When it comes to Malaysian real estate, two terms often heard are “Bumi Lot” and “Malay Reserve Land.” However, many people mistakenly assume these terms are interchangeable, when in fact, they represent distinct concepts. In this article, we will shed light on the differences between Bumi Lot and Malay Reserve Land and answer the burning question: Can Chinese people buy Bumi Lot houses in Malaysia? We’ll explore the circumstances under which such purchases are possible, ensuring a clearer understanding for interested buyers.
Understanding Bumi Lot and Malay Reserve Land: To grasp the nuances of purchasing indigenous units in Malaysia, it’s essential to differentiate between Bumi Lot and Malay Reserve Land. Let’s delve into their meanings and disparities.
Bumi Lot: So, can Malaysian Chinese individuals purchase Bumi Lot properties, commonly referred to as indigenous units? The answer is affirmative, but there are limitations on acquiring Malay Reserve properties.
Demystifying Bumi Lot House Purchases for Chinese Buyers:
Bumi Lot units encompass both developer units and second-hand units. The purchasing process and considerations differ between these categories.
- Developer Bumi Lot Units: Under Malaysia’s New Economic Policy (NEP), developers must reserve a minimum of 30% of the units as indigenous units when initiating new real estate projects.
If these reserved Bumi Lot units remain unsold within a specified timeframe, developers can request permission from the state government to release them for sale to non-Bumiputera buyers. Consequently, non-Bumiputera individuals can purchase these released indigenous units without encountering any hindrances.
Buyer Advice: If you intend to purchase an indigenous unit awaiting state government approval, it is advisable not to pay the booking fee upfront. Instead, wait until the state government approves the release. This precautionary measure ensures that the transaction does not falter due to the absence of approval, safeguarding your deposit. Should the developer insist on a deposit, ensure that both parties include a refund clause in the booking form, providing you with an added layer of protection.
- Second-Hand Bumi Lot Units: Second-hand Bumi Lot units refer to indigenous units previously sold by developers to indigenous buyers, subsequently becoming sub-sale properties.
To sell these second-hand indigenous units to non-indigenous buyers, sellers must engage a lawyer to submit an application to the state government. The state government evaluates the circumstances and conditions before deciding whether to grant approval.
It is crucial to note that purchasing second-hand indigenous units as a non-Bumiputera buyer entails longer processing times, as state government approval can be a time-consuming process. Moreover, there is a risk of disapproval, which may result in additional legal fees and costs borne by the buyer.
Buyer Advice: Similar to purchasing a developer’s indigenous unit, buyers should ensure that the Offer to Purchase document includes refund conditions. These conditions allow for the return of the deposit or down payment if state government approval is not obtained.
Compared to the procedure for purchasing non-indigenous units, acquiring indigenous units, or Bumi Lot houses, involves a more intricate process. Consequently, it is crucial for buyers to seek assistance from professional real estate agents and lawyers to navigate the necessary procedures and safeguard their rights. By doing so, Chinese buyers can embark on their property purchase journey with clarity and confidence.