Wednesday, October 10, 2007

Malaysian Institute of Estate Agents (MIEA) Q&A

This Q&A series appears in the Metro Classifieds of The Star monthly. Here we feature some of the more popular questions asked by property buyers and home owners.

Review of tenancies

Q. I have a few condominiums that I rent out to expatriates through realty agents on a two-year period (with an option to extend for one year OR to renew for two years). My question is: Am I obliged to pay the realty agent should my tenant extend/renew the tenancy agreement? If I am, what is the standard or acceptable rate? – SC Chew, Shah Alam

A. Yes, based on law and the practice, an estate agent is to be paid a fee for 'REVIEW' of tenancies. Let me first establish the fees payable to an estate agent for rental of premises (see table above):

Minimum fee

As in table above, but may be subject to a maximum discount of 30% or a minimum fee of one month rental.

For tenancies less than one year, the fee may be calculated on a prorata basis.

The above scale shall not apply to serviced offices or apartments or any other premises of a similar nature.

Therefore if there is a review in the tenancy, the agent is required to meet up with the tenant, discuss and agree on the renewed period, prepare the necessary documentation for both the tenant and the landlord to sign and probably assist in collecting any arrears in rental, etc. For the work done he can collect an equivalent of 50% of the fees prescribed and depending on the renewable term of the tenancy as described above.

Q. I bought a condo unit back in the late 90's. I have been informed that the strata title has been issued. The developer went into liquidation a few years back and the liquidator is requesting quite a substantial sum as administrative charges for them to execute the memorandum of transfer (MOT) and also a further vetting fee for the liquidator's solicitor

What are their rights and justification for asking for such a sum of money for just executing and vetting a standard MOT form? If all the unit owners give in to their demands then they (the liquidator and their solicitor) would have profited by just doing a normal duty of a developer.

“Am I obliged to pay the realty agent should my tenant extend/renew the tenancy agreement?”
Shouldn’t the sum be charged to the developer in liquidation instead of us unit owners? – Mark, KL

A. I really am not clear on the fees payable. Any liquidator is not in the business of making profit; they are there to help resolve issues based on the circumstances they are facing. If the owners think that the charges are exorbitant, please call for a meting with them and work out an acceptable structure. Resolve it quickly as there is a bigger picture; that is your property, which is worth more than the charges.

Q. I bought a double storey terrace house and it was completed after one and a half years as projected but was delivered late. I submitted a late delivery claim (LAD) to the Housing Tribunal and the award was given with four cheques payments. The first cheque should be dated June 2006 but until now I still have not received a cent from the developer. I further submitted this case to the Enforcement department (Penguatkuasa) but they said they couldn’t do much but just send letters to the developer. They even told me that I wouldn’t get notified even if they have released the letter. The question is, what is the purpose of filing a complaint to the Enforcement department when I wouldn't be able to know the status?

What's the next possible step or action that I can take? – Kitt Lee

A. Please refer to the National House Buyers Association for further advice! 03-21422225 or Email: my

Q. I bought a property after April 1 2007 and would like to ask a few questions: 1) How do I find out the value of the property at build up? 2) Who or which body determines the value of the property? 3) Upon the waiving of the RPGT from April 1 2007, will I be liable for tax if I sell it at a profit? 4) With regard to the waiving of the RPGT from April 1 2007, if a buyer purchases property before that date, would he be liable for tax if he were to sell at a profit? 5) How do I choose the right estate agent to market my property? – T

A. To answer your questions, 1) Please ask a valuer to do a valuation 2) The valuer can determine the value of any property 3) No, you will not be liable to pay any gains tax 4) If you sell after April 1, there is no need to pay gains tax 5) The general guidelines are as follows; – One who is active and focuses on the area where your property is located. – One who has negotiators who know what they are doing. – One who has a good track record - ask your neighbours or friends in the area.

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