I attended kursus at MIEA Sarawak Branch – PEA Course.
Title vs no Title
When a property is without title (under construction) or the title has not been issued from the land office, the developer is the party who shall make the proper submission to the authority to subdivide the master title to individual titles (unless you have a private land, and construct your own house on it). Now, this development requires many processes of approval and payment of fees. One of the fees is development charge. Like you go to renew your car road tax, you need to first buy a minimum third party insurance policy to cover your vehicle, then with the electronic system online, you pay for the road tax levied. Without the insurance policy for vehicle, JPJ will not issue you the renewal.
The process in the land office is much more than just payment of fees and development charges, mind you! Hence, if the developer cannot or does not fulfil certain requirement the individual titles will not be issued. It is like you never pay for your ticket, there is no seat in the cinema (ownership of your seat)!
Such is the case when some purchasers who bought properties without title, resale the property to the next buyer – the deed of assignment has to document all the owners in sequence. You Sale and Purchase Agreement will document all the previous owners. This is the deed system of land administration in some countries.
Now, when a developer is a company, this just become even more complicated. What if the developer company goes under? You can have developer company doing fine in the first project, but subsequent project it went over budget and cannot pay for all the fees and charges required! So, there is no more company, and no more payment of fees to the land office to issue your titles. In such instances, the buyers are left high and dry!
That is very real, and much has been done to ensure mechanism of issuance of titles be smooth upon vacant possession. Still, title is a very important document. A property with title is more valuable than one which is not.