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Property legal fees to rise


Much-awaited move: Tan (left) with Mohamad Zabidin after the approval of the SRO 2023.

PETALING JAYA: Starting Saturday, most legal fees for conveyancing transactions in Peninsular Malaysia will be increased due to a revision in the law to allow lawyers to cope with hikes in operating costs.

The changes will affect transactions involving non-contentious matters such as the sale and purchase of movable and immovable properties, financing and tenancies, according to the latest Solicitors’ Remuneration Order (SRO 2023) gazetted yesterday.

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ALSO READ: Up to 50% discount on lawyers’ fees for buyers

However, there is good news as well. Property transactions from licensed housing developers will automatically get up to a 50% reduction in fees, depending on the value.

When contacted, senior lawyer Datuk Roger Tan, who represented the Malaysian Bar in the Solicitors Costs Committee (SCC), confirmed the changes in the fees and the SRO 2023 that will take effect on Saturday.

“The sale and transfer of property valued at RM500,000 and below will now be subject to a conveyancing fee of 1.25% (previously 1%). For properties valued between RM500,000 and RM7.5mil, the conveyancing fee is now 1%,” added Tan.

The conveyancing fees will translate to RM2,500 for property valued at RM200,000, RM6,250 (RM500,000), RM12,250 (RM1.1mil), RM16,250 (RM1.5mil) and RM76,250 (RM7.5mil).

Previously, the fees ranged between RM2,000 and RM48,000. (See the table for more details.)

Tan also confirmed that the SCC approved the new SRO 2023 on July 4. The last revision was done in March 2017.

The SCC is chaired by Chief Judge of Malaya Datuk Mohamad Zabidin Mohd Diah, with Suzana Atan representing the Attorney General’s Chambers, representative of the Chief Registrar of the Federal Court Azhaniz Teh Azman Teh and four representatives from the Malaysian Bar led by Tan.

Other members of the committee are lawyers Chiah Kim Chai, Zemilah Mohd Noor and Andrew Wong Fook Hin.

In 2005, the Solicitors Remuneration Order 2005 (now replaced by SRO 2023) was approved by the SCC as a guideline to regulate the legal fees for conveyancing matters.

Conveyancing basically covers non-litigation (non-court) work that includes sale and purchase agreements, tenancy agreements, lease agreements, transfers, loans and assignments.

Tan said although the proposed amendments would generally increase the rate of the fee scale in respect of specified non-contentious business, solicitors may grant a discount of up to 25% on the fees for specified non-contentious business.

“The new fee scale under the SRO 2023 would generally increase the rate of the fee scale in respect of specified non-contentious business. However, this is necessary to cope with the increase in costs for lawyers.

“The increase in costs has been made particularly acute by the Covid-19 pandemic and its impact on the economy. Lawyers’ operating costs have also risen significantly in the last few years,” said Tan.

“I hope the public will treat and respect lawyers as professionals who are bound by this order. Just like lawyers are not allowed to overcharge, the public must not pressurise lawyers to give unpermitted discounts on the prescribed fees,” he added.

“One does not ask for a discount when one consults a doctor. Here, the lawyer’s job is to protect and uphold your legal rights to your property as a vendor, purchaser, borrower, landlord and tenant.”

Malaysian Bar president Karen Cheah said there is a need to increase the scale and fixed fees chargeable to ensure lawyers are able to cope with the current financial situation.

“The Bar had embarked on the revision exercise to the SRO last year, where the views of its members were sought in August last year,” Cheah said when contacted by The Star.

“As a result of the feedback obtained, the Bar prepared a list of revisions and wrote to the Chief Judge of Malaya pursuant to the Legal Profession Act 1976 to establish the SCC,” she said.

“The SCC was then subsequently established and met on March 24, 2023, where the proposed revision was accepted and approved.”

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