed the developer’s application. The developer appealed to the Court of Appeal.

Decision of the Court of Appeal

The Court of Appeal agreed with the decision of the High Court and dismissed the appeal. The Court of Appeal affirmed that the case of Chew Nyat Shong was binding. This decision meant that the time for delivery of VP actually starts to run from the date the purchaser paid the booking fee and, not the date of the S&P.


The result of both the GJH Avenue and PJD Regency cases is that it is now uncertain as to when the period for delivering VP starts from. With these conflicting decisions, we will have to wait for the Federal Court to resolve the question.

In the writer’s opinion, the decision in the GJH Avenue case is preferred. It is a move in the right direction, and reflects the original intention of Parliament when enacting this piece of social legislation in the Housing Development (Control And Licensing) Act, 1966 which outlawed the collection of any monies by a housing developer from a purchaser other than at or upon the signing of the S&P, which was then prevalent to the detriment of house buyers.

May Chua, a lawyer practising at Messrs Wong & Partners, is a member of the Conveyancing Practice Committee, Bar Council, Malaysia. This column does not constitute legal advice and the views expressed are solely that of the writer.

Source: The Star

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PEPS: Remove 5% RPGT for property disposal from 6th year

PETALING JAYA (Oct 4): The Association of Valuers, Property Managers, Estate Agents and  Property Consultants in the Private Sector Malaysia (PEPS) is urging the government to review the current Real Estate Property Gains Tax (RPGT) so it can have a positive impact in stimulating  the country’s  housing market.

Stating its Budget 2020 wish list in a press release today, the association said property ownership from the 6th year onwards should no longer be deemed as speculative investment hence, the 5% RPGT on such property ownership among individual Malaysians or permanent residents should be withdrawn.

As for foreign individual owners and companies, the current RPGT of 10% for the property disposal from the sixth year onwards, should be reduced to 5%, the group said.

“The removal and reduction of the RPGT after the fifth year will indirectly stimulate the property market and encourage more buyers and investors to re-enter the property market and this will also assist to reduce the property overhang and help developers to reduce the supply of unsold units in the secondary market,” it said.

The association also hoped that Putrajaya will consider reducing the stamp duty rate for property transactions worth RM1 million and above to 3.5%, from the current rate of 4%.

To help more people own homes and to stimulate the market further, PEPS suggested that first time homebuyers of properties below RM500,000 be given 100% loan while the margin for the third  property onwards be increased to 80%. To ease lending eligibility, the government should allow more funds from the borrower’s EPF Account 2 to be withdrawn for the purchase of affordable homes.

The association also  proposed that the government set up a National Centralized Corporation on Affordable Housing to plan, coordinate and implement the government’s  blueprint and plans on affordable housing nationwide while working with state governments and developers on affordable housing matters.

The business model could be based on Singapore’s Housing Development Board.

“Existing agencies involved in affordable housing such as PR1MA could be absorbed under this new corporation,” it added.

To reduce the property overhang in the market, the association suggested a fast release mechanism of Bumiputera units to make the unsold units available in the open market.

PEPS also felt that there is a need to attract foreign buyers to ease the overhang. Hence it proposed that the government reduce the financial criteria required for foreigners to apply for the Malaysia My Second Home (MM2H) Visa Permit by lowering the liquid assets amount required.

State governments should also consider lowering the minimum threshold for foreigners to own properties in Malaysia, such as from RM1 million to RM800,000 in Kuala Lumpur and from RM2 million to RM1 million in Selangor.

PEPS also hoped to see the upcoming Budget 2020 offer more tax incentives and allowances to property developers or contractors who adopt the Industrialised Building System (IBS).

“At the moment only new IBS manufacturers or companies with pioneer status are given tax exemption and tax allowance,” it noted.

Source: The Edgeprop

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Penang govt ready to reduce assessment rates for certain cases

GEORGE TOWN, Oct 1 — The Penang government is ready to consider reducing the assessment rates for certain categories of ratepayers after the review exercise, said its Housing, Local Government and Town and Country Planning Committee chairman Jagdeep Singh Deo.

“I’m not saying that it applies to everyone but to those who have a legitimate reason. We are currently gathering objections and appeals,” he told reporters after a briefing on the review of property assessment rates here today.

He said all ratepayers have until Oct 14 to submit their appeals to their respective city council against the assessment rate review.

Jagdeep, however, did not disclose the amount of the deduction that would be given and stressed that it only applicable to specific cases.

It was reported that beginning 2020, all property owners in the state would have to pay higher assessment rates.


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Budget 2020: Hopes for affordable housing allocation for Penang

GEORGE TOWN, Oct 1 – Penang Housing, Local Government, Town and Country Planning Committee chairman Jagdeep Singh Deo hopes a certain percentage from the upcoming Budget 2020 will be allocated for public amenities, particularly affordable housing.

He said that one of the state government’s main targets was to achieve 180,000 units of affordable housing in Penang, but none of the 102,335 existing units and ongoing projects were built by the Federal government.

He also expressed his disappointment that the Federal Government proposed to scrap the affordable housing development projects such as the 1Malaysia People’s Housing Programme (PR1MA), the National Housing Company (SPNB) and the 1Malaysia Civil Servant Housing Scheme (PPA1M), as it was deemed not cost-effective.

“Unless the Federal Government can agree to either build more affordable houses in Penang or to set aside some percentage of our taxpayer’s money for affordable housing,” he said in his speech during a workshop on affordable housing here today.

He also hoped that the Housing and Local Government Minister Zuraida Kamaruddin would uphold the responsibility of delivering affordable housing to not only Penang, but to all states in Malaysia.

Meanwhile, Jagdeep also hoped that the high rate of loan rejection could be reduced, especially among buyers purchasing low cost (LC) and low-medium cost (LMC) units as their first home.

He said that commercial banks have categorised these first time home-buyers as “high risk” due to their low income.

“It is a catch-22 situation, because we have set the guidelines that people with low incomes are allowed to purchase LC or LMC units,” he said in a press conference, adding that seven out of 10 loans were rejected.

He added that an official letter from the state Chief Minister Chow Kon Yeow regarding the 2020 Budget wish list had been sent to Putrajaya.

The budget would be tabled by Finance Minister Lim Guan Eng on Oct 11.


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Penang exco: Deadline to appeal assessment rate review final

GEORGE TOWN, Sept 27 — The Penang government will not extend the deadline for ratepayers to submit their appeals or objections against reviews of their property assessment rates, said state exco Jagdeep Singh Deo.

The local government, housing and town and country planning committee chairman said ratepayers must submit their objections and appeals by October 14.

“The notice of the review was sent out some time ago so they had enough time to submit their appeals, it was a simple process,” he said.

He said the notice came with a section for ratepayers to fill in their objections that they could then submit to their respective city councils.

“After they submit their appeals, the city councils will process it and then call them in for hearing on their appeals so they will need to present their grounds for their appeal then,” he said.

Both the Penang Island City Council (MBPP) and Seberang Perai City Council (MBSP) notified ratepayers in the state of a review of property assessment rates for 2020 about two weeks ago.

In the review, the annual value of properties have been updated so the assessment rates were reduced to mitigate the impact of higher annual value.

Jagdeep, in announcing the review, said both councils have not reviewed the rate and annual value of properties for 15 years.

The review caused an uproar as ratepayers claimed the amount they had to pay had increased between 60 to 98 per cent.

In a bid to explain the calculations behind the review of the annual value for properties, MBPP will set up information booths at nine locations for the next three weekends.

There will be booths at Gurney Paragon, Queensbay Mall, Tesco Jelutong and Balik Pulau Market on September 28, October 5 and October 12 from 11am to 9pm.

There will be booths at Gurney Plaza, Tesco Tanjung Tokong, Sunshine Square Bayan Baru, Sunshine Farlim and Balik Pulau Market on September 29, October 6 and October 13 from 11am to 9pm. The booth at the Balik Pulau Market will be open from 7.30am to 1pm.

Jagdeep said MBSP will also set up information booths on the mainland to assist ratepayers in Seberang Perai.

Source: The Malay Mail

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Investing In Penang Property

In this article I will be sharing about the Penang’s property market and how I look at the island and its potential for growth.

If you don’t already know, I’m not originally from Penang. My hometown is Malacca. I moved to Penang in 2001 and started investing in Penang’s property since 2005.

I now share with my student how to invest in property in Malaysia and especially so in Penang.

One of my graduates (who is also a blogger) Elvin has asked me the following questions, which I’ve make a video and shared it here:

Penang's Area of Growth

Do you want to know how I look at Penang's property market?Watch this video to know moreThis is a short overview about the area of growth for properties in Penang#kaygarntan #empoweringyourdreams #propertyinvestment #propertyinvestor #propertyinvestmentcoach #themasterkeymethod #penang #propertymarket #overview #area #of #growth

Posted by Kaygarn Tan – Property Investment Coach, Speaker and Author on Tuesday, 4 September 2018


If you prefer to read instead of watching the video, the transcript of the video (with additional points) is as below:

How long have you been studying the property market in Penang? And where are the top 5 areas in Penang that you see the most significant growth?

I started investing in Penang’s property since 10 years ago. And since I turned full time investing in properties, I started in depth analyzing and researching Penang properties 5 years ago. And I have compiled these data into several reports for e.g. Property Hotspots in Penang. I continuously study and update the data and have produced several ebooks related to property investment.

Kaygarn Tan Property Investment hotspots report


In doing my research and study, I use a lot of check list and tools. One of the tools I use is the Penang Map. Now, let us look at the Penang Map and let’s focus on Penang Island. I would “divide” Penang Island into 4 parts, North, South, East and East. West Penang is Balik Pulau and East Penang is really where it’s most happening and where both “growth” and “development” is.


We can further divide East Penang to North East and South East; using the first Penang bridge as the guide.

Kaygarn Tan invest in penang property

So, North East will encompass Glugor, Batu Ferringhi, Tanjung Tokong and Tanjung Bungah. All these are places are what I call “mature” areas. The main economic activities in North East are tourism and this includes Medical Tourism and Hospitality Tourism.

Kaygarn Tan invest in penang property

Another area in North East is Georgetown, which is well known as a UNESCO Heritage site. There are areas within Georgetown that is delineated as Core zone, buffer zone and pre-war houses. The activities in all these places are tourism, whereby there are a lot of street art, heritage walk and heritage tour, where people explore about heritage houses in Georgetown.

georgetown unesco heritage site

Moving to the South East, we will reach the growing area of Bayan Baru, which is one of the satellite city here. Moving further to the South, is the Bayan Lepas Industrial Area, Batu Maung, Teluk Kumbar and Gertak Sanggul.

Kaygarn Tan penang free trade industrial zone

These are the growing areas. The reason these are growing areas is because of the 2nd link bridge that linked Batu Maung and Batu Kawan. This link will bring population to come into the island gradually, towards the southern area.

This is, in a snapshot, the growing area and mature area of Penang Island

Now, let’s cross the bridge and go into the mainland.

Kaygarn Tan Property Investment penang bridge

Penang Mainland is divided into 3 major areas – Seberang Perai Utara, Seberang Perai Tengah, and Seberang Perai Selatan. Looking at the Seberang Perai Utara, there’s the Bertam township, which is a growing area; all the way to Seberang Jaya (in Seberang Perai Tengah) which is a mature area. Moving further south, there’s the satellite township of Batu Kawan, which is a well-planned township, and it’s a growing area.

Kaygarn Tan batu kawan property investment

As a summary, if you want to invest in Penang property, you will need to understand which area are growing and which is mature. Additionally, by understanding the economic activities in the different areas, you will know who your future tenant/ potential buyer will be.

If you have any questions, feel free to comment on the box below.

Happy Investing!

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Close to 40% of unsold completed properties were priced below RM400k

KAJANG (Sept 23): Close to 40% of the overhang residential properties recorded in the country are made up high-rise units priced below RM400,000, according to latest data released by the National Property Information Centre (Napic) today.

The data showed that the number of overhang residential properties as at 1H2019 has accumulated to 32,810 units worth RM19.76 billion, an increase of 1.5% in volume whilst the value decreased by 0.5%, as compared to 32,313 units worth RM19.86 billion in 2H2018.

Of the overhang homes, about 43% are condominiums or apartments. A majority of the overhang homes are priced at RM200,001 to RM300,000 (22.3%), followed by RM300,0001 to RM400,000 (17.5%) and more than RM1 million (12.8%).

The increased number of affordably priced residential properties remained unsold has also caught the authorities’ attention.

“This is something that perhaps we didn’t expect. We thought that overhang homes were those that are priced above RM1 million but actually most of them are condominiums and priced at RM200,000 to RM300,000, which are categorised as affordable houses,” said Deputy Finance Minister Datuk Wira Amiruddin Hamzah.

He was speaking at the media conference after the briefing concerning the property market for 1H2019 and the launch of the Unsold Property Enquiry System Malaysia (UPESM) 2.0.

According to the definition by Napic, overhang properties are those which have received Certificate of Completion and Compliance (CCC) but remained unsold for more than nine months after launch.

Meawhile, Amiruddin noted that the authorities would need to investigate further to find out the reasons for overhang.

“The relevant ministries and agencies must further study this to ensure that there is no mismatch and come up with a solution that enables the rakyat to own a home that is affordable to them while developers are offering homes that are wanted by the people, so that our economy will continue to grow,” he added.

Source: The Edge

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Malaysia to cut interest rate in Dec

KUALA LUMPUR: Malaysia’s export momentum has outperformed in South-East Asia, according to the Institute of Chartered Accountants in England and Wales’ (ICAEW) latest Economic Update: South-East Asia report.

The momentum it said, reflected a more modest deceleration in export growth and resilient domestic demand, comparing the growth of trade-dependent economies such as Singapore, Thailand and the Philippines which have seen slower momentum in the second quarter of 2019.

“However, despite the outperformance of the Malaysian economy to date, Bank Negara is expected to lower interest rates by 25 basis points (bp) in December, with a further 25 basis points cut in the first quarter of 2020.

“This is provided that the government will continue to focus on fiscal consolidation in the upcoming budget announcement on Oct 11, ” the report said.

ICAEW economic advisor and Oxford Economics lead Asia economist Sian Fenner said: “Amid ongoing global headwinds and uncertainty around the outcome of US-China trade talks, we expect to see a further deterioration in economic prospects across the region, particularly amongst more trade-dependent economies.”

Overall, regional gross domestic product (GDP) growth is expected to moderate to 4.5% this year, amid another round of tariffs and trade restrictions by the US and China with the GDP to stabilise at the same rate in 2020.” — Bernama

Source: The Star

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Long road to recovery for property sector

KUALA LUMPUR: Alliance DBS Research estimates that Malaysia’s property market will need at least another three years to absorb the unsold properties, assuming status quo in historical transaction volume.

“Therefore, a meaningful recovery for the property market is only expected by 2023, ” it said in a research note on Thursday.

It said the large and growing property supply overhang remains the key stumbling block for the sector’s recovery, resulting in weak sentiment among buyers and investors.

“Based on data from the National Property Information Centre (NAPIC), we estimate that Malaysia’s property market will need at least another three years to absorb the unsold properties, assuming status quo in historical transaction volume, ” it said.

The supply glut will only intensify the competition among developers as weaker players could adopt a more aggressive pricing just to monetise their unsold units.

In addition, depressed rental yields may further discourage investors from entering the market, exacerbating the already weak sentiment in Malaysia’s property market. Heightened external uncertainties also continue to undermine confidence with the anticipation of an economic slowdown.

“Property stocks are currently trading at multi-year low at 0.49 price/book value (P/BV) which is two standard deviation below its 10-year mean, pricing in the worst case scenario.

“While there is a lack of imminent catalysts, we continue to favour developers with clear earnings visibility and decent dividend yields to tide over the challenging times.

“We like Sunway for its focus on sustainable township developments with multi-disciplinary expertise which has resulted in superior integrated ‘build-own-operate’ model with a proven track record.

“It is set to resume its growth trajectory with projected FY18-20F earnings compound annual growth rate (CAGR) of 8%, contributed by strong performance across its key divisions in property development, construction, healthcare services and investment property, ” it said.

Source: The Star