Property fees to increase after changes to lawyers’ rules, but buyers might get higher discounts

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MALAY MAIL. 13TH JULY: The latest revision in the Solicitors’ Remuneration Order (SRO 2023) gazetted yesterday will see some increase in costs for property buyers that will take effect this Saturday.

The new rules will see an increase to legal fees for conveyancing transactions involving non-contentious matters such as the sale and purchase of movable and immovable properties, and financing and tenancies in peninsular Malaysia.

At the same time, the upside for buyers is that some property transactions from licensed housing developers will automatically get up to a 50 per cent reduction in fees, depending on the value, The Star reported today.

Senior lawyer Datuk Roger Tan, who represented the Malaysian Bar in the Solicitors Costs Committee, confirmed the changes to the newspaper.

“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 per cent,” he was quoted saying.

Prior to this, the last amendment to the SRO was made in March 2017.

According to The Star, the conveyancing fees will translate to RM2,500 for property valued at RM200,000, RM6,250 (RM500,000), RM12,250 (RM1.1 million), RM16,250 (RM1.5 million) and RM76,250 (RM7.5 million).

Previously, the fees ranged between RM2,000 and RM48,000.

Tan also said although there was a general increase in the rate of the fee scale in respect of specified non-contentious business, solicitors may grant a discount of up to 25 per cent on the fees.

“The new fee scale under the SRO 2023 would generally increase the rate of the fee scale in respect of specified non-contentious business. However, this is necessary to cope with the increase in costs for lawyers,” he was quoted as saying.

Tan said that the Covid-19 pandemic’s effect on the economy had also impacted lawyers’ operating costs.

However, those who buy properties from developers who fall under the Housing Development (Control and Licensing) Act will automatically get up to a 50 per cent discount on conveyancing fees.

Before this, lawyers were only allowed to give a reduction of between 25 and 35 per cent, while before 2017, lawyers were not allowed to give any form of discount.

“This will help a lot of house buyers. It is a form of corporate social responsibility,” Tan was quoted as saying.