PROPERTY - LEASE OPTION IN MALAYSIA: A common practice? By TEH TAI YONG

LEASE OPTION IN MALAYSIA: Would Lease Option become a common practice in Malaysia?

No one would know for sure what is going to happen in the property industry for next 10 years.

However, the following factors may contribute to the popularity of Lease Option in Malaysia:

1) ECONOMY: The banks are tightening their loan approval in view of the global economy conditions. Purchaser/ Borrower/ Investor would face more obstacles in applying for loans.

2) RULES: The 70% ruling on financing by Bank Negara Malaysia has substantial impact on property buyers.

3) TAXES/ STAMP DUTIES: Real property gains tax, stamp duty for transfer/ loan, lock-in period penalty etc - not payable for Lease Option.

4) CRISIS/ BUBBLE??  Lots of Motivated Sellers? [nobody knows this...]


It is the best time to learn the skills now : )

By: TEH TAI YONG

PROPERTY - Lease Option in Malaysia - by TEH TAI YONG

Lease Option Malaysia: I am attending a Property workshop these few days on "Lease Option" in Malaysia.


It is rather a new concept for many people in Malaysia, although this concept has been widely used as a strategy to acquire properties in many other countries such as the United Kingdom, New Zealand, Australia etc. 


Many people approached me and asked whether the concept of Lease Option could work in Malaysia. I would like to share the following views/ information on Lease Option in Malaysia.


What is Lease Option?


A Lease Option is a contract which consist of 2 fundamental elements:

1) Lease of the property: the owner leases the property
2) An Option: the owner grants the buyer the option to purchase the property at an agreed price which is exercisable within a specified period

Who are the parties to Lease Option?


1) Property owner (known as the Seller) who grants the lease and the option
2) Buyer who has been granted the option. He/she may be the tenant under the lease OR may sub-let the property to another tenant.

Why Lease Option? 


This strategy allows the buyers/ property investors to take control of the property without having the need to apply for financing to purchase the property.

Would Lease Option work in Malaysia? 


Why not?  

As long as the parties enter into valid and binding Lease Option contracts, such strategy would work in Malaysia (like in any other countries mentioned above).

Is Lease Option common in Malaysia?

Personally, I do not think so. 

What are the challenges? 


As such concept is still not common in Malaysia, the buyers must have the knowledge and skills to convince the other parties to enter into Lease Option arrangements.

It would be interesting to observe how this concept would develop in Malaysia in next few years.

By: TEH TAI YONG 28-11-2011

Profitability Starts From The Legal Aspects – Mastering The Legal Aspects Of Buying Property” Written By Teh Tai Yong

A review of my book "Profitability Starts From The Legal Aspects – Mastering The Legal Aspects Of Buying Property” by Horlic Lim www.horlic.com

The author, Teh Tai Yong is a practicing lawyer and also an active property investor in Malaysia.

So, it won’t be wrong to learn on the legal aspects of buying property from a lawyer, who is active in property investment activities, too.

Generally, this book tells about the basic legal aspects or knowledge of property transactions, which shall be concerned by both housing property buyers and sellers.

Perhaps, the impression on reading a law-related book is usually boring for majority. But, do not worry! You can actually finish this book within 2 to 3 hours.

The book has a total of 87 pages only, including 50 pages of sample housing development SPA, sub-sale SPA, land search report and company search report.

The contents were written in simple language, any layman should be able to catch up the points easily. The tips given in the book is useful for me! It is definitely worth more than the price of the book.

Major topics covered:

• Buying From Housing Developer
• Sub-Sale Purchase
• Financing
• Undertaking
• Practical Documents

About the Author
Teh Tai Yong is a practicing lawyer in Selangor, Malaysia. He is a partner of Messrs Teh Kim Teh, Salina & Co., a law firm based in Kota Damansara and Setia Alam.

His areas of practice include Property, Banking, Corporate & Commercial, Privacy & Data Protection Laws. He has been invited to speak at seminars and has written several articles which have been published in Malaysia and United Kingdom-based law journals.

How To Make Smoother Transaction For Greater Profit - by Teh Tai Yong

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