From 15 July 2023 onwards, expect to pay more in legal fees for certain conveyancing transactions in Peninsular Malaysia. This is due to the fees being raised as a result of a revision in the law to allow lawyers to cope with hikes in operating costs.
For the most part, changes to the legal fees will affect transactions involving non-contentious matters. These can include things such as the purchase of movable and immovable properties, tenancies, and financing, according to the Solicitors’ Remuneration Order (SRO 2023) that was gazetted on 11 July 2023.
Fortunately, there is some good news to come out of this change. Property transactions from licensed housing developers will see an automatic reduction in legal fees by up to 50%, depending on the value.
“The sale and transfer of property valued at RM500,000 and below will now be subject to a conveyancing fee of 1.25 per cent (previously 1 per cent).
“For properties valued between RM500,000 and RM7.5 million, the conveyancing fee is now 1 percent,” said senior lawyer Datuk Roger Tan, who represented the Malaysian Bar in the Solicitors Costs Committee (SCC).
The new conveyancing fees are as follows:
- RM2,500 for property valued at RM200,000
- RM6,250 for property valued at RM500,000
- RM12,250 for property valued at RM1.1 mil
- RM16,250 for property valued at RM1.5 mil
- RM76,250 for property valued at RM7.5 mil
Previously, the fees ranged between RM2,000 and RM48,000.
Back in 2005, the Solicitors Remuneration Order 2005 (now replaced by SRO 2023), was approved by the SCC and was meant to serve as a guideline to regulate the legal fees for conveyancing matters.
Generally speaking, conveyancing is the transfer of legal title of real estate from one owner to another. It usually covers non-court work such as sale and purchase agreements, tenancy agreements, lease agreements, transfers, loans and assignments.
While the proposed amendments will result in an increase in the rate of the fee scale in respect of specified non-contentious business, Tan also mentions that solicitors may grant a discount of up to 25% on the fees for specified non-contentious business.
“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.
