19 Aug 5 Risks a Conveyancing Lawyer Protects You From in a Subsale House
5 Risks a Conveyancing Lawyer Protects You From in a Subsale House
Buying a subsale house is one of the most exciting steps in life. For many people, it represents years of savings, stability, and the beginning of a new chapter for their family. However, in Malaysia, purchasing a subsale property isn’t always straightforward. Unlike buying a new development where the developer manages most of the process, subsale transactions involve direct dealings between buyer and seller—and this can open the door to major risks if you don’t engage a conveyancing lawyer.
Many buyers are tempted to skip hiring a property conveyancing lawyer because they want to save money. On the surface, it looks like a “cost-cutting” move, especially since legal fees may feel like an extra burden after paying for deposits, stamp duty, and other charges. But here’s the truth: buying a house without a conveyancing lawyer can end up costing you far more in the long run. One missed document, one overlooked detail, or one dishonest seller could turn your dream home into a financial nightmare.
In this article, we’ll break down the biggest risks of buying a subsale house without a conveyancing lawyer in Malaysia, why legal representation is essential, and how it protects you from losses, fraud, and unnecessary stress.
Why a Conveyancing Lawyer is Crucial in Subsale Transactions
When you buy a subsale house, you’re essentially stepping into a legally binding agreement that involves several important parties:
- The Seller (current property owner)
- The Buyer (you)
- The Bank (if you’re taking a loan)
- The Land Office / Pejabat Tanah
- Sometimes, other interested parties (e.g., co-owners, family members, creditors, tax authorities)
Unlike buying a new project where a developer’s legal team often standardizes the process, a subsale involves customized Sale and Purchase Agreements (SPA), debt settlements (if the seller still has an existing loan), and property title transfers.
Without a conveyancing lawyer to oversee, draft, and verify these documents, you risk walking into a transaction full of legal loopholes.
3 Major Risks of Buying a Subsale House Without a Conveyancing Lawyer
Let’s dive deeper into the three biggest risks buyers face when skipping legal representation.
1. No Property Status Check
1. No Property Status Check
A conveyancing lawyer performs due diligence before you commit to the purchase. This includes checking:
- Title restrictions – Some properties come with conditions of use or restrictions (e.g., Malay Reserve Land or low-cost housing restrictions). Buying without knowing these rules may leave you stuck with a property you cannot legally own or transfer.
- Caveats – A caveat is a legal notice lodged by a third party (for example, a relative claiming ownership rights, or a creditor). If there’s a private caveat, you cannot transfer ownership until the matter is resolved. Without a lawyer, you may not even know this exists until it’s too late.
- Outstanding loans or arrears – A lawyer checks whether the seller has fully settled quit rent (cukai tanah), assessment tax (cukai pintu), and maintenance fees (for strata properties). If unpaid, the buyer could inherit these debts unknowingly.
- Disputes or family claims – Sometimes, a house may have multiple beneficiaries (e.g., in cases of inheritance). Without verifying ownership, you could end up buying from someone who doesn’t even have the legal right to sell.
Example: You buy a subsale house directly from the seller. Months later, the bank rejects your loan disbursement because the property is under a private caveat. You’ve already paid a deposit, but now you can’t complete the purchase. Without a conveyancing lawyer, recovering your deposit or resolving the matter becomes extremely difficult.
2. Risk of Being Misled or Using Unauthorized Documents
Property transactions involve a mountain of paperwork:
- The Sale and Purchase Agreement (SPA)
- Title documents
- Loan agreements
- Bank’s Letter of Instruction
- Land Office consent letters (where applicable)
If you don’t have a conveyancing lawyer, you’re relying on the seller—or worse, the agent—to ensure all documents are in order. But what if they’re not?
Cases have been reported where buyers paid for properties that weren’t even legally owned by the seller. In other situations, SPAs were poorly drafted, leaving loopholes that benefited only one side.
A conveyancing lawyer ensures that:
- The SPA protects your interests as the buyer.
- The seller provides genuine proof of ownership.
- The process follows legal compliance with Malaysian property laws.
Without this safeguard, you’re exposing yourself to fraud. Even if the seller is genuine, small mistakes in documentation could delay your transfer of ownership for months—or worse, invalidate the whole process.
3. Deposit and Full Payment Money Not Protected
This is one of the most common and most dangerous risks.
When you buy a subsale house, you typically pay:
- Earnest deposit (usually 2–3%)
- Balance deposit upon SPA signing (up to 10%)
- Full settlement upon bank disbursement
If you pay these directly to the seller, you’re putting your money at risk. What if the seller refuses to return the money when the transaction falls through? What if the seller goes bankrupt?
This is where a conveyancing lawyer acts as a trustee (stakeholder). Instead of paying the seller directly, all payments go through the lawyer’s client account. This ensures:
- The money is released only when all conditions are met.
- The bank’s instructions are followed properly.
- Both buyer and seller are legally protected.
Without this protection, your deposit could vanish—and you’d have little legal ground to recover it.
Why Skipping a Conveyancing Lawyer is Not Worth the Risk
Many people assume hiring a lawyer for a subsale transaction is expensive. But let’s put this into perspective.
The typical legal fees for a conveyancing lawyer in Malaysia are based on a scale under the Solicitors’ Remuneration Order (SRO), and usually range between 1%–1.5% of the property’s value.
For a RM500,000 property, this comes to around RM5,000–RM7,500.
Now compare that to the potential losses:
- Losing a 10% deposit (RM50,000 for a RM500,000 property)
- Paying for hidden arrears left by the seller
- Facing years of delay in ownership transfer due to caveats or disputes
- Losing the entire property despite paying large sums of money
Clearly, the cost of a lawyer is tiny compared to the risk of massive financial losses.
How a Conveyancing Lawyer Protects You
To summarize, here’s how engaging a property lawyer makes your purchase safe:
Conducts due diligence – checks property status, title, arrears, and disputes.
Prepares and reviews SPA – ensures your rights are legally protected.
Safeguards your money – acts as a trustee through a client account.
Coordinates with banks and land offices – ensuring a smooth process.
Handles unexpected issues – such as disputes, delays, or caveats.
Essentially, your lawyer acts as a shield between you and potential risks.
Final Thoughts
Buying a subsale house without a lawyer may look like an easy way to cut costs, but it’s one of the riskiest financial decisions you could make. A conveyancing lawyer doesn’t just draft documents—they protect your investment, ensure your rights are upheld, and give you peace of mind throughout the transaction.
Think of it this way: You wouldn’t climb a mountain without safety gear. Similarly, you shouldn’t buy a house—the single biggest purchase of your life—without legal protection.
So if you’re planning to buy a subsale property, make sure a trusted lawyer is part of your team. The legal fees are minimal compared to the security and peace of mind you’ll gain.
For more details on engaging a qualified conveyancing lawyer in Malaysia, you can refer to the Malaysian Bar Council
