Buying an Auction Property with a Tenant: What You Must Know

Buying a bank auction (lelong) property can be a great way to get a home below market value. But what if the property still has a tenant or occupant living inside? This situation is more common than you think and can be tricky. In this article, we explain your rights, the eviction process, and how to handle a tenant when buying a lelong property in Malaysia.

Understanding Vacant Possession in Auction Properties

When you win a lelong property, the court will issue a Proclamation of Sale that states whether the property is sold with vacant possession or not. If it says "vacant possession," the previous owner (or tenant) must leave. However, even with vacant possession, you may still face occupants who refuse to move. It's crucial to check the auction conditions carefully.

Your Rights as a Buyer

As the successful bidder, you are entitled to vacant possession after the sale is finalized. If the tenant or owner remains, you can take legal action. In Malaysia, the process is governed by the National Land Code and the Specific Relief Act. You can apply for a court order to evict the occupant. However, this takes time and money. Always factor in potential legal costs when bidding.

The Eviction Process: What to Expect

If you need to evict a tenant or occupant, here are the typical steps:

• Notice to Vacate: First, send a formal notice demanding the occupant to leave within a specified period (usually 14 to 30 days).
• Court Application: If they don't leave, you must file an application in court for an eviction order.
• Writ of Possession: Once the court grants the order, you can apply for a Writ of Possession, which allows the bailiff to remove the occupant.
• Execution: The bailiff will set a date to physically remove the occupant and hand over the keys to you.

This process can take 3 to 6 months or longer. Legal fees can range from a few thousand to tens of thousands of ringgit.

Tips for Bidding on Auction Properties with Tenants

• Check the Proclamation of Sale: Look for any mention of tenancy or occupancy. If there is a valid tenancy agreement, it may be binding on you.
• Visit the Property: Try to see the property before the auction. Talk to neighbors or the tenant if possible.
• Factor in Costs: Include potential legal fees and carrying costs (maintenance, loan interest) in your budget.
• Consider Cash Buyer Advantages: If you pay cash, you may get the title transfer faster, which can speed up eviction.
• Get Professional Help: Work with an experienced auction agent like Peter Tan at BidNest. They can guide you through the process and help you avoid pitfalls.

Conclusion

Buying a lelong property with a tenant is risky but can be rewarding if done right. Always do your due diligence, understand your rights, and be prepared for a possible eviction process. For expert advice on auction properties in KL and Selangor, contact Peter Tan at BidNest. Browse our listings today to find your next investment.