Properties Glossary A to Z.

1. TELEGRAM CHANNEL: t.me/planethartanah

2. AGM
• AN ANNUAL GENERAL MEETING HELD
BY THE OWNERS CORPORATION.

3. APARTMENT
AN APARTMENT NORMALLY FEATURES
BASIC FACILITIES LIKE A SWIMMING
POOL AND SECURITY. IT HAS FEWER
FACILITIES THAN A CONDOMINIUM.

4. AUCTION
A PUBLIC SALE OF A PROPERTY OR A REAL
ESTATE THAT IS SOLD TO THE HIGHEST
BIDDER. THESE ARE PROPERTIES THAT ARE
AVAILABLE AT A BELOW-MARKET PRICES
AND SOLD ON’AS-IS’WHERE-IS’ BASIS. NO
GUARANTEE IS GIVEN ON VACANT
POSSESSION AND TITLES.

5. BASE LENDING
RATE (BLR)
• BLR IS A MINIMUM INTEREST RATE BASED ON
A FORMULATED CALCULATION THAT
INCLUDES THE FINANCIAL INSTITUTIONS’ COST
OF FUNDS AND OTHER ADMINISTRATIVE
COSTS. THE CURRENT BLR* IS 6.6%. SO, IF A
BANK ADVESTISES THEIR HOME LOAN INTEREST
RATE AS BLR -2.20%, THEN THE INTEREST
FOR YOUR HOME WILL BE 4.40%.
*AS OF JULY 2019

6. BASE
FINANCING
RATE (BSF)
• THE ISLAMIC BANKING VERSION OF
BLR.

7. BUNGALOWS
• BUNGALOWS IN MALAYSIA COME IN ONE,
TWO AND THREE-STOREY STYLES. THEY ARE
ALSO KNOWN AS DETACHED HOUSES. THESE
DETACHED HOUSES WHICH HAVE OPEN
SPACES ON ALL SIDES. THERE IS ALSO THE
OPTION TO CHOOSE THE DESIGN AND BUILD
YOUR OWN HOUSE IF YOU PURCHASE A
READY BUNGALOW LOT.

8. CAPITAL
APPRECIATION/
GAIN
• CAPITAL APPRECIATION IS AN INCREASE
IN THE VALUE OF A PROPERTY DUE TO
CHANGES IN MARKET CONDITIONS OR
SUPPLY AND DEMAND, ETC, WHILE
CAPITAL GAIN IS THE POSITIVE GAIN MADE
FROM THE SALE OF A CAPITAL ASSET.

9. CAVEAT
• A WARNING ON A TITLE TO A
PURCHASER THAT A THIRD PARTY
MIGHT HAVE SOME INTEREST IN OR
RIGHT TO THE PROPERTY.

10. CERTIFICATE OF
FITNESS (CF)
• CF IS A CONDITION FOR THE
PROPERTY TO BE PHYSICALLY SAFE FOR
HUMAN OCCUPATION.

11. COLLATERAL
• TANGIBLE ASSETS OR SECURITIES THAT
ARE CHARGED TO THE BANK FOR
GRANTING A LOAN AND CAN BE
TAKEN BY THE BANK IN THE EVENT OF A
DEFAULT.

12. COMMERCIAL
• PROPERTIES THAT ARE MAINLY USED
FOR BUSINESS PURPOSES SUCH AS
MALLS, OFFICES, AND SO ON.

13. CONDOMINIUM
• CONDOMINIUMS, ALSO KNOWS AS
CONDOS, HAVE COMMON AREAS SUCH
AS WALKWAYS AS WELL AS RECREATIONAL
FACILITIES SUCH AS A SWIMMING POOL,
GYM, CLUBHOUSE, CCTVS AND SO ON.
THEY ARE JOINTLY OWNED BY UNIT
OWNERS. THE OWNERS AND OCCUPIERS
OF CONDOMINIUMS ARE SUBJECT TO THE
RULES AND REGULATIONS OF THE
CONDOMINIUMS.

14. CONVEYANCING
• THE LEGAL PROCESS OF
TRANSFERRING PROPERTY FROM ONE
PERSON TO ANOTHER.

15. DEED
• A LEGAL DOCUMENT
CONVEYANCING THE TITLE TO A
PROPERTY.

16. DEBT SERVICING
RATIO (DSR)
• A LENDING RISK ASSESSMENT RATIO
THAT FINANCIAL INSTITUTIONS USE AS A
RULE OF THUMB TO DETERMINE
WHETHER A POTENTIAL BORROWER IS
ALREADY IN TOO MUCH DEBT.

17. DEFECT LIABILITY
PERIOD
• DEFECTS LIABILITY PERIOD IS A PERIOD
WHEREBY THE CONTRACTOR MUST
REPAIR ANY DEFECT(S) IDENTIFIED BY
THE SUPERVISOR/OFFICER AFTER A
PARTICULAR WORK HAS BEEN DULY
COMPLETED.

18. DEVELOPER UNIT
• PURCHASE NEW DEVELOPMENTS
DIRECTLY FROM PROPERTY
DEVELOPERS UPON VIEWING THE PLAN
AND/OR SHOW UNITS.

19. DISBURSEMENT
FEES
• VARIOUS TYPES OF FEES SUCH AS THE
REGISTRATION OF CHARGE FEE, LAND
SEARCH FEE, BANKRUPTCY SEARCH FEE
INCURRED BY BANKING INSTITUTIONS AND
SOLICITORS ATTENDING TO THE FINANCING
DOCUMENTATION IN RELATION TO THE
FINANCING WHICH ARE PAYABLE BY THE
CUSTOMER.

20. DISPOSABLE
INCOME
• INCOME/MONEY THAT IS LEFT AFTER
ALL EXPENSES HAVE BEEN DEDUCTED.

21. ENCUMBERANCE
• WHEN A PARTY OTHER THAN THE
REGISTERED LAND OWNER HOLDS A
LEGAL RIGHT, CLAIM OR PRIVILEGE
OVER THE LAND. INSTANCES OF THIS
INCLUDE MORTGAGES AND LEASES.

22. EARLY
SETTLEMENT
• WHEN A BALANCE OF A LOAN IS
SETTLED IN FULL EARLIER THAN THE
DATE ORIGINALLY AGREED UPON IN
THE AGREEMENT.

23. FLAT INTEREST
RATE
• AN INTEREST RATE THAT IS CHARGED
AS A FIXED PERCENTAGE OF THE LOAN
AMOUNT THROUGHOUT THE LOAN
TENURE, IRRESPECTIVE OF THE
PAYMENT PLAN.

24. FIRST RIGHT OF
REFUSAL
• A PROVISION IN AN AGREEMENT THAT
REQUIRES THE OWNER OF A PROPERTY TO
GIVE ANOTHER PARTY THE FIRST
OPPORTUNITY TO PURCHASE OR LEASE THE
PROPERTY BEFORE HE OR SHE OFFERS IT
FOR SALE OR LEASE TO OTHERS.

25. FREEHOLD
• THE TENURE OF FREEHOLD LAND IS FOR
LIFE. YOU OWN THE LAND, THE UNIT, THE
BUILDING AND ANYTHING THAT IS ON THE
LAND. THERE IS NO TIME LIMIT FOR THE
OWNER AND THE FREEHOLD LAND LIES
WITH THE TITLEHOLDER UNTIL THE PROPERTY
IS TRANSFERRED TO SOMEONE ELSE.

26. FLIPPER
• FLIPPERS PURCHASE A PROPERTY FOR
RESALE PROFIT. THESE PROPERTIES ARE
USUALLY THE ONES WITH THE HIGHEST
CAPITAL APPRECIATION/GAIN IN THE
SHORTEST AMOUNT OF TIME. THE
DURATION CAN RANGE BETWEEN A FEW
MONTHS TO A FEW SHORT YEARS.

27. GATED AND
GUARDED
COMMUNITY
• THESE DEVELOPMENTS HAVE
CONTROLLED ACCESS WITH A
GUARDHOUSE AND PERIMETER
FENCING.

28. GUARDED
DEVELOPMENT
• THESE DEVELOPMENTS ARE OFTEN
GUARDED AND DO NOT NECESSARILY
HAVE PERIMETER FENCING.

29. GROSS
DEVELOPMENT
VALUE (GDV)
• THE GDV OF A PROPERTY/SITE IS THE
FIGURE THAT IS BASED ON THE TOTAL
VALUE POSSIBLE FROM THE SALE OF
ALL THE UNITS WITHIN THAT PROPOSED
DEVELOPMENT.

30. GROSS INCOME
• INCOME BEFORE TAXES ARE
DEDUCTED.

31. KEEPER
• KEEPERS USUALLY HOLD ON TO PROPERTIES
FOR AT LEAST A YEAR, OFTEN FOR MANY
YEARS, WITH THE INTENTION OF PROFITING
FROM RENTING THE PROPERTY OUT. THESE
PROPERTIES ARE USUALLY THE ONES THAT
FETCH RENTAL RETURNS HIGHER THAN 6%
AND ARE USUALLY HIGH-RISE
DEVELOPMENTS SUCH AS APARTMENTS AND
CONDOMINIUMS.

32. LEASEHOLD
• LAND WHICH USUALLY BELONGS TO THE
GOVERNMENT AND IS RETURNABLE AFTER THE
EXPIRY OF THE LEASE PERIOD, WHICH IS OFTEN 99
YEARS. WHEN THE LEASE EXPIRES, THE
GOVERNMENT CAN TAKE BACK THE LAND OR
LEASE IT FURTHER. AT THE END OF THE LEASE, IT IS
FAIRLY EASY TO RENEW THE LEASE FOR A FURTHER
99 YEARS UPON PAYMENT OF A PREMIUM BASED
ON THE CURRENT MARKET VALUE OF THE
PROPERTY. IT IS ALSO POSSIBLE TO ARRANGE FOR
A NEW LEASE DURING THE PERIOD OF THE
EXISTING LEASE.

33. LETTER OF OFFER
(LO)
• A CONTRACT BETWEEN THE
BORROWER(S) AND THE BANK STATING
THE TERMS OF HOUSING LOAN
PACKAGE.

34. LOAN TENURE
• THE PERIOD OF TIME THAT A PERSON
WILL TAKE TO FULLY REPAY THEIR
LOAN.

35. LOCK-IN PERIOD
• THE NUMBER OF YEARS THAT A PERSON IS TIED TO
THEIR LENDER AKA FINANCIAL INSTITUTION. IF THE
LOAN IS FULLY REDEEMED WITHIN THIS PERIOD,
THERE WILL BE A FULL REDEMPTION PENALTY THAT
IS EQUAL TO A PERCENTAGE OF THE LOAN
QUANTUM. LENDERS MAY ALSO CHARGE A
PENALTY FOR MAKING PARTIAL PAYMENTS WITHIN
THIS PERIOD.

36. MALAY
RESERVED LAND
• LAND THAT IS EXCLUSIVELY FOR
MALAYS OR BUMIPUTERAS. IT CANNOT
BE SOLD TO OTHER RACES INCLUDING
FOREIGNERS.

37. MARGIN OF
FINANCING
(MOF)• THE AMOUNT OF FINANCING PROVIDED BY A
FINANCIAL INSTITUTION DEPENDS ON THE MARKET
VALUE (FOR COMPLETED PROPERTIES ONLY) OR
PURCHASE PRICE OF THE HOUSE, WHICHEVER IS
LOWER. FOR EXAMPLE, IF A PROPERTY IS PRICED
AT RM700,000 AND THE MARGIN OF
FINANCING IS 90%, THE AMOUNT THAT MUST BE
PAID IS RM70,000.

38. MORTGAGE
REDUCING TERM
ASSURANCE (MRTA)
• A TERM INSURANCE WHICH REDUCES OVER
THE TENURE OF THE LOAN. THIS FORM OF
INSURANCE IS USED TO PROVIDE COVER FOR
THE OUTSTANDING LOAN AMOUNT, IN THE
EVENT OF THE DEATH OR TOTAL PERMANENT
DISABILITY OF THE INSURED. THE MRTA IS
NORMALLY CALCULATED TO MEET THE
OUTSTANDING LOAN AMOUNT.

39. MY FIRST HOME
SCHEME
• MY FIRST HOME SCHEME WAS ANNOUNCED
IN BUDGET 2011 BY THE GOVERNMENT TO
ASSIST YOUNG ADULTS WHO HAVE JUST
JOINED THE WORKFORCE IN PURCHASING
THEIR FIRST RESIDENTIAL PROPERTY. THE
SCHEME ALLOWS YOUNG ADULTS TO OBTAIN
UP TO 100% FINANCING FROM FINANCIAL
INSTITUTIONS.

40. MALAYSIA MY
SECOND HOME
(MM2H)
• MM2H IS A PROGRAMME OFFERED BY THE
GOVERNMENT WHICH ALLOWS FOREIGNERS
WHO FULFIL CERTAIN CRITERIA TO STAY IN
MALAYSIA FOR AS LONG AS POSSIBLE ON A
MULTIPLE-ENTRY SOCIAL VISIT PASS. THE
SOCIAL VISIT PASS IS INITIALLY FOR A PERIOD
OF 10 YEARS AND IS RENEWABLE.

41. NET WORTH
• THE VALUE OF A PERSON’S ASSETS
MINUS LIABILITIES.

42. OFF THE PLAN
• BUYERS PURCHASE A PROPERTY
BEFORE IT IS COMPLETED AFTER
HAVING ONLY SEEN THE PLANS.

43. OVERDRAFT
FACILITY
• A FACILITY WITH A CREDIT LINE GRANTED BASED
ON A PREDETERMINED LIMIT. THERE ARE NO FIXED
MONTHLY INSTALMENTS AS THE INTEREST IS
CALCULATED BASED ON THE DAILY OUTSTANDING
BALANCE. THIS PROVIDES BORROWERS WITH THE
FLEXIBILITY OF REPAYING THE LOAN ANYTIME AND
THE FREEDOM TO RE-USE THE MONEY. THE
INTEREST CHARGED IS GENERALLY HIGHER THAN
THE TERM LOAN.

44. PR1MA (PERUMAHAN
RAKYAT 1MALAYSIA)
• PR1MA WAS ESTABLISHED TO PLAN, DEVELOP,
CONSTRUCT AND MAINTAIN AFFORDABLE
LIFESTYLE HOUSING FOR MIDDLE-INCOME
HOUSEHOLDS (AVERAGE MONTHLY HOUSEHOLD
INCOME OF BETWEEN RM2,500 TO RM7,500) IN
KEY URBAN CENTRES. THE GOVERNMENT PLANS
TO BUILD AFFORDABLE HOMES IN CITIES AND
TOWNS IN MALAYSIA.

45. REAL ESTATE
AGENT FEES
• FEES THAT ARE DUE TO REAL ESTATE
AGENTS FOR SERVICES RENDERED AND
TO BE AGREED BETWEEN THE ESTATE
AGENT AND THE CLIENT. THE FEES DUE
ARE A MAXIMUM FEE OF 3% FOR ALL
SALE AND PURCHASE OF PROPERTIES.

46. REAL PROPERTY
GAIN TAX
(RPGT)
• REAL PROPERTY GAIN TAX/RPGT
(BUDGET 2019) IS CHARGED ON GAINS
ARISING FROM THE DISPOSAL/SALE OF REAL
PROPERTIES OR SHARES IN REAL PROPERTY
COMPANIES.

47. REFINANCE
• THE PROCESS OF PAYING OFF A
PORTION OR THE ENTIRE AMOUNT OF
THE EXISTING LOAN WITH THE
INTENTION OF OBTAINING ANOTHER
LOAN FROM THE SAME OR ANOTHER
BANKING INSTITUTION.

48. SHOPHOUSES
• SHOPHOUSES ARE A ROW OF
TERRACED HOUSES BUT WITH ONE
MAJOR DIFFERENCE: THE GROUND
FLOOR IS USUALLY WHERE A
SHOP/BUSINESS IS OPERATED.

49. SALES &
PURCHASE
AGREEMENT (SPA)
• A LEGAL CONTRACT THAT OBLIGATES
A BUYER TO BUY AND A SELLER TO SELL
A PRODUCT OR SERVICE.

50. SOHO/SOFO/
SOVO
• SOHO IS A SMALL OFFICE HOME
OFFICE, SOFO IS A SMALL OFFICE
FLEXIBLE OFFICE AND SOVO IS A
SMALL OFFICE VIRTUAL OFFICE. EACH
IS RELATIVELY SIMILAR BUT DIFFERS IN
TERMS OF FUNCTIONALITY.

51. STAMP DUTY• IN A BUSINESS OR ASSET SALE, STAMP DUTY IS CHARGED
ON ALL INSTRUMENTS CONVEYING THE ASSETS, MEANING
MOVABLE OR IMMOVABLE PROPERTY. IT IS PAYABLE BY
PURCHASERS/TRANSFEREES AT THESE RATES:
• STAMP DUTY (BUDGET 2019):
• 1% ON THE FIRST RM100,000 OF THE VALUE OF
TRANSFER;
• 2% ON THE VALUE OF TRANSFER OF THE NEXT
RM100,001 TO RM500,000;
• 3% ON THE VALUE OF TRANSFER OF THE NEXT
RM500,001 TO RM1,000,000;
• 4% ON THE VALUE OF TRANSFER OF MORE THAN
RM1,000,000.

52. SEMI-DETACHED
HOUSES
• ALSO KNOWN AS SEMI-DS, THESE ARE TWO
HOUSES WHICH ARE BUILD SIDE BY SIDE AND
CONNECTED ON ONE SIDE OF EACH HOUSE.
SEMI-D HOUSES HAVE OPEN SPACES AT ITS
FRONT, REAR AND ANY ONE SIDE. THESE
HOUSES OFTEN HAVE GENEROUS GARDENS
AND BACKYARDS.

53. STRATA TITLE
• A TITLE TO A UNIT OR LOT ON A PLAN
SUBDIVISION ASSOCIATED WITH TOWNHOUSES AS
WELL AS UNITS AND BLOCKS OF
APARTMENTS/CONDOS WHICH ARE BASED ON
THE HORIZONTAL AND VERTICAL SUBDIVISION OF
AIR SPACE. OWNERS HAVE A CERTIFICATE OF THE
TITLE, ARE ABSOLUTE OWNERS OF A FREEHOLD
UNIT AND HAVE AN UNDIVIDED SHARE OF A
COMMON PROPERTY.

54. SUB-SALE
• EXISTING PROPERTIES THAT ARE
AVAILABLE AND ARE USUALLY
OCCUPIED BY OWNERS OR RENTERS,
OR VACANT.

55. TENANCY
AGREEMENT• A STANDARD TENANCY AGREEMENT STIPULATES
THAT THE TENANT IS OBLIGED TO PAY TWO
MONTHS’ RENTAL ADVANCE AS A SECURITY
DEPOSIT, ONE MONTH’S RENTAL AS ADVANCE
RENTAL AND A REFUNDABLE UTILITY DEPOSIT THAT
IS NORMALLY FIXED AT ONE MONTH’S RENTAL
(SUBJECT TO BOTH PARTIES AGREEMENT). IT IS
IMPORTANT TO REMEMBER THAT THE TENANCY
AGREEMENT IS FOR THE BENEFIT OF BOTH PARTIES
CONCERNED AND SHOULD BE IRREFUTABLE.

56. TERM LOAN
• A FACILITY WITH REGULAR
PREDETERMINED MONTHLY INSTALMENTS
THAT DO NOT CHANGE DURING THE
ENTIRE TERM OF THE LOAN. EACH
INSTALMENT PAYMENT CONSISTS OF THE
LOAN AMOUNT PLUS THE INTEREST.

57. TERRACED
HOUSES
• TERRACED HOUSES ARE ALL CONNECTED TO EACH OTHER
IN A ROW AND USUALLY HAVE OPEN SPACES AT THE
FRONT AND BACK. THE CORNER LOTS ARE QUITE SIMILAR
TO SEMI-DETACHED HOUSES AS ONE SIDE WILL HAVE
MORE OPEN SPACE COMPARED TO THE REST. EACH ROW
MAY CONSIST OF 10 TO 12 UNITS DEPENDING ON THE SIZE
OF EACH HOUSE, AS IT MUST COMPLY WITH THE
REGULATIONS OF THE FIRE SERVICE DEPARTMENT WHICH
STATE THAT EACH ROW SHALL NOT EXCEED 130 FEET IN
LENGTH.

58. TITLE SEARCH
• A CHECK OF THE TITLE RECORDS TO
ENSURE THAT THE SELLER IS THE LEGAL
OWNER OF THE PROPERTY AND THAT
THERE ARE NO OTHER CLAIMS OR
LIENS OUTSTANDING.

59. TOWNHOUSES
• GENERALLY, TOWNHOUSES ARE NOT AS POPULAR
AS OTHER TYPES OF HOUSES IN MALAYSIA. THEY
ARE TWO PROPERTIES BUILD ON THE SAME PIECE
OF LAND WITH THE LOWER UNIT USUALLY
OCCUPYING THE GROUND AND PART OF THE
FIRST FLOOR, WHILE THE TOP UNIT OCCUPIES THE
REMAINDER OF THE FIRST FLOOR AND THE
SECOND FLOOR. MOST OF THE TIME, THE OWNER
OF THE LOWER UNIT IS DIFFERENT FROM THE
OWNER OF THE TOP UNIT.

60. VACANT
POSSESSION
• OWNERSHIP OF UNOCCUPIED
PROPERTY, WHERE THE PREVIOUS
OWNER OR TENANT HAS VACATED THE
PROPERTY.

61. VALUATION
• A WRITTEN ANALYSIS OF THE
ESTIMATED VALUE OF A PROPERTY
PREPARED BY A QUALIFIED VALUER OR
APPRAISER.

62. VENDOR
• THE SELLER OF A PROPERTY.

63. YIELD
• THE INTEREST EARNED BY AN INVESTOR ON
AN INVESTMENT, STATED AS PERCENTAGE
OF THE AMOUNT INVESTED. THE RENTAL
YIELD THAT MOST INVESTORS WOULD
ACCEPT IS A MINIMUM OF 6% FOR THE
RESIDENTIAL PROPERTIES. THE BASIC
FORMULA FOR CALCULATING RENTAL YIELD
IS: ANNUAL RENTAL INCOME DIVIDED BY
PROPERTY PRICE.

64. ZERO ENTRY/MOVING
COST LOAN
PACKAGE
• A LOAN PACKAGE WHERE BORROWERS
DO NOT HAVE TO PAY FOR ALL OR
CERTAIN CHARGES AND FEES INVOLVED
IN OBTAINING/REFINANCING A LOAN AS
LEGAL FEES, STAMP DUTY AND
DISBURSEMENT CHARGES.