Lease to Own Homes in Malaysia – How the Process Works

You might have found your dream home, but your credit isn’t quite high enough to qualify for a loan or you have no savings for a down payment for your dream home. Don’t worry – a lease with an option to buy might be perfect for you. With this arrangement, you pay rent and have the option to buy the property after a few years. Some of the rent you pay will go to your down payment, and as a bonus you’ll have time to clean up your credit before seeking a mortgage before you finally purchase your first home!

The first step that you need to do is looking for a lease to own home. Nowadays, it’s not require a hard work to find out a lease option home because there are a lot of developers and even the federal government offering new properties that can be acquire through lease option scheme. Besides that, financial institution such as Maybank also offering their own lease option scheme through a programme called HouzKEY.

Besides that, you can also look for a lease to own homes through online property platforms like From there, you can find a vast option of properties that can be own through the lease option scheme.

After you found your ideal lease to own home, you need to do your own research on the owner and the property itself. One of the most important thing is that you need to identify the person that you deal with are the correct owner of the property. One thing you can do is to request your solicitor to do a land title search on the owner at the land office. The name of the owner should be stated in the land title and you will be able to verify the identity of the owner.

If you’re still sceptical about the home owner, you can request your solicitor to do a background check on the owner by submitting an official enquiry to National Registration Department to avoid any fake identity to be used by the person that you deal with. Besides that, you can also obtain a CCRIS or CTOS reports on the owner with his or her consent to check the financial status.

Other than the owner, the property itself also need to go through thorough checking to avoid any encumbrances or default payment by the current owner to be charge on you as a new owner. You can also request your solicitor to make a land search at the land office on the property if there are any existing charges or encumbrances such as loan, lien or registrar caveat on the property itself. You also need to check the property by visiting it by yourself to verify the existence and it’s in a good condition or not.

After you satisfied with the owner and his or her property, you need to negotiate the terms and condition of the lease option agreement between the owner. Usually, the lease agreement will last until 3 to 5 years with an option for you to buy the property at the end of the lease period. Basically, you can set the price in the agreement with the consent of the owner. Thus, you can lock the property’s price within the lease period and you can acquire the property with the agreed amount.

Once the agreement has been agreed by the both parties, it can be legally enforced as a valid contract. A specific performance can be enforced on the owner if he or she refused to transfer the property at the end of the lease period. However, if the buyer decided not to proceed with the purchase of the property, there will be no breach of contract as there are no legal obligations binding him or her to buy the property at the end of the lease period.

However, the home buyer cannot enter a private caveat to protect his or her interest on the property within the lease period as an option is not a registrable interest according to our own National Land Code. The potential buyer can protect his or her interest if there is any dispute arise within the lease period through the lease option agreement signed with the owner earlier as it was a valid contract under the Contract Act 1965.

When the lease period has lapsed, you’re entitle to buy the property and eventually you will become the legitimate owner. You may request your solicitor to do all the documentations for transferring the ownership under your name.


Read More >> The buying process of lease option

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