PETALING JAYA: The government’s decision to fix fees imposed by liquidators appointed by the Insolvency Department at RM500 has been lauded by Bar Council Conveyancing Practice Committee chair Datuk Roger Tan.
He said the amount payable by clients was previously unregulated.
However, he added that liquidators not appointed by the department are still allowed to charge fees above RM500, and that must also be regulated.
Tan was commenting on Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed’s call for the Insolvency Department to rein in private liquidators, especially those appointed by it, and peg their fees at RM500 for work related to managing the affairs of a defunct property developer, such as applying, distributing, transferring and signing off on individual and strata titles to their rightful purchasers.
“We have received information that some liquidators are charging up to 2% of the purchase price or previous purchase price, whichever is higher, or 2% of the value of the property or more than RM4,000 for just an acknowledgement on the deed of receipt and reassignment (DRR) or for serving DRR on them.
“This is highly excessive and completely unreasonable. It also defeats the purpose of protecting the interests of house buyers under the Housing Development (Control and Licensing) Act, which is a piece of social legislation”, Tan told theSun.
He said the Malaysian Bar has always taken the stand that if liquidators want to take over the role of a housing developer, they must then be regulated under the Act.
“Otherwise, their sole business is just to liquidate the assets of insolvent housing developers.”
National House Buyers Association secretary-general Datuk Chang Kim Loong said appointed agents are allowed to file additional charges and expenses for costs incurred in situations where master titles have been lost, police reports have to be lodged, statutory declarations for replacement of title/s and application for new issuance and whatever related thereto have to be made.
He added that such additional charges must be reasonable and transparent, in line with the Insolvency Department’s current fees and expenses of RM500 being “Liquidator’s Wages”.
“It was an excellent decision by the Special Task Force to Facilitate Business. The Insolvency Department has received numerous complaints against errant private liquidators as well as receivers and managers who were appointed to manage the affairs of defunct property developers.
“The complaints were especially regarding applying, distributing, transferring and ‘signing off’ on individual and strata titles to their rightful purchasers for their ownership papers.
“The clients had claimed that they were charged an ‘administration or vetting fee’ of between 1% and 3% of the original purchase price or the sale price in a sub-sale for performing these functions, which were originally carried out by the developer.
“In some cases, there were also additional charges tagged as ‘vetting fees’ for the liquidator’s appointed solicitors to vet the forms and documents. The liquidators will make the purchasers or owners pay for lawyers’ professional fees too.”
Chang expressed hope that all liquidators and agents would comply with the Insolvency Department’s decisions.
