Property Problems and Red Flags

Most of the property problems that reach our desk were avoidable. Not because people were careless, but because they did not know what to check before signing.

This page sets out the situations that most often lead to loss, and what to do when you come across one.

Stop if you see any of these

• Asked to pay a substantial deposit before any search is done. An official title search reveals charges, caveats and restrictions in interest. It should happen before money changes hands, not after.
• Asked to pay the seller directly rather than a stakeholder. A deposit should be held as stakeholder money and released only when the conditions are met.
• The name on the title is not the name of the person selling. This can mean the property is still in a deceased owner’s name, or that the seller is acting as an agent without proper authority.
• There is a caveat on the title. A caveat blocks registration. It has to be removed before the transfer can be registered.
• The title carries a restriction in interest. The transfer will require State Authority consent, which takes time and is not guaranteed.
• You are pressed to sign the same day. Time pressure is the most common way people are made to skip checks.

Why the title search matters

An official title search shows who the registered proprietor is, whether there is an undischarged charge, whether a caveat has been entered, and whether a restriction in interest limits dealings. One search before signing can save months of trouble.

Caveats are entered under the National Land Code 1965 and operate to prevent registration of dealings until removed. If you buy a property carrying a caveat without resolving it first, you may be unable to register the transfer even after paying in full.

When to stop and take advice

Take advice before, not after, if any of these apply:

• The registered proprietor has died and the estate has not been resolved
• The seller is acting through a power of attorney
• The property is being sold below market value for reasons that are not clear
• The purchase involves a Bumiputera reserve lot and the buyer is not Bumiputera
• You have already paid and the matter has stalled with no explanation
• The other side will not give you a copy of the title or details of the registered proprietor

Guides by problem

If you have already paid and the matter has gone wrong

Your options depend on what the agreement says and how far the matter has progressed. In some situations entering a caveat can protect your interest while the issue is resolved. In others the answer lies in the termination terms of the agreement itself.

Bring whatever documents you have, even if incomplete. Receipts, WhatsApp messages and booking forms are all useful in working out where you stand.

Frequently asked questions