Understand the meanings of, and differences between, the strata title and individual title categories in Malaysia before deciding which type of property to purchase.
What is a strata title?
Strata titles are generally for properties in a multi-storey building, also known as stratified properties. This usually means that the land belongs to the owners of the property (i.e. developers).
Strata titles are separate individual titles issued to units of houses, apartments or offices within a development that shares common facilities such as gated and guarded communities, security, car parks and facilities governed by a common owner.
When is strata title used?
When the strata title is issued, the person who owns the property can use the property the same ways a property under an individual title is used.
Under the Strata Title Act 1985, developers are required to apply for the strata titles on behalf of the purchasers. A deed of assignment is required to purchase a property or to provide security for a loan, for example, if the deal is a sub-sale, or to give security for a loan.
This will transfer the rights, interests and title to the owner's financier.
How do you obtain a strata title?
Under the Strata Title Act, the application for your strata title can start the moment the construction of your property building has completed the superstructure stage.
Within three months after the Certification of Completion and Compliance (CCC) is issued, the entire proposed strata plan must be submitted to the Director of Survey (JUPEM).
This is so that the application for the Certificate of Proposed Strata Plan (CPSP) can begin. At this stage, all accessory parcels and common property measurements must show on the strata plan.
Once the CPSP is issued, the developer of your property building must apply for strata titles on behalf of you (and other purchasers) within one month.
As a homeowner, you will easily obtain your property unit’s strata title from your developer. Before buying your home, ensure that your Sale and Purchase Agreement clearly outlines the details of the master title (which represents the entire development of the property building).
To ease your process of understanding how your strata title works, you can always call your region’s relevant land office to find out more information.
What is an individual title?
An individual title is typically issued for landed properties such as semi-D houses, terrace houses, and bungalows, just to name a few. It is given when you are the only owner of a whole piece of land.
Take note that to sell such a property, Form 14A in the Malaysian National Land Code is needed. As for the property’s legal charge with individual title by the owner onto their financier, Form 16A is applicable.
When is individual title used?
Whilst properties with their own land will be issued with individual titles, the owner of a unit in a high-rise building (e.g. apartment, flat, condominium, townhouse, office or even shop lot) will have their right of ownership of the unit they purchased.
Every owner will have their share of the land or building, all of which translates into ‘unit share’ in their strata title when issued based on the built-up size of their unit.
How do you obtain an individual title?
Similar to the mechanisms of how a strata title is handled, the individual title is subset to a master title that a developer owns before homeowners purchase the landed homes they sell.
Both the transfer and the charge of an individual title will involve your region’s assigned land office. All instruments and relevant documents must be presented to the land office for registration.
Below are some important nuances of owning an individual title to know:
- When you buy a freehold property, the individual title that hosts the land and property you own belongs to you forever.
- Meanwhile, if your property is a leasehold, then the individual title is yours for as long as your specific lease duration lasts.
- If your property is considered a Bumi property, then the individual title you own is subjected to the terms and conditions of the land.
How will having a strata title vs individual title affect me differently?
There is not so much difference to note! The only difference is in your personal preference and needs. Your property's price isn't affected by these titles.
Generally, Malaysians are affected by these land titles when it comes to property prices. Can you guess what it is before clicking on that link? 😀
However, do take note that strata properties have common facilities and areas (e.g. condos tend to have guarded housing communities, playgrounds, car parks, gyms, and more). Due to these common area features, there are more laws that govern strata titles and their management.
Now, here’s a visual summary of all things strata title and individual title, to recap:
To properties in high-rise buildings
Houses such as condominium or apartment units
Houses etched on firm land such as terrace, bungalow, and semi-detached homes
It is relatively slower compared to the process done for individual title owners
It is generally performed faster for individual title owners
Financial aids are generally easy to access but the process may be more challenging compared to that the journey of individual title ownership
Financial aids are easier to acquire and more accessible for individual title owners
Total maintenance responsibilities fall on the single owner
Maintenance is shared by all co-owners