Non-MDI-appointed liquidators’ fees should be pegged at RM500 too, says Bar Council’s Roger Tan

• “Those agents who feel that the sum of RM500 is too meagre may opt not to accept the task,” said Seo.
• “There will be a coordination unit to ensure that both the National Housing Department and PPTGWPKL will work holistically to achieve vacant possession with strata title without delay.”

KUALA LUMPUR (Sept 3): The government’s recent decision to place a RM500 cap on the fees of liquidators appointed by the Malaysian Department of Insolvency (MDI) is seen as a step in the right direction by stakeholders.

However, the regulation should be extended to non-MDI-appointed agents too, said the chairman of the Conveyancing Practice Committee of the Bar Council Datuk Roger Tan.

“Liquidators not appointed by MDI are still allowed to charge fees in excess of RM500 – they too must be regulated,” Tan told EdgeProp.my.

The fee limit was among the government’s recent decisions on housing matters through the Special Task Force to Facilitate Business (Pemudah).

Helmed by minister in the prime minister’s department (economy) Datuk Seri Mustapa Mohamed, the Pemudah meeting on Sept 26 placed a RM500 cap on the fees of private liquidators who take over projects by defunct developers. It also stipulated that a property’s strata title should be issued at the same time as the delivery of vacant possession.

“The fixed sum of RM500 is to ensure those agents or liquidators appointed by the Malaysian Department of Insolvency (MDI) are 'reined in' to adhere to MDI’s decision made in collaboration with Pemudah,” said Pemudah co-chair Datuk Dr Ir Andy Seo.

He told EdgeProp.my there have been too many complaints against non-conforming liquidators “zealously charging their administrative fees in the form of percentage over value of property”.

“It has left a bad imprint on MDI who appointed them. They have to be regulated.

“Those agents who feel that the sum of RM500 is too meagre may opt not to accept the task,” he added.

As for the private liquidators appointed by the High Court in event of a defunct housing development, Seo said it will be addressed by the Ministry of Housing and Local Government with the proposed amendments to Housing Development Act. “It is next in the making.”

Similarly, Tan said, “We have received information that some liquidators are charging up to 2% of the purchase price or previous purchase price, whichever is higher, or 2% of the value of the property or more than RM4,000 for just an acknowledgment on the deed of receipt and reassignment (DRR) or for serving DRR on them.

“This is highly excessive and completely unreasonable. It also defeats the purpose of protecting the interests of house buyers under the Housing Development (Control & Licensing) Act, 1966 (Act 118), which is a piece of social legislation”.

Tan said the Malaysian Bar has always taken the stand that if liquidators take over the role of a housing developer, they must then be regulated under Act 118; otherwise their sole business is just to liquidate the assets of the insolvent housing developers.

Meanwhile, the National House Buyers Association (HBA) thanked the authorities for making the above decisions.

“The appointed agents are allowed to charge additional charges and expenses for cost incurred, for example, in situations where the master title is lost, for lodgement of police report, making of statutory declaration for replacement of title and application for its new issuance and whatever related thereto. 

“However, such additional charges must be reasonable and transparent. This is in line with MDI’s current fee and expenses of RM500 being ‘Gaji Pelikuidasi’ (Liquidator’s Wage),” stated HBA in its press statement issued on Sept 28.

“Hence, we hope all liquidators or agents would comply with the decisions of MDI working in collaboration with Pemudah. It all boils down to strict compliance now,” it added.

Coordination needed among all parties for issuance of strata title

On the strata title issuance with vacant possession, Seo said “the process” has been stipulated in the sale and purchase contract since Act 118 was amended and implemented on June 1, 2015.

“There have been 19 success cases of vacant possession with strata title compared with 488 that have been delayed because of several teething technical problems. It seems all have been ironed out by the respective professional organisations,” said Seo.

Pemudah has chosen the Kuala Lumpur Federal Territory Director of Lands and Mines Office (PPTGWPKL) as the benchmark for the implementation of this regulation since most successful cases have been from there.

“There will be a coordination unit to ensure that both the National Housing Department and PPTGWPKL will work holistically to achieve vacant possession with strata title without delay,” he added.

Real Estate and Housing Developers' Association Malaysia (Rehda) said it has “no objections to the issuance of strata titles upon vacant possession as this is considered to be the best practice”.

“However, to allow for this to actually happen, processes must be expedited among the Malaysian Institute of Architects, Association of Authorised Land Surveyors Malaysia, Department of Survey and Mapping Malaysia, and PPTGWPKL.

“If these processes are expedited and the titles still cannot be issued on time, the developer should, as recommended by PPTGWPKL, be given a waiver by the Ministry of Housing and Local Government,” Rehda president Datuk NK Tong stated in a reply to EdgeProp.my.

“This is allowed for by Schedule H of Act 118, after the developer has complied with all its obligations under the Act in the issuance of titles.

“Rehda will continue to encourage our members to uphold our nation-building role of providing quality affordable homes for the rakyat,” Tong added.