Questions and answers
Question 1: I have purchased an apartment in Penampang in 2009. The sale and purchase agreement stated that the seller shall pay all outstanding interest payable to the developer, quit rent, assessments, rates and all other outgoings payable up to the date of full settlement of the purchase price. I have fully settled the purchase price. However last week, I received an assessment bill from the Penampang District Council which stated that the seller has not settled the assessment since 2002. I am shocked that the Council has not taken any action. How can I inform the Council that I am the new Purchaser and that I am only liable for the assessment after I moved in my apartment.
Answer: It is suggested that you write to the Penampang District Council enclosing a copy of the Sale and Purchase Agreement and Deed of Assignment (for properties without individual titles) and asking them to effect a change of ownership in their computer system. A sample letter informing the local authorities of the change of ownership in property is enclosed below:- Lapuran Penukaran Hak Milik Harta yang Bercukai Setiausaha Majlis Daerah Penampang. Saya (name of owner), pemilik (description of property) melapurkan bahawa bangunan tersebut di atas telah ditukarkan hak milik kepada (name of Purchaser) yang beralamat di [address] pada [date]. Tarikh: Saksi: K/P No.: Tandatangan (signature) of seller
Question 2: I am the owner of a piece of land in Tuaran. I have appointed my own lawyers while the buyers are using his own lawyers. I understand from my lawyer that the Purchaser asked for the retention of 5% of the purchase price as retention monies pending clearance from the Inland Revenue Department it should be 2%. Please clarify on this issue.
Answer: From 1 January 2010, the Real Propety Gains Tax Act 1976 has made a come back. Previously there was a statutory obligation on the part of the seller to retain 5% of the purchase price pending tax clearance from the Inland Revenue. However from 2010 onwards, this has changed. The Purchaser must now remit 2% of the purchase price within 60 days to the Inland Revenue Department. In other words, the Purchaser is to pay the monies upfront rather than keeping it as a steward for the tax authorities. The Real Property Gains Tax is now a flat rate of 5% regardless whether the seller is an individual or a company. However if five years have lapsed since the seller held the property, then there is no tax.
Question 3: Our company has a piece of Country Lease (CL) land in Kota Kinabalu. We are interested to exchange this land for two (2) pieces of industrial lots so that we can build a bigger warehouse. However we discovered that the two industrial lots are still under Native Title. How do we go about this obstacle?
Answer: Section 17 of the Land Ordinance clearly states that all dealings in land between natives and non-natives are expressly forbidden and no dealings shall be valid in a court of law. However the High Court decision of Borneo Housing Mortgage Finance Berhad v Bank Bumiputra Malaysia Berhad [1991] 2 MLJ 261 showed that this section can be circumvented by preparing a Trust Deed which is a valid document according to the case law. The reason of the Court is that a trust deed is not a dealing between a native and a non-native as it is governed by trust law. On the safe side, it is better if the native land can be converted to country lease first through a proper application to the relevant authorities.