Cheaper Legal Fees Spells Good
News for Buyers
NST Property Times 14-Jan-2006
House buyers have welcomed the "significantly lower"
legal fees for standard Sale and Purchase Agreements (SPAs) which came
into effect on Jan 1, 2006 under the Solicitor's Remuneration Order
2006.
The order, made under the Legal Profession Act, replaces the
Solicitor's Remuneration Order 1991.
In welcoming the move, the National House Buyers Association (HBA),
which has pressed for a revision in the scale of fees payable to
lawyers for housing transactions, said the new rates will benefit those
purchasing properties that are regulated under the Housing Development
(Control and Licensing) Act 1966 (HDA).
"It will make ownership more affordable, and put to rest the generalised
'No discount rule' that was implemented across the board
for all conveyancing practices," said HBA's secretary-general Chang Kim
Loong.
The fees for a standard SPA and the related financing documentation has
now been reduced to a fixed sum of RM250 for property costing up to
RM45,000. For those costing more than RM45,000 but less than RM100,000,
a 25 per cent rebate has been introduced.
In the case of property costing more than RM100,000 but less than
RM500,000, a 30 per cent discount is permitted, while for unit of more
than RM500,000, it is 35 per cent.
Prior to this, purchasers of property worth RM300,000, would have to
pay a fee of RM2,550 - made up by one per cent for the first RM150,000
and 0.7 per cent for the next RM150,000.
However, with the 30 per cent rebate this is now slashed to RM1,785.
HBA's Chang said with the savings, more buyers should engage their own
lawyers to protect their interest when entering into a purchase.
One lawyer, he said, cannot represent both the vendor and the
purchaser. If the buyer is using the vendor's or 'developer's panel
lawyer, the lawyer is not likely to represent the buyer against the
bigger corporate client.
"Purchasing property is a big investment and buyers should make
provisions for legal fees to appoint their own lawyer in order to avoid
problems later.
"While they may think that they cannot afford the services of their own
lawyer, consider whether they can afford not to. There is no such thing
as 'free' or 'subsidised' legal fees... it is the strategy of the
developer, a gimmick to entice buyers and generate sales," he said.