Legal Fees for Property Transaction – Sales & Purchase
One of the most asked questions in a Sales & Purchase transaction involving immovable property is How much do I pay for legal fees? For a general outlook on what these legal fees cover, read my article on Legal Fees for Property Transaction and I would suggest that you start reading from there so that you can fully appreciate and understand the fee structure applicable. Today, I will share with you what you are expected to pay to your solicitors in legal fees for sales, purchases or other form of conveyances for completing any transaction involving immovable properties – be it a house, apartment, condominium, shophouse, commercial buildings, other types of buildings or land.
The remuneration of the solicitor is governed by the First Schedule to the Solicitors’ Remuneration Order 2005 (which only applies to transactions from the 1st January, 2006 onwards) and this remuneration applies whether the solicitor is acting for the vendor, purchaser, transferor or transferee.
|Consideration or Adjudicated value||Scale of Fees|
|For the first RM150,000||1.0% (subject to minimum fee of RM300)|
|For the next RM850,000||0.7%|
|For the next RM2,000,000||0.6%|
|For the next RM2,000,000||0.5%|
|For the next RM2,500,000||0.4%|
|Where the consideration or adjudicated value is in excess of RM7,500,000||Negotiable on the excess (but shall not exceed 0.4% of such excess|
Notwithstanding the above rates, for transactions governed by the Housing Development (Control and Licensing) Act 1966 or any subsidiary legislation made under that Act (eg. where you buy a house from a developer rather than a sub-sale), the remuneration of the solicitor having the conduct of and completing the transaction shall be as follows:-
a) RM250, if the consideration is RM45,000 or below;
b) 75% of the applicable scale fee prescribed, if the consideration is in excess of RM45,000 but not more than RM100,000;
c) 70% of the applicable scale fee specified, if the consideration is in excess of RM100,000 but not more than RM500,000; or
d) 65% of the applicable scale fee specified, if the consideration is in excess of RM500,000.
There are other rules which are applicable for this transaction but it would be too tedious to name them all. One of the most important rule to remember is that a solicitor may only act for either the Vendor / Transferor or the Purchaser / Transferee and not both. There is no such thing as a solicitor acting for both as there will be conflict of interest in such a situation.
Do you think the fees are expensive? Compare it with the fees charged by a property agent which usually range between 1 to 3% of the value of the transaction. I don’t mean to be argumentative but the professional liability of a solicitor towards the client compared to a property agent is definitely higher in its risk factor and rightfully, the fees chargeable by a solicitor should be higher.