Perfection of Transfer and Charge (POT & POC)
It is a process of transferring the ownership from the Developer to you and at the same time charge to a bank. Both transactions must be done simultaneously. You are not allowed to attend to either one if you are serving a loan.
The main reasons of attending to POT and POC are:-
- Contractual obligation under the loan documents;
- To safeguard your interest becoming a registered owner;
- For easier management of your estate if you pass away;
- To remove the interruption of the Developer in all dealings (ie. sale, charge & refinance) and imposing storage charges of the title, winding up of the Developer, exorbitant charges imposed by liquidator;
- Easier to locate your title because the bank will keep the title as the chargee bank.
Shall I delay the process?
Many people trying to delay in attending to POC & POT because of the cost of stamp duty. However, if you are having a loan, you cannot avoid this, due to your contractual obligation in the security documents. Some banks give you a time frame of 3 -6 months to attend. If you are not serving a loan, you may delay the process but you are taking own risk because of the reasons stated above.
Some owners may have experienced direct transfer in favour of a new potential buyer hence choose to delay in attending. This may not be practical at all time depending whether there is any restriction of interest (consent required for transfer) on the land and the developer’s cost of allowing direct transfer or batal ganti.
One of the purchasers/borrowers passed away
Complication arises when one of the purchasers/borrowers passed away. An executor/administration could not charge the property to the bank without a court order. With the agreement of the bank, perfection of transfer can be done together with an entry of lien holder’s caveat. Some banks opine that a lien holder’s caveat is unsecure and prefer not to allow the transfer. Therefore, POT can never be completed until settlement of loan by the other purchasers/borrower in ten or twenty years.
Conclusion
POT & POC maybe costly but the effect to protect you as a registered owner may be greater than saving the cost to attend to it. If you take your rights seriously and attended POT & POC, once your loan is duly settled, the very last step will be discharge of charge to remove the bank from the title. Congratulation, you have the title with you after many years of hard work to pay for it.