No cost to bear from Jalan Semarak land transfer?

Felda and Synergy Promenade’s legal battle is not expected to be a ‘usual’ one

By FARA AISYAH / Pic By MUHD AMIN NAHARUL

The Federal Land Development Authority (Felda) has regained ownership of 16 land parcels along Jalan Semarak, Kuala Lumpur (KL), estimated to be worth RM270 million which was reported to have been transferred to Synergy Promenade Sdn Bhd in 2015.

The Malaysian Reserve (TMR) recently reported Felda chairman Tan Sri Shahrir Abdul Samad as saying the developer has returned the land to Felda without any cost.

Yet, is it really possible for a land transfer to take place in Malaysia without bearing any cost?

Teh Kim Teh, Salina & Co senior partner Datuk Teh Tai Yong said payments have to be made in accordance with the laws and regulations of the land transfer procedure.

“I think Shahrir is referring to Felda’s part, when he said the land transfer was done without any cost.

“The only logical conclusion I can think of, is that all the costs were borne by Synergy Promenade,” Teh told TMR.

The lawyer said the parties are free to discuss and agree or disagree on who will bear the transaction costs.

He added that the biggest portion of the fees in a land transfer is the memorandum of transfer (MoT) stamp duty.

The MoT stamp duty for a land transfer with a value of RM200 million, is estimated to be about RM6 million.

For a land transfer valued at RM270 million, the MoT stamp duty is estimated to be about RM8.1 million.

Besides the MoT stamp duty, the parties have to pay about 0.5% of the value on legal fees, along with a Land Office registration fee of RM100 per KL Land Office title.

The above fees have to be made pursuant to the Stamp Act 1949 (MoT stamp duty), Solicitors’ Remuneration Order 2005 (legal fees), as well as the relevant land registration rules (land registration fees).

Teh added that the Land Office would usually take around two to four weeks to return the original title after the registration of the transfer. “The relevant parties would then make payment for the MoT stamp duty.

“The original title would be presented at the Land Office for transfer only after the payment of the MoT stamp duty,” he said. Felda and Synergy Promenade’s legal battle, however, is not expected to be a “usual” one.

A lawyer — who wanted to remain anonymous — told TMR that the situation is dependent on the scenario.

“It could be done swiftly and cleanly, if the land is unencumbered.”

Unencumbered refers to an asset or property that is free and clear of any creditor claims or liens.

“Other than that, there are no other payments to be made. The small amount of legal fees can be paid by Felda or by the developer,” the lawyer said.

Some plots of the land are already been used for the Kuala Lumpur Vertical City (KLVC) development.

Shahrir said the KLVC project is anticipated to continue under Synergy Promenade, and Felda will wait for the police and audit investigators to complete their investigations.

“We will hold discussions with Synergy Promenade soon to negotiate how best to implement the development agreement and to augment the project where it will benefit every party.

“I also think if the land is to be sold, the power of attorney given to the developer needs to be amended to a more limited form which is revocable.

“It should also require written authorisation from us first,” he said.

Felda — under the previously agreed terms between the two parties — will receive RM500 million, or 10%, of the project’s gross development value, depending on which is higher.