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.
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24 Responses to “Legal Fees for Property Transaction - Sales & Purchase”
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Do you know what kills you? The additional non-standard fees like
• Transportation (RM50-RM150) - It costs just RM6-RM12 for a courier service within Klang Valley, or RM2.50 for Poslaju
• Photocopying (RM50) - I though it costs 4 sen per page. RM50 is enough for 1250 pages.
• Printing (RM50-RM100) - how this is different from photocopying, I have no idea
• Land/title search (RM100-RM200) - A runner charges just RM30-RM80 for a search, the rest of goes to the firm to pay for the 30 sen phone call to the runner
Check your invoice for this tacked on items. The lawyers assume you don’t know better and just pay. All these are NEGOTIABLE. The lawyer already makes a fair income from the standard fees (that’s why they are *standard*).
Henri : I don’t see how, if at all, paying RM500 (taking the maximum from your examples above) as disbursements could kill the client when the legal fees are proportionately higher. The way you put it is as if the disbursements are so high that the client suffers as a result. In any event, if you could say that other professionals like auditors, engineering consultants, architects, tax consultants, accountants etc. do not charge slightly higher for disbursements just like lawyers do, then I rest my case. By the way, land title search is as per what the land office charges. Not what the runner charges. Thanks for your comment anyway and I agree with your point that a client should always look into the bill (whether legal fees or disbursements) and make enquiries with the solicitor where he is unsure or dissatisfied.
Dude, when a discharge of charge costs just RM300 and just involves presentation of the documents, another RM500 (it is usually more) is a killer.
But even going with your argument that if a S&P is RM15,000, another RM1000 is nothing, you forget: RM15,000 for an S&P is based on the market value of the property, not the actual work performed. This is not logical and we are being conned somewhat. If one were to say that the higher the value of the transaction, then slightly more diligence is required, then yes. But it is not proportional to such an increase! ie. the diligence required for a RM100,000 house is not all that much more than a RM1mil house, but the fees is so much more. For engineering consultants, architects et al, yes, the work for a RM1mil house is much more - it is a bigger house, a more complex house! The parity is not the same for conveyancing work and engineering work, you cannot compare the two! But lawyers are.
2) The Bar Council set the standard charges because it is a fair value (although as explained above, it is actually not fair to clients). So why must lawyers tack on a transportation charge of RM100? The very notion of RM100 for photocopying does not make sense either. If only the lawyers were brave enough to just say, the charge is RM1000 extra for our fees in illegal contravention of the Bar Council’s rules, instead of labelling them with ridiculous names.
3) No, almost all lawyers use runners for searches, it is NOT the actual fee charged by the Land Office. I suggest the next time you buy a property to look at your invoice.
Henri : Glad to have you back Henri and thanks for your comments. With all due respect, I think we are going a bit off tangent here. This article discusses the fixed scale fees for professional legal fees chargeable by solicitors in respect of sale and purchase or transfer of immovable properties. It does not deal with discharge of charge (which will come in a later article). Neither does it discuss the amount of disbursements chargeable by solicitors. Whilst legal fees are fixed, disbursements may vary from solicitor to solicitor just like any other type of business. I am sure you would be able to appreciate the difference between professional legal fees and disbursements. The items covered by legal fees are discussed in the first article of mine.
I also do not see where I have mentioned RM15,000 or RM1,000 anywhere above and hence, would not be able to respond to you on that item you mentioned.
I am quite curious as to your statement that “No, almost all lawyers use runners for searches, it is NOT the actual fee charged by the Land Office.” as you seem to say that all lawyers do not charge the actual fee charged by the Land Office for searches. Do you have the evidence to back up your statement regarding all lawyers or is it a mere sweeping statement?
At the risk of repetition but necessary in case there is any misunderstanding, this article is meant to inform the public about the fixed legal fees chargeable by solicitors. All solicitors will have to charge their fees according to the scale prescribed. These are professional fees - much unlike consultation fees when you visit a doctor. Disbursements, however, does not fall under the discussion of this article. It varies from solicitor to solicitor (just like business to business) and property to property (depending on what kind of search is involved, whether consent from authorities is needed, location of property etc).
It is almost impossible to discuss the reasonableness of disbursements charged by law firms for each and every conveyancing file because each case is different (unless it is a purchase from the developer because in such a situation, it is likely that all the transactions are alike and the disbursements incurred are the same - in which case, as shown above, the scale is some what lower than sub-sales).
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Dear good attorney’s,
I just perusing the article above and slightly required some specific information to my home transactian legal fee’s.
in general, I wish to bid an apartment at RM40k - RM50k. Could somebody advice me the legal fees that i will be expected to pay and very appreciated with the specific maximum fee on the worst case, if any.
I just prepare my self prior to bid through the property auction.
Thanks.
Amir : If the sale price of the apartment is RM50,000.00, you will need to pay RM500 for legal fees for the sale & purchase transaction. Bear in mind that this excludes disbursements eg. stamp duty, searches, private caveats etc.
Prior to an auction, you should conduct a search on the property to see if there are any encumbrances such as charge (mortgage) or caveat on the property. You should also find out from the developer / management company (if any) of the property on outstanding charges which the owner may have incurred. It is likely that you will have to pay off these outstanding charges first before the property could be transfered to your name.
Pablopabla : Thanks for your advice and your time perusing my queries.
Another queries, should the lawyer’s send the disbursements invoice to me, may I ask the lawyer from them to prove the disbursements cost.
And yet, should the lawyers proof the receipt etc.. how much the reasonable allowance for lawyers profit & attandance to be added.
Thanks.
Amir : You have the right to ask the lawyer to show receipts for disbursements to be incurred / incurred. You are free to negotiate certain variables in disbursements (eg. photostating charges, transport) but not the legal fees because legal fees are fixed by law. Neither can you negotiate stamping fees because that is also fixed by law.
Dear Pablopabla,
Thank for your good responds on my previous queries.
Yesterday, I had a discussion with my cousin pertaining legal processing claimed by the solicitors for my cousin property transaction. Thus, I was check roughly and found several items that we could not understand, like:
1) Master Facilities Agreement, 1st Party assignment, Property Purchase Agreement, Property Sale Agreement .
we can’t figure and can’t understand the agreement as the property is through auction. Is it necessary?
2) Stamping fees on Master Facilities Agreement, Stamping fees on 1st Party assignment, Stamping fees on Property Purchase Agreement, Stamping fees on Property Sale Agreement, Stamping fees on Power of Attorney & Stamping fees on SD own occupation & bankruptcy
Is it necessary as the query 1.
3) Purchase standard loan documents.
Is it really the documents up to RM 100.00 while the transport fees are claimed separately?
4) Deeds of Assignments (By way of transfer)
Is it necessary?
5) Consent from developer
Is it necessary? The developer already imposed consent and management fees separately. and my cousin already paid to the developer.
6) Stamp Duty on DOA
Is it cost more than my legal fees?
(The lawyers charged to my cousin up to RM415)
For information, the property bought through auctioned unit and at RM40.5K.Thus, my cousin suffered the legal fees at RM3050.00 @ 7.53% from the unit price. In my opinion, the cost should be lower as the Sale & Purchase Agreement not required and comparatively; my friend bought a 2nd hand house with (legal) cost about +/-RM1800 only.
And yet, How the ‘renumeration act’ affect to the auction transaction solicators/legal fees.
Please Advice.
Amir : Whoa! That’s a whole lot of questions there! LOL! Okay, for (1), (2) and (4), I believe that they are necessary. (3) is for the price of the standard loan document. You can check with Bank Negara Malaysia if you feel that the sum charged is exorbitant. (5) depends on the type of consent given. Stamp duty is higher than legal fees due to the scale imposed by law and that would be payable to the Stamp Office. I would advise that you ask the solicitors to explain to you the details of the charges so that you can have a better picture on what you are paying for. All I can say is that it is unlikely that the solicitors have overcharged because the fees are prescribed by law. The disbursements also should not differ much.
Pablopabla,
Thanks for you express respond and laughing out loud huh :p
actually, what we refer yesterday referring to solicitors remuneration act 1976 and your article above.
QA) what is the different with my Q.No.1 above with order 2(a)(ii) and 6th sch. item 2(a).
QB) order 2(c)(ii) and 6th sch. item 2(a).
QC) effect of order 2(d), 2(e), 2(f)
thats curious me with the invoice paid by my cousin. just checking.
btw, i just check with that ‘bank’ and they mentioned that no payment required for the standard loan documents.
sorry to my cousin huh,
Hi Pablopabla,
I found your article very helpful and would need your expertise advise over here. I’m planning to buy a freehold landed property through an agent for RM380K. Location of property in KL. However, I would like to appoint my own lawyer to represent me. I believe my legal fees alone should be around RM3110 (from your table above-please correct me if I’m wrong). So as not to be caught off guard, could you please advise me what are the other charges and searches involved & how much do I need to pay in total.
Really appreciate your help in this.
Thank you.
Cat : Hello! Yes, the basic legal fee for the Sale & Purchase Agreement is RM3,110.00 as you rightly calculated. Your lawyer may also advise you to enter a private caveat to protect your interests as a buyer which will cost you RM200 in legal fees alone (for entry and RM150 for withdrawal).
You are also expected to pay stamp duty which will be assessed by the Stamp Office. I would estimate that around RM6,100.00.
All in all, I would think that you should have RM10,000 in reserves to cater for legal fees and disbursements for the whole transaction. This excludes financing costs.
Hi Pablopabla
Thanks for your advise. At least I won’t have a heart attach later.
Hi,
I recently purchased a house from the developer. I was very interested to read the Q&A above. I just received the bill from the S&P lawyer and it reads like this:
Stamping S&P A (born by developer) - 0
Stamping Deed of Mutual Covenants - 0
Stamping of MoT - RM7356
Registration fee on Transfer *- RM650
Registration fee on Consent to transfer* - RM10
Adjudication* - RM10
Search fee* - RM40
Affirmation Fee* - Rm4
MIsc* - RM50
Government Tax* - Rm50
Could you advise me, sepcifically on the items with (*) as to what they mean & which ones can be negotiatied. I only managed to knock down the MISC charges to 0, as my argument was that their legal fees are paid by the developer.By the same argument, which other fees can be negotiated?
So far all communications have been sent via snail mail only (not courier), and the rest has been via fax. The purchase value of the house was RM380, and I took an upgrae package which brings the value to RM417k.I took a loan for Rm350k.
Thanks in advance.
Hi again,
I will be expecting a similar bill from the loan lawyers, which I was told would be to the tune of RM5772. Do you have some guidelines on the fees I should be expected to pay from the housing loan lawyers? Does it follow the same scale?
Thanks again. I hope the questions are not a nuisance. This is my first property purchase.
Razif : Wow! You are already saving much with the developer paying the legal fees. The disbursements payable to the lawyer is pretty standard and justified. Most, if not all of it, are paid to government departments.
The legal fees for loan is on the same scale as the S&P calculated on the amount of loan i.e. 350k. Stamp duty is RM5 per RM1k of loan.
The questions are not a nuisance but the negotiating of disbursements with the lawyers might be a nuisance to them! LOL!
Pablopabla: Thanks for the feedback. That gives me a little peace of mind when dishing out the buckets of dough for the property. As a matter of principle, I tend to be very particular about paying only for what I get, so I guess you could say I can be a tough customer at times!
Pablopabla: When I look at the article you have written above, am I correct to say that for a new house bought from the developer, the lawyers professional fees for the loan lawyer (Rm350k loan) should in fact be RM2030, ie RM2900 x 70% as per the Housing Development (Control & Licensing) Act 1966 or any subsidiary legislation made under that act. If I find that my lawyer is in fact charging RM2900, what action can I take? The loan lawyer is charging the following. Could you please explain what each term means and if the amount seems reasonable, please.
Professional fees
Charge RM2900
Loan Agreement RM200
Consent to Charge RM300
Disbursements
Stamping of Charge RM1780
Stamping of Loan Agreement RM40
Registration of Charge RM60
Registration of Consent to Charge RM10
Apply Consent to Charge RM70
Stamping Statutory Declaration RM20
Affirming Statutory Declaration RM20
Land search RM40
Official Land Search for consent RM40
Bankruptcy Search (Insolvency) RM22
MISC RM100
5% government tax RM170
Thanks in advance.
Razif R : As a customer, you have every right to ask the solicitor to explain to you the Bill and how each item is charged. There may be a mistake in the legal fees chargeable.
pablopabla: I hope you can give me some professional advice on a case related to property. My mom received an injunction from my uncles to stop her from collecting rental for my dad’s (deceased) property as well as a claim of RM700k as they claimed that the property’s rental should be shared by all of them. The property is a 4 storey building (each uncles and my mom own a floor).
My mom won the injunction case, is the RM700k case still valid if my mom already won the injunction? Her lawyer says that it will be brought to court for full trial. Is that necessary when the judge had acknowledged that the property is belonged to my mom? Thanks in advance for your assistance.
Jamie : The details which you gave me are still a bit sketchy. Please email me instead. Thanks.
pablopabla: Thanks for your reply. I have met up with my mom’s lawyer last week and things are clearer now. Thanks again