Buying or Selling a Leasehold Property? Here’s Why You Need State Consent First!

When you buy, sell or transfer a property in Malaysia, many of the steps may seem straightforward such as sign the Sale & Purchase Agreement (SPA), pay the stamp duty, submit the Memorandum of Transfer, and register at the Land Office.

But if the property you’re dealing with is leasehold, there’s one extra (and very important) step: getting consent from the State Authority before ownership can legally change hands. This step, known as leasehold consent or State Authority consent, often confuses buyers and sellers especially first-timers. 

This article explains why such consent often termed leasehold consent or State Authority consent is needed, when it applies, what the process involves, and how to avoid the pitfalls. If you’re dealing with a leasehold property in Malaysia, understanding this is essential.

What Is a Leasehold Property?

In Malaysia, land tenure is generally divided into two main types, freehold (ownership in perpetuity) and leasehold (ownership for a limited term). When the government “leases” a piece of land to an individual or company, it’s typically for a fixed term like 60 years, 99 years, or sometimes shorter.

Once that period ends, the land ownership automatically reverts back to the State unless the owner applies to renew the lease (which often involves paying a premium).

Because the land technically belongs to the State, the owner doesn’t have full control over it and that’s where state consent comes in. A leasehold title involves the State Authority’s vested interest (the land remains under its ultimate control), dealing with a leasehold property often comes with additional regulatory checks. One key check is that the transfer of a leasehold property may require consent from the relevant State Authority (or Menteri Besar / State Executive Council, depending on the state).

Why Is State Authority Consent Required?

Almost every leasehold title in Malaysia has a clause called a “restriction in interest” (or in Malay, “Sekatan Kepentingan”).

If you’ve ever seen a property title, you might notice something like this:

“Tanah ini tidak boleh dipindah milik, digadai atau dipajakkan tanpa kebenaran Pihak Berkuasa Negeri.”

Translated: “This land cannot be transferred, charged, or leased without the consent of the State Authority.”

This condition is made possible under Section 120 of the National Land Code 1965, which gives each state the power to restrict dealings on land under their control.

That means if you’re selling, transferring, or even refinancing your leasehold property, the transaction isn’t valid until the State Authority gives written approval. Without it, the Land Office won’t register your transfer, and the buyer legally cannot become the new owner even if full payment has been made.

When Is Leasehold Consent Needed?

You’ll need to obtain State consent if:

1. Your property is leasehold (regardless of residential, commercial, or industrial use).
2. The title has a restriction in interest clause.
3. The buyer is a foreigner, or the property is subject to foreign ownership rules.
4. The property is a Bumiputera lot, or has conditions like “low-cost” status.
5. You’re transferring ownership within family members (though certain exemptions may apply).
6. You’re trying to charge the property to a bank for a loan or refinancing.

Even some freehold properties carry similar restrictions, so always check before assuming consent isn’t needed.

The Leasehold Consent Application Process

1. Application Submission

Usually handled by your lawyer, the application is made to the Land Office (Pejabat Tanah dan Galian, PTG) where the property is located.
It includes:

A completed Form 14A (Memorandum of Transfer)
Copy of the Sale & Purchase Agreement (SPA)
Identity cards of both parties
Latest Quit Rent (Cukai Tanah) and Assessment (Cukai Pintu) receipts
A copy of the title deed
Any supporting documents required by the Land Office

2. Land Office Review

The PTG reviews the documents to confirm that:

The land isn’t in arrears on quit rent or assessment.
There are no caveats or encumbrances.
The sale complies with all title conditions (e.g., not a Bumiputera lot sold to a non-Bumiputera buyer).

3. Approval by State Authority

Once verified, the file is submitted to the State Authority (often through the State Executive Council, or EXCO) for approval. This stage can take several weeks.

4. Issuance of Consent Letter

If approved, the PTG issues a Consent Letter (Surat Kebenaran Pindah Milik), usually valid for a limited time (e.g., 3–6 months).
This letter allows the transaction to proceed with registration at the Land Office.

5. Registration and Final Transfer

Once the consent is in hand, your lawyer can register the Form 14A to officially transfer ownership.

Estimated Timeline:

Typically 6–12 weeks, but it can take longer if:

• Additional documents or premiums are required,
• The buyer is a foreigner,
• Or the land has unresolved title conditions.

Leasehold Consent in Selangor (The Strictest State)

Selangor is often cited as the state with the most stringent and well-structured leasehold consent rules in Malaysia.

• Applications are made to Pejabat Tanah dan Galian Selangor (PTG Selangor) under Section 214A of the National Land Code.
• Consent is required for every transfer, charge, or lease involving leasehold titles.
• The State Authority thoroughly checks title compliance, unpaid quit rent, assessment arrears, or illegal renovations can delay approval.
• Applications can now be submitted through the Selangor e-Tanah system, allowing online tracking and faster processing.

Processing time:
Usually 6–8 weeks, but can extend to 3 months if the property is subject to additional scrutiny.

Bumiputera restrictions:
Selangor is strict about Bumiputera quota. If a leasehold property is marked as a Bumiputera lot, it cannot be sold to a non-Bumiputera buyer, even with consent.

Leasehold Consent in Johor

In Johor, the process is managed by the Pejabat Tanah dan Galian Johor (PTG Johor).

While similar to Selangor’s system, Johor’s application may involve:

• Submission via lawyer at the district Land Office.
• Review by the State EXCO before approval.
• Additional documents for properties within Iskandar Puteri or Medini (special development zones).
• Premium payments in certain cases.

Processing time:
Typically 1–3 months, depending on the district’s workload and the complexity of the title.

Johor also has clear timelines for consent validity usually 6 months meaning the transfer must be registered before the approval expires.

Fees and Costs Involved for Leasehold Consent

Getting leasehold consent usually involves:

• Application fee (around RM50–RM300 depending on the state)
• Processing fee
• Stamp duty for the transfer
• Legal fees for your lawyer
• Premium payment, if imposed by the State Authority (especially for lease renewals or conversions)

Always check with your conveyancing lawyer upfront, as costs can differ widely depending on location and property type.

Common Reasons for Delay or Rejection of Leasehold Consent

Here’s why some applications take longer or get rejected altogether:

• Incomplete documents or missing signatures.
• Outstanding arrears on quit rent or assessment.
• Property is a Bumiputera lot being sold to a non-Bumiputera.
• The buyer doesn’t meet state eligibility criteria.
• Foreign ownership restrictions apply.
• The property has caveats lodged against it.

Being proactive settling dues, ensuring compliance, and submitting all documents correctly — can save you months of waiting.

What Happens If You Skip Getting Consent?

If you fail to obtain state approval:

• The Land Office will reject your transfer application.
• Your Sale & Purchase Agreement (SPA) may become void.
• The bank may refuse to release loan funds.
• The buyer could withdraw or claim compensation for delays.
• You risk losing the earnest deposit or facing legal action.

In short: even if you’ve paid everything, the deal isn’t legally valid until consent is granted and registered.

How to Check If a Property Requires Consent

Before signing anything, always:

• Do a land search (carian rasmi) at the local Land Office or e-Tanah portal.
• Look for the section labelled “Sekatan Kepentingan”.
• If it says approval is needed, plan for extra time.
• Ensure your SPA includes a “subject to state consent” clause to protect both parties.

Leasehold Consent vs. Freehold Transfer

Aspect	Leasehold	Freehold
Ownership period	60 or 99 years	Perpetual
Need state consent	Yes	Usually no
Renewal needed	Yes, after expiry	No
Transfer process	Longer, with State review	Faster
Value retention	Declines as lease shortens	More stable

This is why freehold properties are often seen as more desirable but many prime areas in Malaysia (like parts of Petaling Jaya, Subang, and Johor Bahru) are leasehold, so understanding consent rules is crucial.

Frequently Asked Questions (FAQ) of Leasehold Consent

1. Can I sell my leasehold property before getting consent?
Yes, you can sign an SPA, but the transfer won’t be registered until state consent is obtained. Always include a “subject to consent” clause.

2. How long does it take to get consent in Selangor or Johor?
Usually between 6 weeks and 3 months, depending on state processing speed and completeness of your documents.

3. Do I need consent to refinance my leasehold home?
Yes. Most banks require state consent before they can create a charge over the property.

4. Can foreigners buy leasehold properties?
Yes, but subject to state approval and minimum price thresholds (e.g., RM1 million in Selangor).

5. What if my leasehold term is expiring soon?
You’ll need to apply for lease renewal another process that involves state approval and payment of a land premium.

 

Leasehold consent might sound like red tape, but it’s an essential part of Malaysia’s property system. It ensures that all dealings with state-owned land are properly monitored, fair, and legally valid.

If you’re buying or selling a leasehold property especially in Selangor or Johor make sure you:

• Check the restriction in interest early,
• Engage a qualified lawyer,
• Plan enough time for approval, and
• Keep your documents clean and updated.

It may take a little longer, but getting proper state consent means your transaction is secure, legal, and fully protected under Malaysian law.

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• Why Your Housing Loan Gets Rejected in Malaysia (Even If You Can Afford It)
• How Much Salary Do You Need to Afford a RM500K House in Malaysia?