Deed of assignment vs Deed of mutual covenant
As a buyer of property, we will come across few terms of document such as deed of assignment and deed of mutual covenant.
What’s the different between both of this contract? Let me break it down and explain in depth for both documents applied.
Deed of assignment (DOA)
| – DOA is a legal document that transfers the interest of the owner of that interest to the person to whom it is assigned, the assignee. When ownership is transferred, the deed of assignment shows the new legal owner of the property. Sign DOA, When land still master title.|
– Form 14A is a legal document that transfers the interest of the owner of that interest to the person to whom it is assigned, the assignee. When ownership is transferred, the deed of assignment shows the new legal owner of the property. Sign Form 14A, when land has registered with strata/individual title.
- When buyer purchase a property, they need to sign few documents prepared by lawyer
- Sales purchase agreement
- Form 14A, which is a memorandum of transfer (For property whom have title)
- If the property doesn’t have title yet (still master title), they will required signing Deed of assignment instead Form 14A.
- For property registration with title, they will sign form 14A.
Submission of docs required
- Without title, sign deed of assignment
- Property without title, will sign DOA, whereby no registration at land office is required compare to with title (form 14A).
Hence, this allows property land without title can be sold or change hand just with DOA(deed of assignment)
- DOA act as a legal instrument whereby conveyance means of rights to assign seller(Assignor) assigns his/her rights to the property buyer Assignee (Buyer)
- When DOA is duly executed and stamped, Buyer (Assignee) acquires legal rights and title to the property assigned. However, the process of adjudicated is similar.
- When title is issued for non title property, buyer will engage with the lawyer to transfer the property into his/her name and charge in favor of his/her end financer(bank).
Deed of mutual covenant
- Deed of Mutual agreement is a contract signed together with Sales purchase agreement. It’s an agreement under seal, whereby it binds all owners of a strata scheme properties community or non landed buildings.
The document basically set out rules to bind all owners on all the liabilities of co-owners, in terms of establishes management rules as a standard common property management rules.
- With DMC signed, all co-owners will abide to the rules and regulations. Any violation or damages against losses, owner parties can take legal action against other parties whom broke the rules.
- Why having DMC when there’s a management community JMB (joint management body) that take cares of the community welfare?
Well, DMC will only active for around 12months before JMB are being formed. JMB usually formed after 1 years of property take over from developer authorities. Residents of the owned property at the community will form a JMB to take care welfare of the property after vacant possession.
Residents will congregate for a general meeting, put in necessary papers to registrar of societies, to officially formed the JMB association
Hence, DMC will ceased to exist after JMB is formed. All owner of the community will follow house rule of JMB.
Deed of Mutual Covenant signed with developer will state that developer providing 12 months of security service from date of vacant possession.
- The difference for DOA is to provide a transfer of ownership of property without title being issued yet
- Deed of mutual covenant is a house rule set before JMB formed.
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