What is Strata Title and Individual Title?

by | Community, i-Stories, Property Trend

Mortgages are a hassle, but it’s a celebration becoming a new homeowner. Imagine standing in front of your dream house while the real estate agent takes down the ‘for sale’ sign, incredulous at your victory. You sit down with your trusty lawyer to sign the official documents, and she congratulates you on your new strata title property. 

You pause. What’s a strata property? 

See, when you’re looking to buy a house in Malaysia, you’re likely to come across four terms: strata, individual, freehold and leasehold. These are the type of titles your land has, according to Malaysia’s land laws. We’ve discussed the latter two, but what’s the difference between strata title and individual title? How does each affect you in the long-term?

What’s a Strata Title?

Strata Title

Strata Title is generally issued for high-rise properties, including condominiums, apartments, townhouses, and even landed properties that share common facilities. The land would belong to the owners of the property, i.e. the developers. They share common facilities in areas like the swimming pool and gym with other residents. 

Fundamentally, strata titles are separate individual titles for each unit of houses, apartments and offices within a development. Developers of an establishment must apply for the Strata title on the purchasers’ behalf under the Strata Title Act 1985. 

To buy a property or provide security for a loan, you would need a deed of assignment. The rights, interests and title will then be transferred over to the owner’s financier. Once the title has been issued, the owner can use their property the same way it’s used for an individual title. 

It would take at least a few years to obtain the strata title. However, the owner of the property has the rights to sell before the title issuance. 

What does this mean in terms of major land titles?

When purchasing a Freehold property with the strata title, the part of that property (or unit) will be yours forever. On the other hand, if it’s a Leasehold property, the role of that property is only yours for the extent of your lease duration. Same goes for Bumi properties; it depends on the terms of land, whether it’s freehold or leasehold.

What’s an Individual Title?

What's an Individual Title

Individual Title is typically for all landed properties that aren’t gated or guarded with standard facilities, where you’re the sole owner of the entire piece of land. This includes terrace houses, semi-detached, bungalows and so on. 

To sell your land, you’ll need Form 14A in the Malaysian National Land Code. For the legal charge of properties with this title by the owner to their financier, you can apply Form 16A. Both the transfer and payment involves the land office, and one should present the instruments for registration.

As we’ve mentioned, a unit owner will still have their right of ownership despite the property having its own land and an individual title. This is stated as Unit Share in every owner’s strata title, allotting them a share of the building based on their unit’s size. 

What does this mean in terms of major land titles?

Similar to the above, purchasing a Freehold property with the individual title means that the land is yours forever. In contrast, a Leasehold property depends on your lease duration, i.e. 30 to 999 years. 

Do the respective titles affect you differently?

No! It really just hinges on your personal preferences and needs; the property prices don’t vary along with these titles. Nonetheless, do note that strata properties call for the sharing of common ground, and more laws for their management govern them.

Of course, it’s essential to understand the relationship between land titles and ownership titles, so that you can decide which type of property is the best for you. Make sure to check with the developer regarding a home’s title status before you cash out those cheques because it has a direct influence in case you choose to sell in the future. 

If all this talk of titles still leaves you feeling unsure about which to go for, feel free visiting Rumah-i for more information! We are a trusted property management company that provides excellent guidance on all things residential. Take a look at some of our other blog articles or contact us if you’re a property owner seeking to rent out your space. 

You may also download our new Digital Tenancy app for quick and secured property searches, domestic cleaning or moving, and more beneficial services. For property agents, Rumah-i Partner is a platform where you can list and manage your properties for free! Check out all the available features now on Apple Store or Google Play Store.


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