What is a Deed of Assignment (DOA) in Malaysia Property?

When you buy property in Malaysia, one of the terms you might hear from your lawyer or property agent is the Deed of Assignment (DOA).

This term is especially common if you are buying a condominium, serviced apartment, or commercial unit that does not yet have its individual or strata title. For many buyers, this can be confusing because the property still exists, but the official title is not ready.

So, what is a deed of assignment in Malaysia, and why is it so commonly used? This article will guide you through the concept, process, costs, and risks with examples and FAQs to help you fully understand.

Deed of Assignment Meaning in Malaysia

The Deed of Assignment is a legal document that transfers ownership rights of a property from the seller (called the assignor) to the buyer (called the assignee).

It becomes necessary in situations where the property title has not been issued yet. This is common in Malaysia because the process of getting strata or individual titles from the Land Office often takes many years after the project is completed.

Instead of waiting, the DOA acts as a temporary proof of ownership. It allows the buyer to legally enforce their rights, even though their name is not yet on the official title.

Basically Deed of Assignment (DOA) is commonly used when:

• The property does not yet have an individual or strata title.
• The property is still under a Master Title controlled by the developer.
• The buyer is purchasing the property through a subsale transaction instead of directly from the developer.

Note: Without a DOA, the buyer would not have legal evidence of ownership until the title is officially issued. The DOA acts as temporary ownership proof.

Why Does Malaysia Use the Deed of Assignment?

The DOA exists mainly because of the way Malaysia’s property development system works.

Most large developments are built under a Master Title, which belongs to the developer. The individual or strata titles will only be subdivided and issued later. This process can take anywhere from 2 to 10 years, sometimes even longer.

If buyers had to wait until the titles were ready, property transactions would almost come to a halt. That is why the DOA is commonly used to make ownership transfers possible even without the official title.

So, to allow transactions to continue, the Deed of Assignment was introduced as a legal instrument to safeguard buyers.

This situation of Deed of Assignment is common in:

• High-rise developments (condominiums, serviced apartments, SOHO, etc.)
• Commercial properties (shoplots, office towers, retail units)
• New housing developments under a Master Title

Why is the Deed of Assignment Important?

The Deed of Assignment in Malaysia property transactions plays several roles:

Proof of Beneficial Ownership

• For a buyer, the DOA is extremely important because it provides legal recognition of ownership.
• Without the DOA, the buyer has no enforceable proof that they own the property, since their name is not yet in the land records. This could create problems if disputes arise.

Required for Bank Loans

• The DOA also plays another important role. Banks will not release housing loans without it.
• When a buyer applies for financing, the bank requires the DOA, along with the developer’s consent, before approving and disbursing the loan.

Bridge Until MOT

• The DOA ensures that when the strata or individual title is eventually issued, the buyer can proceed smoothly with the Memorandum of Transfer (MOT) to officially register the property under their name.

Deed of Assignment Example Situation

Here’s a deed of assignment example for better understanding:

• Ali buys a condominium from a previous owner. The strata title has not been issued yet.
• Since the title is unavailable, Ali cannot register his name at the Land Office.
• Instead, the seller and Ali execute a Deed of Assignment, transferring all rights of the property to Ali.
• The developer acknowledges this transfer through a Letter of Consent.
• Ali’s bank also secures its loan through a Deed of Assignment by Way of Security.

This way, Ali is legally protected until the title is ready.

Deed of Assignment Process in Malaysia

The DOA process usually involves the following steps:

1. Sign the Sale and Purchase Agreement (SPA) between buyer and seller.
2. Prepare and execute the DOA, drafted by the buyer’s lawyer.
3. Obtain the developer’s consent and pay any administrative fees.
4. Stamp the DOA at the Inland Revenue Board (LHDN) to make it enforceable.
5. If a loan is taken, the bank executes a Deed of Assignment by Way of Security.

Deed of Assignment Sample

A typical deed of assignment sample usually contains:

• Full names and details of the assignor (seller) and assignee (buyer)
• A clear description of the property (unit number, size, project name)
• The agreed purchase price and how it is to be paid
• Transfer of all rights and interests from seller to buyer
• Buyer’s acceptance of obligations under the original SPA
• Developer’s acknowledgement of the transfer

While templates exist, every DOA should be tailored to the specific property and transaction by a qualified lawyer.

Costs Involved in Deed of Assignment

Buying property under a DOA involves several costs:

• Stamp Duty – Calculated on the purchase price, similar to MOT.
• Legal Fees – Typically follow the standard scale for property transactions.
• Developer’s Consent Fees – Developers often charge an administrative fee for issuing consent to the assignment.
• Future MOT Fees – When the strata or individual title is issued later, you will still need to pay MOT stamp duty again.

Important: Buying under DOA could involve two rounds of costs: once for DOA and later for MOT.

Deed of Assignment vs Memorandum of Transfer (MOT)

It is very common for buyers to confuse the DOA with the MOT. But the two serve different purposes.

The DOA is used only when there is no individual or strata title yet. It transfers beneficial ownership between the seller and buyer.

The MOT, on the other hand, is used once the title has been issued. It is registered at the Land Office and officially transfers the title into the buyer’s name.

To put it simply:

• DOA = temporary proof of ownership
• MOT = final legal registration of ownership

Many buyers confuse DOA with MOT, but they are different.

Aspect	Deed of Assignment (DOA)	Memorandum of Transfer (MOT)
When used	When no individual/strata title exists	When title has been issued
Who prepares	Lawyer (between buyer & seller)	Lawyer (lodged at Land Office)
Purpose	Temporary proof of ownership	Permanent registration of ownership
Stamp Duty	Payable on DOA	Payable again on MOT

In short: DOA is temporary; MOT is final.

Risks and Limitations of Deed of Assignment

While the DOA is very useful, buyers should also be aware of its limitations.

• Double Costs – Buyers may pay twice for legal fees and stamp duty (DOA now, MOT later).
• Dependence on Developer – Developer’s consent is necessary; disputes with the developer can complicate matters.
• Long Wait for Title – Some projects take over 10 years to issue strata titles, delaying the MOT process.
• Transfer Complications – If the seller has unresolved debts with the developer, the assignment might face delays.

Frequently Asked Questions (FAQ)

1. What is Deed of Assignment in simple terms?

It is a legal document transferring ownership rights from seller to buyer when no property title has been issued yet.

2. Is the Deed of Assignment legally binding in Malaysia?

Yes, once it is properly stamped at LHDN and consented to by the developer, it is legally enforceable.

3. Do I still need an MOT if I already have a DOA?

Yes. When the individual or strata title is finally issued, ownership must be transferred to your name via MOT.

4. What happens if the developer refuses consent?

The transaction may be delayed or cancelled. Always check with the developer before proceeding.

5. Can I get a housing loan with only a DOA?

Yes, but the bank will also require a Deed of Assignment by Way of Security to protect their interest.

6. How long is a Deed of Assignment valid?

It remains valid until the individual/strata title is issued and the property is transferred via MOT.

 

The Deed of Assignment (DOA) in Malaysia property transactions is an important legal safeguard for buyers of properties without titles. It provides temporary proof of ownership, helps secure housing loans, and protects the buyer’s rights until the Memorandum of Transfer (MOT) can be registered.

While it comes with added costs and some risks, understanding the deed of assignment meaning, reviewing a deed of assignment sample, and learning from a deed of assignment example will give you the knowledge needed to navigate property purchases confidently.

Always consult a qualified property lawyer when dealing with DOA transactions to ensure that your rights as a buyer are fully protected.

Other Article:

• What is MOT Property and Why the Memorandum of Transfer is Essential
• What Is the Proclamation of Sale (POS) and Why It Matters in Malaysia
• Why You Need to Pay Progressive Payment & Interest Before Receiving the Keys in Malaysia?