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Question:
“Hi Lawyer Yeo, I am writing to inquire about retrieving the original title deed (Geran) for the shophouse I purchased 15 years ago. I recently settled my loan on the property and would like to get the original deed back from the bank.”
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“When I went to the bank to obtain my title deed on my own, I was informed by the banker that I must engage a law firm to make an application (with them) for the release of the original title. Thereafter, I need to apply discharge of bank’s charge with the Land Office so as to obtain a new title deed.”
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“Frankly, I’m unsure about the purpose of the Discharge of Charge nor why a new title deed is necessary. Could you please explain these steps in simpler terms and advise on the documents I need to provide to move forward? Thank you”
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Answer:
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1. After a borrower finished paying off their mortgage, he/she must go through a legal process called a Discharge of Charge (DOC) to regain full ownership of the property. In brief, it is a two-step process that involves: a) retrieving the original title deed from the bank; and b) removing the bank’s charge on the title.
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2. The reason the DOC is compulsory is that when a borrower takes out a loan, the borrowing bank will immediately register a legal interest in the property (often called a charge) with the land office.
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3. This bank charge will be registered and printed on the property’s title deed. Until the DOC is completed and the charge is removed, even if the loan has been fully settled, the borrower still cannot transfer the property either by sale or inheritance.
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4. Therefore, after paying off the loan, the borrower needs to appoint a law firm to handle the DOC. The documents needed to be provided are as follows:-
- A copy of the borrower’s ID card
- Copies of the latest paid property tax and assessment tax for the relevant property
- Bank documents with the mortgage loan number
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5. Upon receiving these documents, the borrower’s lawyer will prepare a letter of authorization for the borrower to sign. The lawyer will then apply to the borrowing bank for the return of the original title deed, the original sale and purchase agreement, the original loan agreement, and the discharge of charge form (16N) signed by the bank’s attorney to the law firm.
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6. Afterward, the borrower’s lawyer will assist the borrower in presenting the signed 16N along with the original title deed to the land office to apply for a new title deed. The new title deed will be a clean title without any bank charge/ information, containing only the property owner’s details.
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7. Once the new title deed is obtained, the lawyer will immediately notify the client to collect the title deed, thus completing the Discharge of Charge process.
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8. Generally, the entire Discharge of Charge process takes about 3-5 months, depending on how long the bank returns the original title deed to the law firm, and how fast the land office issues the new original title deed.
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The above is the legal information we would like to share with our readers today with regard to the process of discharge of charge in Malaysia. If you have any legal questions about this legal process, you can contact us via WhatsApp: https://wa.link/q3kmv5
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Also, if you want to know what charges need to be paid by foreign beneficiaries when inheriting a Malaysian property, you can read our article https://www.yeolaw.my/can-a-foreigner-inherits-property-in-malaysia/
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