WHY MUST WE CHECK ALL THE OUSTANDING AND CONDITION BEFORE ATTENDING THE AUCTION?

Outstanding maintenance, quit rent, assessment, sinking fund, water, electric and indah water.

Kindly take note that there are many banks in Malaysia conduct auction and every banks normally have different condition. Normally condition of sale varies are from the outstanding amount which covers the maintenance charges, quit rent, assessment or even sinking fund if any. Some banks or financial institution will only absorb a certain percentage of the outstanding amount and some banks do absorb all outstanding till the date of auction. But as for outstanding electric, water and indah water no bank so far has agreed to absorb it.

Occupancy status of the property

Please be aware that all auctions do not auction the property with vacant possession. This means is the responsibility for the successful purchaser to vacate the occupiers if the property is occupied whether is owner occupied or tenanted.

What can we do if the property is occupied?

Before proceeding with the bidding, do pay a visit to the property and check the status of the property and also talk to the occupier to check whether they are owner(s) or tenant(s). Do negotiate with them whether after completion of transfer they will leave the property or can rent back to them. If all these cant work, do appoint a lawyer to issue them a notice and to obtain a court order from high court to vacate the occupier.




Accuracy of the addresses

Do check properly the address printed in the proclamation and always if possible check with management if the property is strata title property whether it is the correct property to be auctioned. Sometimes human error do happen


Check status of developers

Status of developers of the respective property are important as some projects in Malaysia where developers have wound up and left nobody to assist in the transfer of ownership will create problems to transfer later.

Normally when a developer wound up a OA (Official Assignee) will be appointed to take over the job of clarification for transfer but unfortunately some of the project do not have an appointed OA to handle the matter and therefore

Completion period of the whole transfer

Kindly take note that under LACA auction, normally completion will either 90 or 120 days depends on respective banks but all High Court and Land Offices cases completion will be 120 days.

Please bear in mind that most of the LACA will be given extension to complete the sale with interest charged normally around 8-10% per annum on the outstanding amount owed (Depends on Bank) but high court will not grant any extension as per the condition however for case to case basis successful bidder can appeal through court for extension approval and interest to be determined by respective banks.

WHAT ARE THE TERMS THAT WE AS BUYERS OR INVESTORS SHOULD CONSIDER?

Every single auction has their auction date fixed. Before the auction, all potential buyers or investors are advised to collect a copy of the Proclamation and Condition of Sale from the respective appointed auctioneer. These are all the terms that buyers or investors should understand carefully all the terms and condition and to check the property themselves.



List of items to check before proceeding with the auction:-

i) Outstanding maintenance charges, quit rent and assessment.
ii) Outstanding electric, water and indah water bill.
iii) Outstanding sinking fund
iv) Occupancy status of the property
v) Accuracy of the addresses printed in the proclamation of sale
whether is tally with the property to be auctioned
vi) Check the status of the developer if type of property such as
flats, apartment, condo, shoplots or even now landed properties under strata title
vii) Bumiputera or non –bumiputera property
viii) Low cost or non low cost property

HOW DOES PROPERTY AUCTION WORKS IN MALAYSIA?

Basically there are two types of auction practiced in the market i.e. LACA auction (Loan Agreement cum Assignment) means those properties that do not have title or strata issued or if issued have not been perfected to the first owner where banks can appoint auctioneers to conduct a public auction monthly in various venues which normally held in hotels.

The second type of auction is normally we term it as NLC auction which falls under National Land Code and such auction normally takes place in High Court or Land Offices. Those properties where have their title/strata title issued will be sent to these respective places to be auctioned off.

WHAT DOES PROPERTY AUCTION MEANS IN MALAYSIA?

In Malaysia, most of the auction property are known as distressed properties i.e. property that owners had default the loan repayment.
If an owner owed the banks a certain month of installment, the bank will normally issue them a notice to pay and if owner still do not pay then the bank will proceed with the foreclosure (auction).

Unlike other developed countries such as Australia, United Kingdom, Scotland and etc. auction property does not only falls under distress property but also is a channel of marketing to sell their own property which is free from encumbrances (means selling with clearing all charges with banks or any financial institution) to gain a better price and also to sell faster rather than agency sale.