Before you decide which property to buy in Malaysia, it’s crucial to understand the differences between strata title and individual title properties. These terms are about how ownership is shared.
With strata title, you own a part of a bigger building or complex, together with others. It’s similar to having a piece of a puzzle. On the other hand, individual title means you own the whole property all by yourself.
Knowing these terms helps you figure out which type of property is the best fit for you.
Strata Title
1) What Is A Strata Title?
Strata titles are usually for buildings with many floors, like apartments or offices. This means the people who own the units also partly own the land where the building stands.
Each unit in the building gets its own title. This is true for houses, apartments, or offices that share things like security, parking, and other common areas. These things are taken care of by a shared owner.
2) When Is A Strata Title Used?
Once you have a strata title, you can use your property just like you would if it had an individual title.
According to the Strata Title Act of 1985, developers need to apply for strata titles for buyers. If you’re buying a property from someone who already bought it, like in a resale, or if you’re using the property as security for a loan, you’ll need a document called a deed of assignment. This document moves the ownership rights, interests, and title to your lender or whoever is giving you the loan.
3) How Do You Obtain A Strata Title?
Under the Strata Title Act, you can start applying for your strata title once the main structure of your property building is finished.
Within three months of getting the Certification of Completion and Compliance (CCC), you need to give the whole plan of the building to the Director of Survey (JUPEM).
This is important for getting the Certificate of Proposed Strata Plan (CPSP). At this point, the plan must include the sizes of all the shared areas and the parts owned by each person.
When you get the CPSP, the company that built your property needs to apply for strata titles within a month. They do this for you and the other buyers.
As a homeowner, your property’s strata title will come from the developer. Before buying, make sure your Sale and Purchase Agreement explains the main title that covers the entire property building.
If you want to understand more about your strata title, you can call the local land office for help.
Individual Title
1) What Is An Individual Title?
An individual title is usually given to properties with land, like semi-detached houses, terrace houses, and bungalows. This type of title is given when you’re the only owner of the whole piece of land.
Remember, if you want to sell this kind of property, you’ll need to use Form 14A (known as “Borang Pindahmilik”) from the Malaysian National Land Code. And if the owner wants to put their property up as security for a loan, they need to use Form 16A for the property’s legal charge with an individual title.
2) When Is An Individual Title Used?
When a property comes with its own land, it gets an individual title. But if you own a unit in a tall building like an apartment, flat, condo, townhouse, or a shop, you have the right to own that specific unit you bought.
Each owner has a part of the land or building. This part is called the ‘unit share’ on their strata title. This share is determined by the size of their unit compared to the whole building.
3) How Do You Obtain An Individual Title?
Much like how a strata title works, an individual title is connected to a bigger title, which a developer owns. This bigger title is called a master title, and it’s what the developer has before people buy the landed homes they sell.
When it comes to transferring ownership or using your property as security for a loan, the assigned land office in your area is involved. You need to provide all the right documents for registration.
Here are some important things to know about owning an individual title:
- If you buy a freehold property, the individual title that includes the land and property you own is yours forever.
- For leasehold properties, the individual title is yours for the duration of the lease you have.
- If your property is considered a Bumi property, the individual title you own follows the rules set by the land authorities.
How Will Having A Strata Title Vs Individual Title Affect Me Differently?
The differences to consider are not substantial. The only distinction lies in your personal preferences and requirements. The value of your property remains unaffected by these titles.
Generally, Malaysians often factor in these land titles when thinking about property prices.
However, remember that properties with strata titles include shared facilities and spaces (like condos with guarded communities, playgrounds, gyms, and parking lots). Because of these shared features, there are more regulations that oversee strata titles and their management.
Now, let’s revisit everything about strata titles and individual titles in a visual summary, for a quick recap:
| Ownership structure | Ownership of a property is shared among multiple owners | The purchaser possesses the ownership of both the land and the property. |
| Nature of issuance | To properties located in tall buildings. | To landed properties |
| Type of home | Houses such as condominium or apartment units | Homes situated on solid ground, like terrace, bungalow, and semi-detached houses |
| Registration process | It is relatively slower compared to the process done for individual title owners | It is generally performed faster for individual title owners |
| Financial ease structure | Getting financial assistance is usually straightforward, but the process might be more demanding compared to the journey of owning an individual title | Acquiring financial assistance is simpler and more accessible for owners with individual titles |
| Responsibility structure | Total maintenance responsibilities fall on the single owner | Maintenance is shared by all co-owners |
