What Is a Property Mortgage?
A property mortgage is an agreement where the property owner (borrower) offers the title of their property as collateral to a financial institution (lender) as security for a housing loan. Once the borrower repays the loan, the discharge of charge process releases the lender’s claim, allowing the owner to regain full ownership.
Importance of Discharge of Charge for Property Mortgage
The discharge of charge is crucial as it frees the property owner from financial obligations to the bank or financial institution. Once discharged, the property owner has full ownership without any encumbrances.
Steps in the Discharge of Charge Process
1. Settling the Remaining Loan
The first step is to settle the remaining loan balance. Contact the bank to obtain information about the outstanding amount. Once settled, the bank will issue a payment receipt as proof.
2. Applying for Discharge of Charge from the Bank
After settling the loan, apply for a discharge of charge by filling out an application form and submitting required documents such as:
- Copy of identity card
- Loan payment receipt
- Mortgage agreement copy
3. Obtaining the Discharge of Charge Letter
The bank processes the application and issues a Discharge of Charge Letter. This document proves the mortgage is settled and must be signed by an authorized bank official.
4. Registering the Discharge of Charge at the Land Office
Register the Discharge of Charge Letter at the Land Office to update land records. Bring the following documents:
- Original Discharge of Charge Letter
- Copy of identity card
- Registration application form
- Receipt for registration fee payment
5. Paying the Discharge of Charge Registration Fees
Pay the registration fee at the Land Office. Fees vary by state and property type. Once paid, the Land Office processes the registration and updates records.
Importance of Registering the Discharge of Charge
Registering ensures land records reflect full ownership without encumbrances, preventing future disputes, especially if selling or transferring the property.
Costs Involved in the Discharge of Property Mortgage
Costs for Properties with a Land Title Deed
| State | Legal Fees | Miscellaneous Expenses | Stamp Duty Fee | Registration Fee (1 Power of Attorney) | Registration Fee (2 Powers of Attorney) | Property Search Fee |
|---|---|---|---|---|---|---|
| Selangor | RM300 | RM450 | RM10 | RM70 | RM90 | RM80 |
| Kuala Lumpur | RM300 | RM450 | RM10 | RM70 | RM90 | RM80 |
| Johor | RM300 | RM500 | RM10 | RM90 | RM120 | RM180 |
| Perak | RM300 | RM500 | RM10 | RM60 | RM80 | RM60 |
| Negeri Sembilan | RM300 | RM500 | RM10 | RM110 | RM180 | RM120 |
Costs for Properties Without a Land Title
| Item | Amount |
|---|---|
| Legal Fees | RM400 |
| Miscellaneous Expenses | RM400 |
| Stamp Duty Fee | RM40 |
| Registration Fee at Court | Below RM100 (varies by agreement pages) |
Note: Costs may vary depending on the case and services provided by the lawyer. Additional costs may include document stamping and official property searches.
Tips and Guidance for the Discharge of Charge Process
- Regularly Check Loan Balance: Monitor your loan balance and make timely payments to avoid penalties.
- Keep All Documents: Retain all documents related to your loan and mortgage.
- Contact the Bank Early: Start the discharge process early to avoid delays.
- Seek Professional Help: Consider hiring an experienced lawyer or property agent if unsure about the process.
FAQ
What is a Discharge of Charge?
A Discharge of Charge is a legal document that proves a mortgage has been fully paid and the lender no longer has a claim on the property.
Why is it important to register the Discharge of Charge?
Registering ensures the property records are updated, showing full ownership without encumbrances, preventing future legal issues.
How long does the discharge process take?
The process can vary depending on the bank and Land Office, but it typically takes a few weeks.
Can I handle the discharge process myself?
Yes, but it may be beneficial to seek professional help to ensure all procedures are correctly followed.
Conclusion
The discharge of charge for property mortgage in Malaysia is vital for property owners to gain full ownership after settling the loan. By following these steps and keeping documents organized, owners can ensure a smooth process.
For a hassle-free experience, consider professional legal services from us. Our lawyers will guide you through each step, ensuring all procedures are correctly followed, reducing the risk of errors or delays. This service provides peace of mind and ensures efficiency throughout the process.
