What Is a property mortgage?
A property mortgage is an agreement where the property owner (borrower) provides the title of their property as collateral to a financial institution (lender) as security for a housing loan. If the borrower fails to repay the loan, the lender has the right to auction the property to recover their money. The discharge of charge process is necessary to release the lender’s claim on the property once the loan is fully repaid, allowing the owner to regain full ownership.
Importance of Discharge of Charge for property mortgage
The discharge of charge for property mortgage is important as it frees the property owner from financial commitments to the bank or financial institution. Once the mortgage is discharged, the property owner will have full ownership of the property without any encumbrances.
Steps in the Discharge of Charge for property mortgage process
- Settling the Remaining Loan
- Applying for Discharge of Charge from the Bank
- Obtaining the Discharge of Charge Letter
- Registering the Discharge of Charge at the Land Office
- Paying the Discharge of Charge Registration Fees
Settling the remaining loan
The first step in the discharge of charge process is to settle the remaining loan balance. The property owner needs to contact the bank or financial institution to obtain information about the outstanding loan amount. Once the loan balance is settled, the bank will issue a payment receipt as proof that the loan has been fully settled.
Applying for Discharge of Charge from the bank
After settling the loan balance, the property owner needs to apply for a discharge of charge from the bank. This process involves filling out an application form and submitting the required documents such as a copy of the identity card, loan payment receipt, and mortgage agreement copy.
Obtaining the Discharge of Charge letter
The bank will process the discharge of charge application and issue a Discharge of Charge Letter. This document is the official proof that the mortgage has been settled and the bank no longer has any claims on the property. The letter needs to be signed by an authorized person at the bank and stamped with the bank’s official seal.
Registering the Discharge of Charge at the land office
The next step is to register the Discharge of Charge Letter at the Land Office where the property is located. This registration will update the land records to show that the mortgage has been discharged and full ownership has been returned to the property owner. The property owner needs to bring the following documents to the Land Office:
- Original Discharge of Charge Letter
- Copy of the property owner’s identity card
- Discharge of charge registration application form
- Receipt for the registration fee payment
Paying the Discharge of Charge registration fees
To register the discharge of charge, the property owner needs to pay the registration fee to the Land Office. The fee varies by state and property type. Once the payment is made and the documents are submitted, the Land Office will process the registration and update the land records.
Importance of registering the Discharge of Charge
Registering the discharge of charge at the Land Office is important to ensure that the land records show that the property owner has full ownership without any encumbrances. This is important to avoid any future issues or disputes, especially if the property owner wants to sell or transfer the property.
Here are some of the costs involved in the discharge of property mortgage
Costs for Discharge of Charge if the property already has a land title deed
| State | Legal Fees | Miscellaneous Expenses (Transport, Postage, Photocopy & Others) | Stamp Duty Fee | Registration Fee at Land Office (1 Power of Attorney) | Registration Fee at Land Office (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 Discharge of Charge if the property does not have a land title (Deed of Receipt and Reassignment)
| Item | Amount |
|---|---|
| Legal Fees | RM400 |
| Miscellaneous Expenses | RM400 |
| Stamp Duty Fee | RM40 |
| Registration Fee at Court | Below RM100 (depending on the number of pages in the agreement) |
Note: Costs may vary depending on your case and the services offered by the lawyer. Additional costs may be incurred for services such as document stamping and official property searches.
Tips and guidance for the Discharge of Charge process
- Regularly Check Loan Balance: Ensure you monitor your loan balance and make timely payments to avoid any penalties.
- Keep All Documents: Keep all documents related to your housing loan and mortgage, including payment receipts, mortgage agreement, and correspondence with the bank.
- Contact the Bank Early: When you are close to settling the loan balance, contact the bank early to start the discharge of charge process. This will help speed up the process and avoid any delays.
- Seek Professional Help: If you are unsure about the discharge of charge process, consider seeking help from an experienced lawyer or property agent.
Conclusion
The discharge of charge for property mortgage in Malaysia is a crucial process for property owners to gain full ownership of their property after settling the housing loan. This process involves several steps, including settling the loan balance, applying for a discharge of charge from the bank, obtaining the Discharge of Charge Letter, and registering the discharge at the Land Office. By following these steps and keeping all documents properly, property owners can ensure a smooth discharge of charge process and gain full ownership without any issues.
To ensure a hassle-free process, it is recommended to use professional lawyer services from khidmatguaman.my. By using professional legal services, you can ensure that all procedures are followed correctly and documents are properly prepared, reducing the risk of any errors or delays in the discharge process. Lawyers from khidmatguaman.my will assist you in every step, from settling the loan balance to registering the discharge at the Land Office, ensuring you can enjoy full ownership of your property without any issues.
Using lawyer services not only provides peace of mind but also ensures that the process runs more efficiently and is free from any mistakes that might cause complications later on.
