How To Sell Property in Malaysia if The Owner is Deceased?
How To Sell Property in Malaysia if The Owner is Deceased?
Selling property in Malaysia when the owner is deceased involves several legal steps to ensure that the process can be done smoothly without any mistake and the rightful beneficiaries can receive what belongs to them.
Here are the steps that one could take:-
- To determine if the deceased left a will
If the deceased died leaving a will, the Executor must ensure whether the deceased’s Will has specific instruction regarding the property arrangement, such as whether to sell or to be given to the beneficiaries. If the Will did mention to sell the property and thereafter the sale proceeds to be distributed, then the Executor may immediately advertise the property and secure a buyer without the need of getting consent from the beneficiaries. If the Will is silent about the sale of the property, it is for the beneficiaries if they would like the property to be sold.
- Obtain the written consent from all the beneficiaries
The executor/administrator is always advised to obtain a written consent from all the beneficiaries before proceeding to advertise the property for sale. This is to protect the executor/administrator in case when dispute arises in the future.
Besides that, the executor/administrator must also ensure that all the beneficiaries agree on the selling price.
- Put the Property on Sale
Once the consent is obtained from the the rightful beneficiaries, the executor/administrator (whichever is appliable) can proceed to advertise the property or find a property agency to help him to do so. With the grant of probate/letter of administrator, the executor/administrator (whichever is appliable) has the right and capacity to arrange for the sale of the property.
- Secure a Buyer
It is advised to inform the potential buyers about the situation of the owner who has passed away in this case. It will not be an obstacle to the potential buyer or the buyer’s bank but it is good to keep them informed beforehand.
- Preparation of the Sale and Purchase Agreement
Once the buyer has signed the booking form and paid for the earnest deposit, the executor/administrator (whichever is appliable) can engage a conveyancing lawyer to prepare the Sale and Purchase Agreement for the property. The Sale and Purchase Agreement will be prepared and reviewed by both sides’ lawyers.
Besides that, the lawyers must also conduct a land search of the property in order to make sure the Executor/Administrator’s name is registered as the representative for the deceased. This is to ensure that they can sign the sale and purchase agreement and other relevant documents relating to the selling of the property on behalf of the deceased.
- Application for Order for Sale
Note that in the sale of the properties which are owned by owners who have passed away, the Sale and Purchase Agreement will always subject to the grant of an Order for Sale from the High Court Malaya to empower him/her to sell the deceased’s property to the buyer. It is the duty of the executor/administrator to apply for such order for sale from the High Court Malaya and generally the time given in the sale and purchase agreement is between 3 to 6 months. The cost of the sale and the application for such order for sale will be deducted from the estate of the deceased.
- Completion of the Sale of the Property
Lastly, upon the completion of the sale of the property, the sale proceeds will be first used to reimburse the executor/administrator for all the expenses/costs that are incurred for the sale of the property and thereafter the nett profit shall be distributed according to the will or the Distribution Order to all the rightful beneficiaries.
SOME ADDITIONAL INFORMATION:
- It is important to ensure that the property is free from any debts before the executor/administrator proceed to sell it.
- The sale of such properties may attract the Real Property Gains Tax if the sale of such properties makes a positive gain.
Thus, by adhering to the proper procedures and seeking appropriate legal assistance, you can ensure that the property is sold in compliance with the Malaysian law and that everything is fairly distributed to the rightful beneficiaries.
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