The typical questions that most Malaysians have, while it comes to property purchases or investments, is the property’s title. And knowing what titles the property you own is important!
For your property’s title deed is the ultimate proof of your ownership.
The Strata title is issued when you own a portion of the land along with other owners. The land issued for is of high-rise properties; condominiums, apartments, and landed properties which are guarded and gated.
Strata properties tend to come with common area or facilities; swimming pools, clubhouses or others that are shared by all residents. This comes with its own obligations for shared maintenance fees and sinking fund. Thus, ownership of a property unit that is part of a larger shared development is under a Strata title.
An individual title, also known as a landed title, is a property that belongs to only you. This title is issued when only one owner owns the whole piece of land.
The land issued for is of landed properties; terrace houses, semi-detached houses, or even bungalows. The only exception is if the area is guarded and gated, which is then unlikely to be issued an individual title.
Strata title vs Individual title
In truth, having a strata title does not differentiate its effect compared to having an individual title. Having one over the other does not affect the property’s price. The only difference is the preference and needs.
What is important is the tenure of the land. The tenure can affect your property from the demand to the price. There are two sorts of land tenures, Freehold and Leasehold.
Guess what? You own the land forever! Freehold property is land that belongs to you, perpetuity. Unless of course, the government acquire your land although it is much harder on their part compared to leasehold lands.
Leasehold is a land that is leased to you for a number of years, the most common being 99 years, by the State Authority who owns the land. It works like a tenancy. You leased the land for several years.
Once the lease expires, the property will revert back to the State Authority. They then hold power to decide if they want to extend the leasehold or not. If you want to extend, a submission of the application to extend the lease has to be made before the expiry, along with a premium pay for an extension. The amount of the premium is to be determined by the relevant State Authority.
A Combination of Titles and Tenures
When you purchase a piece of property in Malaysia, you will see a mixture of titles and tenures listed for that property. You end up with one of the following combinations below:
- Strata & Freehold: Property that has common facilities shared with others and land that belongs to you forever
- Strata & Leasehold: Property that has common facilities shared with others and land that belongs to you for a number of years
- Individual & Freehold: Property where you get the whole land and it belongs to you forever
- Individual & Leasehold: Property that has common facilities shared with others and the land belongs to you for a number of years
So, have you gotten a gust of the bare bones of property titles and tenures?