Have you ever came across a “Lelong” property advertisement while you are googling? Have you ever wondered why the price of the property is comparatively lower than the market price? Here it goes with the topic of the day where we will focus on one of the debt recovery methods commonly deployed in Malaysia, i.e. Writ of Seizure and Sale (“WSS”) of immovable property. If you do interest to explore other debt recovery methods, you may visit our Debt Recovery Series 101, where we have introduced several debt recovery process, inter alia Garnishee proceedings, and Writ of Seizure and Sale for movable property.

First of all, WSS for immovable property is governed under the Rules of Court 2012 (ROC 2012), specifically Order 47 of ROC 2012 where the essence of the procedures can be summarised as follows:-

1.         Firstly, you must obtain a Court Judgment in a Court of Law of Malaysia where it established the fact that a debtor owes you a legal debt (Obtain a Judgment and/or Court Order);

2.         Thereafter, you are required to make an application to a Court for an ex-parte Court Order, [summarily, it is an order obtained without the presence of your opponent] wherein it will prohibit a Judgment Debtor from dealing / transact a land / immovable properties registered under his name (Apply for a Prohibitory Order);

3.         If a Court delivers a Prohibitory Order (PO) against a Judgment Debtor in favour of you, you may now commence the second step to register the PO in the relevant land office / land registry (Registering a Prohibitory Order in the Relevant Land Office / Land Registry);

4.         Besides that, it is important to highlight that a PO will only last for 6 months. In other words, you should apply an extension from a Court prior to the lapse of previous PO. However, you should bear in mind that a Court will only grant such extension in the event that the special circumstances sufficed to warrant such extension. Hence, it is important to keep in mind that you should not procrastinate in filing the auction application within the lifetime of a PO (File Extension of Prohibitory Order if necessary);

5.         After the registration of a PO is duly completed in the relevant land office / land registry, you may now commence your auction application by filing the requisite application to a Court to appoint an auctioneer recognised by the Court to carry out the auction process.

6.        Subsequently, you have to liaise with the auctioneer to complete the necessary advertisement process to ensure the auction information is publicised and advertised in accordance to the Court order; (Complete the Advertisement Process)

7.        Thereafter, you have to pay a deposit equivalent to 3% of the fixed auctioned price for the Judgment Debtor’s immovable property as determined by a Court before the auction date; (Pay the Deposit); and

8.       On the fixed auction day, Judgment Debtor’s immovable properties will be auctioned off to the highest bidder. The proceeds of auction will be distributed according to the Court’s instructions. Thereafter, the judgment creditor will receive an appropriate amount to satisfy the judgment debt and the surplus (if any) will be returned to the debtor (Auction and Distribution of Funds).

It should be noted that the writ and seizure of the debtor’s immovable asset is far more complex and complicated than the summary above. Therefore, it is important and imperative for you to seek a professional legal advice to ensure all the legal processes are properly dealt with and to ensure the smoothness of your application.

Should you have any inquiries or require legal assistance, please do not hesitate to contact us at +6011-5657 1350 and reach us via email at lowzhigeneral@gmail.com.

Written By: Low Chee Hau, Melvin

Edited By: Yap Jian Zhi, Nicholas

Note: This article does not constitute legal advice in any case. The facts in each and every case will differ and you can contact us for complimentary legal advice.