Perfection of charge in Malaysia

Posted on April 19, 2020 by Nadzirah Binti Abdul Razak @ Lapochik

Perfection of Charge is a correspondence process that need to be done together with Perfection of Transfer in order to include the Bank’s name in the Title so that their interest will be protected at all time. This process took place when the Purchaser/Borrower is borrowing the housing loan from the bank in order to purchase the property. In return for the housing loan given by the bank, the Original Title must also include the Bank’s name as the chargee of the property. Any transaction involved with the property must also get the consent beforehand from the Bank because by law, every name appeared on the Title such as the Bank has the right upon the property too. As a security, any failure on the repayment of the housing loan from the Purchaser/Borrower to the Bank will give an automatic right to the Bank to sell the property in order to recover the repayment of the housing loan. As a result, the Purchaser/Borrower will not keep the Original Title with them and it must be forwarded to the Bank upon the completion of registration on the Title.

• Basic process for Perfection of Charge:-

1. Form 16A (Charge) signed by Purchaser/Borrower
2. Form 16A (Charge) signed by Bank
3. Stamp relevant documents at LHDN
4. Registration at Land Office
5. Forward Original Title to the Bank
6. Client will receive copy of Title & copy of Form 16A

• Documents needed for Perfection of Charge:-

1. Copy of identity card of the Purchaser/Borrower
2. Copy of title
3. Copy of Facilities Agreement
4. Latest assessment receipt
5. Quit rent receipt
6. Other relevant documents

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