Yew Huoi, How & Associates | Leading Malaysia Law Firm

Menu

CONTRACT LAW – SALE & PURCHASE AGREEMENT – DOCTRINE OF BARE TRUSTEE

I bought a unit of condominium from a developer. The developer was supposed to deliver separate strata title for my unit. That was not done. Years later, I discovered that the land of which the condominium was built was sold to Company Z. Can Company Z claim ownership of the condominium and later have me evicted?

  • No. The developer who sold the condominium unit is merely holding the unit in trust for the purchaser.
  • The developer is merely the registered proprietor of the undivided land which housed, inter alia, the condominium unit. In law, the developer is treated as a constructive trustee.
  • The condominium unit is beneficiary owned by the purchaser who bought the unit pursuant to a valid sale and purchase agreement (“SPA”).

What is a constructive trust?

  • A constructive trust is imposed by equity to satisfy the needs of justice and good conscience. It is a rule in equity which has the force of law.
  • For example, when a purchaser has paid full purchase price for a property, the vendor is treated in law a constructive trustee even though the unit has not been formally registered in the name of the purchaser. The property might still be registered in the name of the vendor as trustee for the purchaser. This is known as the doctrine of bare trustee. The principle of fairness and good conscience dictates that the vendor cannot claim beneficial interest to the property after having benefitted from the payment of full purchase price.
  • In the present instance, as constructive trustee, the developer is not allowed to sold the unit or the land that housed the unit to Company Z. Company Z cannot assert claim for beneficial interest for the unit which the developer does not have.

Can I apply for the Condominium Unit to be transferred to me later.

  • Yes. You may apply for specific performance so that the condominium unit is transferred to your name when the strata title is issued.
  • This is notwithstanding, the land now is registered in the name of Company Z.

If my SPA is signed 20 years ago, can Company Z rely on Limitation Act to defeat my application?

  • It depends whether the formal request to transfer has exceeded 6 years of limitation. If you have only requested for the unit to be transferred now, time would only start to run now. Limitation would not have set in.

(Case in Point: Pihak Berkuasa Kemajuan Pekebun Kecil Perusahaan Getah (RISDA) v Koperasi Ladang Pekebun-Pekebun Kecil Malaysia Bhd [2022] MLJU 255)

Back to Latest Legal Updates

Recent Post

STRATA MANAGEMENT – MANAGEMENT FEE SHOWDOWN – RESIDENTIAL VS. COMMERCIAL – WHO’S PAYING FOR THE EXTRAS?

In a landmark decision in Aikbee Timbers Sdn Bhd & Anor v Yii Sing Chiu & Anor and another appeal [2024] 1 MLJ 94 , the Court of Appeal clarified the rules on maintenance charges and sinking fund contributions in mixed strata developments. Developers and management corporations can impose different rates based on the distinct purposes of residential and commercial parcels. The judgment emphasizes fairness, ensuring residential owners bear the costs of exclusive facilities like pools and gyms, while commercial owners aren’t subsidizing amenities they don’t use. This ruling highlights the importance of transparency in budgeting and equitable cost-sharing in mixed-use properties.

Read More »
16 December ,2024 No Comments

ILLEGALITY OF UNREGISTERED ESTATE AGENTS’ CLAIM – FINDER’S FEES AND ILLEGALITY: COURT DRAWS THE LINE ON UNREGISTERED ESTATE AGENTS

In a pivotal ruling, the Court of Appeal clarified that finder’s fee agreements are not automatically void under the Valuers, Appraisers, Estate Agents and Property Managers Act 1981. The Court emphasized that illegality must be specifically pleaded and supported by evidence, and isolated transactions do not trigger the Act’s prohibition. This decision highlights the importance of precise pleadings and a clear understanding of the law’s scope.

Read More »
16 December ,2024 No Comments

COMPANIES ACT – OPPRESSION – DRAWING THE LINE: FEDERAL COURT DEFINES OPPRESSION VS. CORPORATE HARMS

In a decisive ruling, the Federal Court clarified the boundaries between personal shareholder oppression and corporate harm, overturning the Court of Appeal’s findings. The Court held that claims tied to the wrongful transfer of trademarks belonged to the company, not the individual shareholder, reaffirming that corporate harm must be addressed through a derivative action rather than an oppression claim.

Read More »
16 December ,2024 No Comments

COMPANIES LAW – WHEN DIRECTORS BETRAY: COURT CONDEMNS BREACH OF TRUST AND CORPORATE MISCONDUCT

In a stark reminder of the consequences of corporate betrayal, the court found that the directors had systematically dismantled their own company to benefit a competing entity they controlled. By breaching their fiduciary duties, conspiring to harm the business, and unjustly enriching themselves, the defendants were held accountable through significant compensatory and exemplary damages, reaffirming the critical importance of trust and integrity in corporate governance.

Read More »
16 December ,2024 No Comments

JURISDICTION – CHOOSING THE RIGHT COURT: THE SEA JUSTICE CASE HIGHLIGHTS WHERE MARITIME DISPUTES SHOULD BE HEARD

In The Sea Justice cases [2024] 2 Lloyd’s Rep 383 and [2024] 2 Lloyd’s Rep 429, the Singapore courts tackled a key question: which country should handle a maritime dispute when incidents span international waters? After examining the location of the collision, existing limitation funds in China, and witness availability, the courts concluded that China was the more appropriate forum. This ruling highlights that courts will often defer to the jurisdiction with the closest ties to the incident, ensuring efficient and fair handling of cross-border maritime disputes. This approach is also relevant in Malaysia, where similar principles apply.

Read More »
17 November ,2024 No Comments
en_USEN
zh_TWZH ms_MYMY en_USEN
× Contact Us