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Most of us would have seen advertisements for the sale of property by way of court auction. If a specific property has caught your attention and you intend to bid for the property at an auction in Court, here are a few things you need to be aware of:

  1. Read the proclamation of sale carefully

This should go without saying, but it’s not uncommon for the fine print to get overlooked. The proclamation of sale provides details of the land, including whether it is Malay reserved, has any conditions in respect of use or whether there are any caveats entered on the title document. Read the proclamation of sale carefully! If you require any further details or any clarification, always contact the auctioneer or the lawyers named in the proclamation before conducting any searches or investigation of your own; they are more helpful than you think.

Proper enquiry into the property or land you intend to bid for will save you a significant amount of legal fees later on (e.g. in respect of making applications to change use of the property or land or to remove a caveat.)

  1. Court’s timing

On the day of the auction, the bank draft amounting to 10% of the reserve price must be entered into the “Peti Lelongan” before 9.30 am. The Court is very strict in not accepting any bank drafts entered after 9.30 am in accordance to the clock inside the auction room. This means that it doesn’t matter that the time on your mobile device is 9.25 am if the time shown on the Court’s clock is 9.33 am.

  1. Details and / or documents to be provided

If you are bidding for yourself, your name, national registration identity card number, most up to date address and the case execution number (which can be found on the proclamation of sale and looks something like “WA-38-1234-09/2019”) must be clearly written at the back of the bank draft.

If you are however bidding on behalf of a company, the information required to be written on the back of the bank draft are the company’s name, company number, registered address and the execution case number. A copy of the company’s Form 49, the memorandum and article of association as well as the directors’ resolution (to bid at the auction) must be attached with the bank draft.

In the event these requirements are not complied with, the Court has the discretion to disqualify you from bidding.

  1. The reserve price can change

Where there is more than 1 bidder, the Court may increase the reserve price, and in some cases where there are a significant number of bidders, the increase can be significant. There are no guidelines on the range of any increase which is entirely at the Court’s discretion. The idea is that this will expedite the entire auction.

  1. There is a Blacklist

If you have successfully registered yourself or your company as a bidder, you or your company may be blacklisted from participating in future auctions for a period of 1 year in the event you do not actually bid during the auction you registered for which resulted in an adjournment of that auction. You may however appeal to the State Court Direction against any decision to blacklist.

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About the author: Th’ng Yan Nie is an associate in the dispute resolution practice group at Donovan & Ho. She has a wide range of experience in litigation matters including contractual and commercial disputes, compulsory land acquisition, debt recovery and strata and property management issues.

 Donovan & Ho is a law firm in Kuala Lumpur, Malaysia. Our practice areas include employment law, dispute resolution (litigation and arbitration), corporate and tax advisory, and real estate/conveyancing. Have a query? Contact us.

 

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