Chapter 7: Charges and Caveat
First thing first, we have to distinguish these two words. (Many people do get confused with these two)
Charge : The act of charging the property to any financial institution for funding purpose.
Caveat : The act of preventing the property from re-selling, re-charge, or any other act by any interest party.
Case A (Charge)
Owner A need RM 100k for his children education. He has 5 acres of land. He can charge this land to any financial institution for RM 100k. However, all financial institution only accept TL, CL, PL title for charging purpose. NT is only accepted by certain bank due to its restriction for its nature of dealings.
Case B (Caveat)
Owner A charge his land to ABC bank for RM 100k. ABC bank will caveat the land by applying a caveat against the land to prevent the owner from selling the land to any party without the bank consent and fulfillment of the debt borrowed.
Case C (Caveat)
Owner A and B owns 10 acres land. Each owning 5acres. Owner B has lodge a caveat against the land. When owner A wants to charge the land to ABC bank for RM 100k, the bank will not accept as there is a caveat lodge against the land to prevent from charging, selling, etc without owner B consent. So therefore in order to charge the land, owner B has to lift the caveat off.
In a nut shell, again doing an official search will reveal all the hidden issues such as caveat and charge.
Disclaimer: The article above is solely for reference purpose and any legal issue please consult a lawyer for proper legal advices.