Strata vs Individual Title

Strata or Individual title? Confused by the legal jargon? Let see what they actually mean, the differences between the two and what they actually imply.

What’s a Title?

First of all, what’s a title? A title is actually a legal document which certifies the ownership of a property. It provides name of registered property owner, boundaries of the property as well as its dimensions and area.

What’s an Individual Title?

An individual title is usually issued to a landed property such as a house (terrace, semi-detached, bungalow, villa) which has its own land. In short, an individual title is for a property which has its own land and this usually means that the land itself is owned by the proprietor.

To sell a property with individual title, Form 14A in the Malaysian National Land Code is needed.

As for the legal charge of the property with individual title by the owner to his financier Form 16A is applicable. Both the transfer and the charge will involve the land office and the instruments must be presented to the land office for registration.

What’s a Strata Title?

Strata titles are normally issued for individual units in high-rise properties (e.g condominiums, serviced apartments, offices, retails complex, etc) certifying ownership, dimensions and area of the each property unit. With strata titles, it usually means that the land belongs to the proprietors from the time of the multi-storey building.

It can take years for a strata title to be issued by the relevant authorities. Pending the issuance of the strata title, the owner of a unit can still sell or assign their unit and the non-availability of the strata title does not in any way affect the owner’s right to their unit.

In strata titled properties, common areas such as corridors, club house, outdoor recreational facilities, roads, mechanical & electrical facilities, etc., known as Common Property is owned by the Management Corporation, a body comprising owners of the entire strata development and determined by the share values (Unit Share) of their respective properties. This share value is usually determined by the built-up floor area of their respective properties.

For sale of strata properties prior to the issuance of individual strata titles such sale can be executed via an instrument known as Deed of Assisgment. As the name suggest, this piece of legal instrument ASSIGNS all interests, rights, covenants and obligations attached to the subject property from the Vendor/Seller to the new Purchaser. This includes any Mutual Covenants that the Vendor/Seller might have entered into with the Developer or the previous Vendor/Seller from whom he had purchased the subject property earlier.

It is important to note that some leasehold strata titled properties have a “Restriction of Transfer.” This encumbrance is usually in the form of a requirement for such transfer (or sale) to be approved by the Land Office of the respective District where the property is located.

It is highly advisable for the Purchaser to engage the services of a conveyancing legal profesional to manage the various legal documentations necessary for submission to the various local authorities and finance company for the legal completion of the Sales and Purchase Agreement.

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