Buying property in Malaysia (or anywhere in the world, for that matter) is already a daunting task, what with mortgages, loans, credit score, legal fees, documentation, and much more. As a first-time property investor or homebuyer, you also need to know that there is more than one type of property title in Malaysia.

In fact, there are three types of property titles in Malaysia, which are master title, strata title, and individual title. But do you know what they actually are? Why is it important to understand these titles? And what are the differences between them?

A property title is a legal document that records and proves the ownership of a property. It is essential to understand the property titles before making a purchase decision, because it could affect your purchase cost, the selling process time and even the property value in the long term.

Master title

Before all individual buyers of a project gets an IDT (Issue Document of Title), either the individual title (mostly landed property) or strata title (mostly for high-rise property), the entire project or land is put under one single title known as the master title, which is usually recorded under the name of the developer until the completion of the project. Upon completion of the project, the developer is responsible to apply and subdivide the master title into multiple smaller strata or individual titles for each individual owner.

Strata title

Strata title is a sub-divided title meant for individual units of a stratified development. A stratified development is usually referring to multi-level development (eg: condominium, apartment and retail mall), where owners share common facilities and spaces within the development compound, such as lift, staircase, carpark building, and leisure facilities such as swimming pool, gym, etc.

However, strata development is not limited to high-rise development today. There are more and more strata landed properties in the market as more township developments have been launched in the past decade. A strata landed property is basically a landed house that shares common facilities with other owners within the project, such as club house, leisure park, and gated and guarded facility.

It is worth noting that strata property owners are responsible to maintain and upkeep their unit’s façade. They are also not allowed to change the unit façade before getting the neccessary approvals from the management office, as the façade is considered a part of the development’s common properties. It is also important to understand that when you buy into a strata landed property, you are actually buying a parcel of land of a development, not the landed property structure itself.

Owning the strata title is important as it serves as proof of ownership of the unit. Therefore, it can be used as an instrument of charge to banks for loans, and avoid complications when developers come under liquidation as the developer is usually the holder of the master title.

According to amended Strata Management Act 2013 which came into force in 2015, the developer is required to apply for the separate strata titles within 3 months upon the completion of the super structure, so that the strata title will be ready prior to the handover of vacant possession. Previously, the application of strata title could take up to a few years after the handover.

Individual title

Having an individual title property means that it is under the ownership of the individual who purchased the property. It is typically issued for landed property in which you are the only owner of the whole piece of land. Unlike strata title where you need the consent from all other owners of the land, you are free to make any decision on the property as you are the only owner of the land. Besides, the registration process of individual titles is also faster than a strata title, as the former involves lesser owners thus the process is more straightforward.

(Source: Hartamas Real Estate)