Introduction

In any property deal, due diligence is the magic that transforms chaos into clarity. It is like a complex puzzle. Each piece – the initial process, the land search, the ownership history, the state and nature of the property itself – must fit together to create a harmonious outcome. This guide equips the Purchaser with invaluable insights on the due diligence manner from a legal perspective to ensure a seamless and informed transaction process.

Before you say I-do

Before boarding on the property purchase journey, it is crucial to establish a solid financial foundation. Conducting a comprehensive assessment of your budget, including potential monthly payments and deposit requirements, is essential. Malaysian employees contributing to the Employees Provident Fund (EPF) may consider utilizing funds from Account 2 for the deposit.

Property Inspection and Assessment

Upon deciding to proceed with the purchase, it is important to conduct a meticulous physical inspection of the property. This involves evaluating the property’s condition, identifying any structural deficiencies, and anticipating potential renovation or repair needs. Clarifying the inclusion of fixtures and fittings and documenting the property’s current state through photography can be used as evidence during negotiation with the Vendor especially if there are visible issues or defects that need to be addressed.

Land Search and Ownership Verification

Conducting a land search before committing to a property purchase is crucial as this mundane task will reveal crucial information that could impact the entire sale and purchase process.

The land search reveals essential information such as land tenure, whether it is erected on a leasehold or freehold land which will influence tenure and ownership rights. Additionally, knowing if the property is still under master title or issued strata title discloses not only who is the registered owner but also if developer’s consent is prerequisite for the sale and purchase. You might need to conduct a further search if a caveat has been lodged on that property for whatever reason.

By ensuring that the Vendor holds the legal right to sell with or without the state authority consent, you mitigate the risk of purchasing a property riddled with disputes or conflicting claims. Do not be misled by the representative. A bankrupt Vendor must obtain a sanction from Insolvency Department. On the other hand, you might need to acquire the beneficiaries’ approval and the Court order prior to the purchase from a deceased Vendor.

Sale and Purchase Agreement (SPA)

The SPA serves as the comprehensive blueprint for the property transaction, encapsulating critical clauses including but not limited to the purchase price, deposit amount, completion date, conditions precedent, possession conditions, warranties, defect liability, and termination rights.

Special considerations may arise, particularly concerning properties with unique features such as elevators or swimming pools, which may necessitate the inclusion of an extra warranty period to cover any associated risks or maintenance requirements. Ultimately, once your name is endorsed on the issued document of title, the property is legally yours.

Conclusion

Owning your dream property is a significant milestone, and ensuring a smooth and secure journey requires thorough due diligence. Remember, due diligence isn’t just a formality; it’s an investment in peace of mind and the foundation for a successful property transaction.

By Rahayu Partnership, Malaysia
Law Firm Website: www.rahayupartnership.com

War has far-reaching consequences that extend beyond the battlegrounds. Shipping plays a pivotal role in the global economy, facilitating the movement of goods across borders and connecting nations. In times of war, the effects on shipping can be both immediate and enduring, impacting various aspects of the industry.

Insurance Costs

Inherent risks associated with shipping are exacerbated during times of war. Insurance costs for maritime assets skyrocketed at an unaffordable rate as insurers factor elevated threat of damages, loss, or seizure. Insurers might also impose additional premiums or exclude certain regions from coverage altogether. The London Market’s Joint War Committee (JWC) publishes a list of areas of perceived enhanced risk in relation to hull war, strikes, terrorism and related perils.

Once an area is perceived as a ‘High Risk’ area, the underwriter shall give a notice to the standard war risk insurance subscriber, canceling and reinstating the insurance policy excluding the new high risk area from coverage.

Ukraine-Russia War

This is one of the effects of the Ukraine-Russia War, where vessel owners who subscribes to the standard war risk insurance are no longer covered. Owners might have to purchase additional premiums insurance coverage, when the Black Sea adjacent to Ukraine-Russia is listed as a ‘High Risk’ area.

Gaza-Israel War

Currently, vessels are attacked by drones, missile strike, and seized by the Yemen’s Houthis in the Red Sea as a global consequence of the Israel-Gaza war. The Houthis have threatened to target Israeli vessels in the waterway, demanding Israel to stop the aggression towards Gaza. In response to these attacks, the JWC has widened the ‘High Risk’ area in the Red Sea.

Constructive Total Loss (CTL)

Vessels in a war-torn region often suffer from destruction, attacks, seized, or trapped. CTL is whereby the vessel is effectively loss but not actually destroyed, is a unique concept in marine insurance. In claiming CTL, Owners must show they have been deprived of ownership of the vessel within reasonable time, also called as the “Bamburi test”.

This test was developed during the Iran-Iraq Tanker War in the 1980-1988, where almost 70 vessels were trapped in the Persian Gulf during the war. Justice Staughton in The Bamburi [1982], held that a 12-month duration is deemed satisfactory to determine what is regarded as “reasonable time”.

Notice from Owners is required to address the situation to relevant parties such as the banks, charterers, insurers, and cargo owners. Subsequent notice is essential after the expiration of the 12-months period and a proper notice of abandonment shall be given. Owners must ensure that the vessel is unlikely to be recovered at the time these notices were sent.

Conclusion

The effect of war on the shipping industry is a complex interplay of geopolitical, and economic factors. From disruptions of trade routes and increased security concerns, and to the rising costs on insurance and damages which affect the global economy, the shipping industry must adapt to the challenges posed in the ever-changing landscape of war, finding ways to navigate through troubled waters.

By Rahayu Partnership, Malaysia
Law Firm Website: www.rahayupartnership.com