A Personal Finance Blog for Malaysian: If he tries to be funny, I'll caveat his property !!! [sound familiar?]

Monday, October 18, 2010

If he tries to be funny, I'll caveat his property !!! [sound familiar?]

In any property deal, the buyer's lawyer will enter into a Private Caveat before the completion of the transaction.

As provided under the National Land Code 1965 (the NLC), there are 3 types of caveats:
  1. Private caveat (section 323 of the NLC);
  2. Lien-hikder's caveat (section 330 of the NLC);
  3. Registrar's caveat (Section 319 of the NLC).
The Private Caveat (PC) is the one most commonly used and is usually the kind of caveat one would refer to when the property deal is not proceeding well.

What are the effect of a caveat?
It has the effect of prohibiting the registration of any instrument of dealing, the endorsement of tenancies exempt from registration and the entry of further lien-holder's caveats in respect of the land. As such, a caveat is a measure for a temporary preservation of ones rights and/or interest over the land in issue.

In order to lodge a PC, you need to fulfill one of the following:-

(a) any person or body claiming title to, or any registrable interest in, any alienated land or any right to such title or interest; or

(b) any person or body claiming to be beneficially entitled under any trust affecting any such land or interest; or

(c) the guardian or next friend of any minor claiming to be entitled as mentioned in para (b).

If any one of the above requirements is met, one is said to have a "caveatable interest", which would entitle the lodgment of a PC on the land. If wrongfully lodged, without a caveatable interest, you may be sued for damages under Section 329 of the NLC. Don't play play.

The most commonly perceived "caveatable interest" is the payment of a deposit or earnest money. The true position is that that payment alone does not confer a caveatable interest on the purchaser of the land. Such payment of deposit or earnest deposit must be accompanied with an execution of a sale and purchase agreement in order for a caveatable interest to be said to have arisen.


  1. How much is the cost for Private Caveat?

  2. I remember is less than RM500 - a lawyer can give you more precise quote. normally they will do it in conjunction with any sale and purchase agreement.

  3. I am purchasing an apartment for rm175,000. My lawyer is charging RM710 for a private caveat.

    it's a subsale. I'm wondering, do I really need it?

  4. Hi Aidila,

    It is a Standard Procedure for your benefit.

    If you would like to save this amount, check with your lawyer to skip it, at your own risk.

  5. Hi mr chong,
    i purchasing an apartment MYR 147k, my lawyer said caveat is MYR 3k. Is it right or rip off?