Ask Andrew: Legalities Of Home Inspections?

Question from Jeremy Poarch ( -

What are the legalities of home inspections?

Andrew’s answer:

No doubt, home inspections are an important and necessary part of the home buying process. This is provided for in the context of the pre-sale due diligence as covered in the 1987 Real Estate Provisions clause (which was also applicable to the Tax Reform Act of 1986). Additionally, take note of the case of lay assessors and their impact on the inspection process.

No home buying process is ever complete without any form of inspection and it is in fact part and parcel of most, if not all, buyer contingencies. Depending on the consequences of the home sale or whatever has been agreed on between home seller and buyer, different types of inspection can and should be done to a house.

There is hardly a single inspection that does it all. One home inspector who finds a fault, say in the air conditioning system of the house, will only do so much as refer the home buyer to an expert in this field. And with so many components to the house that needs inspecting, the information can be overwhelming especially to any first time buyer.

I am not a realtor, but from my online research (particularly at which I recommend highly), here’s a list of home inspections that you can do for your house:

  • Soil stability. As its name suggests, soil stability inspection are dedicated to finding out the stability and credibility of the land that your new house stands on.  This is especially important if you live close to a river where soil tends to get soft during the rainy season, and if you live on a hill where erosion and landslides can occur. They can also inspect for contamination in the soil.
  • Electric. The electrical structure of your Malaysian house is not only necessary, it can also be dangerous. That is why you have to have its credibility inspected before moving in. The last thing you want is to live in a house that’s in essence a living time bomb where a fire can occur just about anytime due to faulty electrical setup. You can’t risk your family’s life for that.
  • Chemical inspection. The house can be laden with unseen chemicals in the air that are either fire hazards or are toxic. These chemicals come mostly from the materials on the house as well as on the different equipment. Be on guard and get inspected for traces of radon, asbestos formaldehyde, and methane and get it eliminated before moving in.
  • Mold. The presence of mold in the house can trigger allergies or cause worse health problems that why you should have your air and exhaust systems completely inspected for the smallest traces of these microscopic beings.
  • Water and Plumbing Systems. As simple as it may seem, the water and plumbing system existing in the house can be very complex and the slightest problem unnoticed can cause you bigger problems. It can range from extra costs on your water bill to something as bad as water contamination so always look for a complete inspection in this area.
  • Sewer and septic tank system. Waste management is a crucial part of any house so yours should have a proper and well-maintained system that would not compromise your family’s health in the long run.
  • Foundation and roofing. The general stability and condition of the house is best tested on the stability of its foundation and its roofing. You can tear down the walls and replace them anytime but the foundation is a totally different thing.
  • Zoning, square footage and permits. These are inspections that are concerned with the land size, location and necessary government permits of your house. You can obtain this type of inspection with a little aid from the titling company.

Hope the answer helps.

Andrew Kouvaritakis, JD

Ask Andrew: Should I Buy Or Rent?

Today’s blog post is actually an answer to a question that was emailed to me last week by The Investor’s Lawyer blog reader, Mr Tuah Lampar from Seberang Perai, Malaysia. Mr Lampar asked me if given his circumstances, should he buy a property or just rent?

First of all, a disclaimer. The following article does not constitute legal advice, and you should not take it seriously as such. Additionally, consider the cost implications of buying vs renting which are given a thorough treatment in this IEEE journal article. If you need the full article, email me.

Ever since the financial havoc of the recent past in Malaysia (and we do expect a slowdown in the Malaysia property sector for much of 2014), many prospective buyers have been afraid to take the plunge of buying a home – particularly in the Klang Valley (think Segambut, Kajang and USJ). There’s no surprise there. After all, home ownership (particularly in Malaysia) entails huge responsibilities not to mention that you’re essentially putting your hard earned money at risk. This is also why renting has soared while buying a home has earned a bad rap – although owning a home remains one of the major aspirations of Malaysians.

Fortunately, the real estate industry in Malaysia has slowly and steadily regained its standing over the years. Reports have shown home prices falling while renting going up (in certain areas outside the Klang Valley. We do see some areas such as KLCC where selected properties may be experiencing a decline in prices. Check out the KLCC Condos Database for more information – highly recommended.). If that’s one indication, it can only mean a good time to buy for those who’ve been considering of finally realizing their dreams of home ownership. Before buying, however, here are some things to consider.

Why Buy Instead Or Rent? Some Considerations

  • Home as Investment

Jumping from renting to owning a home is a serious financial move. Not only will it affect your entire budget, but you will need to deal with maintenance, taxes and most especially mortgage. But if you think about it, buying over renting is really all about making investment in the long run. When you’re renting, it’s like throwing money down the drain month after month. Paying mortgage, on one hand, is a heavier burden but with it comes a promise of ownership in the end.

  • Benefits of Tax Breaks

Another major advantage that owners have over renters is the benefit of tax deductions. When it’s time to file your taxes with Jabatan Hasil Dalam Negeri, you can deduct mortgage interest payments as well as other eligible home expenses. Some examples include home improvements such energy-efficient installations and the like. Talk to your tax consultant on that. If you need a recommendation, email me at :)

  • Freedom to Customize

Along with home ownership is the freedom to decorate rooms and customize space. If you own your home, sky’s the limit when it comes to designs or renovations in order to accommodate bigger rooms or additional space. There’s also no need to buy furniture from to time to time because you won’t be moving from one place to another like if you’re renter. Many Malaysians love renovating their homes (you just need to check out KLCC condos like Park Seven, Binjai Residency, Marc Residence and Kirana Residences for examples), and it’s quite understandable.

  • No Landlord to Deal With

If you’ve been renting for a long time, you know how much of a hassle it is to deal with unreasonable landlords. You are always in danger of eviction especially when the landlord decides to sell or accept a new tenant without ample prior notice. Reporting problems and waiting for them to get fixed is another pesky detail of renting. With buying a home, you won’t need to deal with these inconveniences any more. Although Malaysia real estate law highly favors the tenant, there’s still risk of getting evicted. I know some poor folks at Ridzuan Condominium in Petaling Jaya which had negative experiences with their landlords.

  • Savings in the Long Run

While there’s always the danger of foreclosure or depreciation, a good home investment will ensure that you earn good savings in the long run. For one, you can add and install energy-efficient improvements without consulting a landlord. Another perk of home ownership is being able to sell at the end of mortgage payment. If the investment was excellently picked, you may even earn huge profits minus the costs and expenses of ownership.

So all in all…

Home ownership is a dream come true for many. And if you’ve been considering buying over renting for a long while, then the list above are considerations that can help you make an informed decision. Remember, however, that buying is not for everyone. So before taking the plunge into many years of paying mortgage, you need to sit down and thoroughly examine your prospects as well as your job outlook.

I hope that answers your questions, Mr Tuah Lampar! Anyone else with questions just email – you’ll get an answer in future blog posts here at :)

Andrew Kouvaritakis, JD