In order to improve the Malaysian property sector, the Malaysian government has been asked by property developers to abolish the rules on legal service fees.
In a statement made by the Real Estate and Housing Developers’ Association Malaysia (Rehda), easing the rules will guide the domestic property market to grow competitively and compete internationally.
Early this month, Singapore released its payment guidelines for the passage of property titles.
”It is timely that solicitors and clients negotiate freely on a legal fee that is fair and reasonable without being governed by any regulation or orders, more like a willing-buyer, willing-seller basis,” said Datuk Ng Seing Liong, president of Rehda.
At this time, legal service fees on deals such as property transfers or purchases are set under the SRO or Solicitors Remuneration Order.
For the initial RM150,000, a payment of at least RM300 or one percent will be charged, and 0.7 percent will be charged for the next RM850,000. For the next RM2 million, there will be a charge of 0.6 percent, 0.5 percent for the next RM2 million and 0.4 percent for the next RM 2.5 million.
In relation to the move of the government towards a liberalised market, Ng is confident that a positive impact will result on the industry of property and housing in general if the scale legal service fees under SRO would completely be abolished.
Ng also added that such a decision could be a driving force for the market to have better buying interest and reduce the cost of acquisition.
The proposal has been made by the Real Estate and Housing Developers’ Association Malaysia way before, but believes that now is the appropriate time to accomplish it.
"From the feedback I have received, there are lawyers who want to see the rules liberalised so that they can be more competitive,” said Ng.