Strata Title in Malaysia: The 1985 Act, Costs and Auction Condos
Key Takeaways
- A strata title is a title for one parcel in a building or strata scheme, not for the whole land.
- The main law is the Strata Titles Act 1985 (Act 318) for Peninsular Malaysia and Labuan. Building management falls under the Strata Management Act 2013 (Act 757).
- You own your parcel and share the common property, such as lifts, pool and land, according to your share units.
- Transfer costs are stamp duty, legal fees and registration fees.
- For an auction unit, check whether the strata title has been issued and how much maintenance is in arrears.
What is a strata title?
In a high-rise, many owners share one lot of land. A strata title gives each owner a separate title for their parcel. They can sell, charge and transfer it like any other property. The land and shared areas such as lifts, stairs and facilities become common property.
What is written on a strata title?
| Section | What it means |
|---|---|
| Parcel, storey and building number | Your unit in the scheme |
| Parcel area | The registered area |
| Accessory parcel | For example a car park owned with the unit |
| Share units | Your share of the common property, and the basis of maintenance charges |
| Registered owner | Names and shares |
| Memorials | Charges, caveats and restrictions |
Strata Titles Act 1985 and Strata Management Act 2013
These two Acts cover different things:
- The Strata Titles Act 1985 (Act 318) governs the subdivision of buildings, the issue of strata titles, parcels and share units.
- The Strata Management Act 2013 (Act 757) governs how the building is run: the Joint Management Body (JMB), the Management Corporation (MC), maintenance charges, the sinking fund and action on arrears. The Commissioner of Buildings (COB) oversees this locally.
In short, the title says what you own, and the management body says what you pay every month.
What if the strata title has not been issued?
In some projects the strata title is still not out, even years after completion. The buyer's rights then rest on the agreement with the developer and an assignment to the bank. These homes can still be sold, but the paperwork differs and takes longer. Ask a lawyer about the title status before you pay anything.
How much does a strata title transfer cost?
| Cost | How it is worked out |
|---|---|
| Stamp duty on the transfer | 1% to 4% scale on the higher of price and market value |
| Legal fees | SRO 2023 scale, plus 8% service tax |
| Stamp duty on the loan | 0.5% of the loan |
| Registration and search fees | Set by the land office |
| Maintenance arrears | From the management body's statement |
Estimate with the stamp duty calculator and legal fee calculator. For example, a RM600,000 unit carries RM12,000 of transfer stamp duty.
Maintenance charges and sinking fund
Owners pay a monthly maintenance charge and a sinking fund contribution to the JMB or MC. The amount is tied to share units. Ask for the latest statement before you buy, since the management body can take action on arrears and they may need settling for certain dealings.
What to check for an auction condo
- Title status: strata title issued, or still a master title with an assignment.
- Proclamation of Sale: who bears maintenance, assessment and quit rent arrears.
- Arrears statement: get the actual figure from the management body.
- Car park: whether an accessory parcel is included.
- Market position: compare condos and apartments on auction and records in the building directory.
In BidNest's data, 40.1% of apartment auctions sold, against 38.5% overall across 10,443 auctions. See the market report, the land title guide and listings in Kuala Lumpur.
Want the arrears and title status of an auction unit checked? Contact Crispina Ng, BidNest's lelong property specialist.
Frequently Asked Questions
What is the difference between a strata title and an individual title?
An individual title covers a whole lot of land, usually for a landed home. A strata title covers one parcel in a building, with the land and facilities shared as common property.
How much does it cost to transfer a strata title?
It includes transfer stamp duty, legal fees, registration fees and any arrears. For a RM600,000 unit, the transfer stamp duty is RM12,000 for a Malaysian buyer, before legal fees.
Can I buy a condo with no strata title yet?
Yes, but through an assignment rather than a normal transfer. The paperwork is longer and bank loans may take more time, so check with your lawyer and bank first.
Who pays maintenance arrears on an auction unit?
It depends on the conditions in the Proclamation of Sale. Some put part of the arrears on the buyer, so read them and get a statement from the management body before you bid.
What are share units?
Share units set an owner's portion of the common property and are the basis for maintenance charges. Larger units usually have more share units, so their monthly charges are higher.
Sources
Speak to Crispina Ng for the latest auction details, reserve price and bidding process.