|Individual title||Strata title|
|Issuance||Issued to landed properties.||Issued to strata properties.|
|Type of homes||Landed homes:
||Individual units of high-rises:
May also include landed homes in gated and guarded (G&G) communities.
|Ownership||The buyer owns both the land and the property.||
|Responsibilities||Individual responsibility.||Includes obligations for shared maintenance.|
|Ease of finance||Acquiring finance is easier and more accessible.||Acquiring finance might be easy but by comparison, has more difficulties.|
Looking to purchase any property? Do you know what type of ownership you’ll be receiving? Here, we detail the differences between a strata title, a master title and an individual title, and how they will affect you as an owner.
Purchasing a piece of property isn’t as simple as buying goods in a convenience store. The type of property you purchase will determine the type of ownership you receive and ultimately, your rights.
From a legal perspective, ownership of a property is represented by a land title. Without it, you won’t be able to sell, transfer, or use it as collateral.
There are three types of land titles in Malaysia:
- Master title
- Individual title
- Strata title
What is a master title?
A master title is an ownership document issued during the construction and development stage of a property. It is usually registered under the name of the proprietor and/or developer.
Separate units under this development will then be divided and sold into individual titles or strata titles. The common areas and shared facilities such as playgrounds, swimming pools, and outdoor areas will remain under the master title.
As this article is intended for you, as one of the purchasers of these separate units, we will only focus on the differences between an individual title and a strata title.
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What is an individual title?
An individual title is an ownership document issued when you are the sole owner of an entire piece of land. This is usually reserved for landed properties such as semi-D houses, terrace houses, and bungalows.
In a nutshell, it lays out the extent of the property, various conditions that relate to that ownership, and the name of the person who now owns it.
Once the developer has completed the construction of the wider development, an individual title can be applied for and issued to register ownership of this separate parcel of land and the relevant property on it.
The duration of your ownership will depend on the type of land:
- If it’s a freehold property, the individual title that hosts the land and property belongs to you forever.
- If it’s a leasehold property, the individual title is yours depending on the duration of the lease. For example, if the lease states duration of 99 years, you would either have to return the land to the state government or pay a lease extension premium after this period ends.
- If it’s a Bumi property, the individual title will depend on the terms of land (freehold or leasehold).
Want to learn about the difference between freehold vs leasehold properties? Read this: Freehold vs Leasehold: Which land title is better? And all about Bumi LotCheck out properties for sale
What is a strata title?
To answer this question, we first need to know what is strata. By definition, strata property is defined as a development or scheme where the building or land is carved out into different lots or ‘parcels’.
High-rise residences such as flats, apartments, condominiums, and townhouses are typical strata properties. However, landed homes in gated and guarded (G&G) communities may also be included in this category. An example of the latter is Desa ParkCity in Kepong.
A strata title is a separate individual title issued towards an individual unit of a strata property.
If this is still a little confusing, here’s a summary of who owns what in a strata development:
- Each particular apartment/condo unit or parcel will belong individually to you and other unit owners. Each one of you will have your own strata title.
- The land under the strata titles belongs to the owners or developers of the property.
- Common areas such as the swimming pool, gym, elevators, and lounge are shared areas and do not belong to any individual strata unit holder. The maintenance and management of these common properties are covered by the Strata Management Act 2013 (SMA) and enforced by an officer known as the Commissioner of Buildings (COB).
Living in a strata property also means that you’re obligated to pay for the sinking funds and maintenance fees. If you refuse to pay, the building management can enter your unit, auction your items and take legal action against you. You will also lose your right to vote during the Management Corporation’s AGM
Read more: It’s important to know your rights as a strata property owner in Malaysia. Here, we list down ways to find out if your building is managed by the right management, common issues in high-rises and how to exercise your rights as a strata owner:
- Is your strata property being managed by the right JMB or MC?
- What are the common issues in strata living and how to solve them?
- A beginner’s guide for strata property owners in Malaysia
When should the strata title be issued?
Under the Strata Titles Act 1985, developers are required to apply for the strata titles on behalf of the purchasers. When the strata title is issued, the person who owns the property can use the property like how it is used for an individual title.
Furthermore, the Strata Titles (Amendment) Act 2013, states that strata titles are to be issued upon vacant possession (VP) of the property. Therefore, homeowners can expect to receive their strata titles, along with keys and other ownership documents, the moment that they are informed that VP can be obtained from the developer.
How do you check the issuance of a strata title?
It’s a simple process. Homeowners either call the local land authority, such as the Selangor Land and Mines Office or conduct a quick search on the e-Tanah system using the master title details. They would usually have the details of the master title in their Sale and Purchase Agreement.
The strata title application process happens on the developer’s end, and therefore, not many homeowners would be able to track the various application stages. However, they may call the developer to ask if the developer has applied for the strata title and what stage is it at.
Why is it important to obtain a strata title?
For homeowners, it is important that they get, keep, and preserve the strata titles to their high-rise apartment units. This is due to the following reasons:
- It serves as proof of ownership of the apartment/condo.
- It is used as an instrument of charge to banks for loans.
- The issuance of the strata title will initiate the formation of the management corporation (MC) by the owners of the apartment/condo.
- It serves as proof of the built-up area of your unit and the apportionment of your share in the total aggregate units. This enables the calculation of the maintenance fees by the Management Committee.
- Having a strata title can prevent complications should the developer come under liquidation or become insolvent.
What happens if you don’t get your strata title?
The major consequence of any delay in issuance of the strata title is that according to the master title, the land legally belongs to the developer (or the registered proprietor) and the homeowner only has beneficial ownership of their respective parcels.
This can become problematic when through a perfect storm of events; the homeowner finds that they are unable to prove ownership of their parcel without the strata title being registered under their name.
Why is it important to know the differences between an individual title and a strata title?
As we have detailed, each title results in a different type of ownership and set of rights. In the end, it all boils down to preference. To make it easier for you to make a comparison, we’ve summarised the differences between an individual title and a strata title below:
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