You cannot negotiate lawyer fees for property transactions in Malaysia. This surprises most buyers. Unlike almost every other professional service, solicitor fees for property matters are fixed by legislation — the Solicitors' Remuneration Order 2023 (SRO 2023), effective 15 July 2023. Every lawyer in the country charges the same base rate for SPA preparation, loan documentation, and property transfers. The only variables are disbursements and whether your lawyer absorbs some of the ancillary costs.
This means the "shop around" advice you hear from property forums is largely misguided. You are not shopping for a cheaper fee. You are shopping for a better lawyer at the same fee. Understanding exactly what you will pay — down to the ringgit — lets you focus on what actually matters: competence, responsiveness, and experience with your type of transaction.
The Fee Scale: Solicitors' Remuneration Order 2023
The SRO 2023 replaced the earlier Solicitors' Remuneration Order 2005 and its amendments. It was passed by the Solicitors' Costs Committee, chaired by the Chief Judge of Malaya, on 4 July 2023. It prescribes the legal fees a solicitor may charge for property transactions. The scale is tiered, applied to the property price (for SPA and MOT) or the loan amount (for financing agreements).
| Value Bracket | Fee Rate |
|---|---|
| First RM500,000 | 1.25% (subject to minimum fee of RM500) |
| Next RM500,001 to RM7,500,000 | 1.00% |
| Above RM7,500,000 | Negotiable (typically up to 1%) |
These rates apply identically to three separate legal documents:
- Sale and Purchase Agreement (SPA) — based on property purchase price
- Loan/Financing Agreement — based on the loan/financing amount
- Memorandum of Transfer (MOT) — based on the property purchase price or market value
On top of the base legal fee, 6% Service Tax (SST) is charged on all professional fees. This was implemented under the Service Tax Act 2018.
The SRO fee scale is law, not a guideline. A lawyer who quotes below the scheduled rate is technically in breach of the Legal Profession Act 1976. However, the SRO 2023 permits solicitors to discount up to 25% on fees specified in Table A of the First Schedule and Table A of the Third Schedule. A lawyer who quotes above it is overcharging. Either way, something is wrong.
Who Pays What?
This is where confusion arises. Multiple lawyers are involved in a single property transaction, and each party pays their own.
Buyer's Costs
| Fee Category | Paid By | Lawyer |
|---|---|---|
| SPA legal fee | Buyer | Buyer's lawyer (or developer's panel lawyer for primary market) |
| Loan agreement legal fee | Buyer | Buyer's lawyer (or bank's panel lawyer) |
| MOT legal fee | Buyer | Buyer's lawyer |
| SPA stamp duty | Buyer | — |
| MOT stamp duty | Buyer | — |
| Loan stamp duty | Buyer | — |
Seller's Costs
| Fee Category | Paid By | Lawyer |
|---|---|---|
| Discharge of charge (loan redemption) | Seller | Seller's lawyer |
| SPA legal fee (seller's portion) | Seller | Seller's lawyer |
| RPGT filing | Seller | Seller's lawyer |
In a typical subsale transaction, the buyer engages one law firm that handles the SPA, loan agreement, and MOT. The seller engages a separate firm for the discharge and their side of the SPA. Each party pays their own lawyer.
For developer (primary market) purchases, the developer often appoints a panel lawyer for the SPA. The developer may absorb the SPA legal fee as a promotional package — this is common for new launches. The buyer still pays the loan agreement legal fee and, eventually, the MOT legal fee when strata title is issued.
Worked Example 1: RM500,000 Property
Assume: Malaysian buyer, 90% LTV financing (loan = RM450,000), subsale purchase.
Legal Fees
| Document | Base Amount | Calculation | Fee (RM) |
|---|---|---|---|
| SPA | RM500,000 | RM500K x 1.25% | 6,250 |
| Loan Agreement | RM450,000 | RM450K x 1.25% | 5,625 |
| MOT | RM500,000 | RM500K x 1.25% | 6,250 |
| Subtotal | 18,125 | ||
| SST (6%) | 1,088 | ||
| Total Legal Fees | 19,213 |
Disbursements
Disbursements are out-of-pocket costs the lawyer incurs on your behalf. They are passed through at cost.
| Disbursement | Estimated Cost (RM) |
|---|---|
| Land title search | 30 - 60 |
| Bankruptcy search | 20 - 40 |
| Company search (if seller is a company) | 30 - 50 |
| Registration fee (MOT) | 100 - 300 |
| Stamping of SPA | Varies (included in stamp duty) |
| Courier and postage | 50 - 100 |
| Photocopying and admin | 50 - 100 |
| Total Disbursements | 300 - 650 |
Stamp Duty (Separate from Legal Fees)
| Stamp Duty Type | Amount (RM) |
|---|---|
| MOT stamp duty (Item 32(a), Stamp Act 1949) | 9,000 |
| Loan stamp duty (0.5% x RM450K, Item 22(1)) | 2,250 |
| Total Stamp Duty | 11,250 |
Total Legal + Stamp Duty Cost
| Category | Amount (RM) |
|---|---|
| Legal fees (incl. SST) | 19,213 |
| Disbursements | ~500 |
| Stamp duty | 11,250 |
| Grand Total | ~30,963 |
That is approximately 6.2% of the property price in legal and stamp duty costs alone. This figure shocks most first-time buyers because agents typically only mention the 10% down payment.
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Worked Example 2: RM1,000,000 Property
Assume: Malaysian buyer, 90% LTV (loan = RM900,000), subsale.
Legal Fees
| Document | Base Amount | Calculation | Fee (RM) |
|---|---|---|---|
| SPA | RM1,000,000 | First RM500K x 1.25% = RM6,250 + Next RM500K x 1.00% = RM5,000 | 11,250 |
| Loan Agreement | RM900,000 | First RM500K x 1.25% = RM6,250 + Next RM400K x 1.00% = RM4,000 | 10,250 |
| MOT | RM1,000,000 | First RM500K x 1.25% = RM6,250 + Next RM500K x 1.00% = RM5,000 | 11,250 |
| Subtotal | 32,750 | ||
| SST (6%) | 1,965 | ||
| Total Legal Fees | 34,715 |
Disbursements
| Disbursement | Estimated Cost (RM) |
|---|---|
| Land title search | 30 - 60 |
| Bankruptcy search | 20 - 40 |
| Company search | 30 - 50 |
| Registration fee (MOT) | 200 - 500 |
| Courier and postage | 50 - 100 |
| Photocopying and admin | 50 - 100 |
| Total Disbursements | 400 - 850 |
Stamp Duty
| Stamp Duty Type | Amount (RM) |
|---|---|
| MOT stamp duty (Item 32(a), Stamp Act 1949) | 24,000 |
| Loan stamp duty (0.5% x RM900K, Item 22(1)) | 4,500 |
| Total Stamp Duty | 28,500 |
Total Legal + Stamp Duty Cost
| Category | Amount (RM) |
|---|---|
| Legal fees (incl. SST) | 34,715 |
| Disbursements | ~600 |
| Stamp duty | 28,500 |
| Grand Total | ~63,815 |
That is approximately 6.4% of the property price. The percentage increases slightly as the property price rises because MOT stamp duty rates are progressive.
Can You Negotiate?
The base legal fee: Partially. The SRO 2023 permits solicitors to offer a discount of up to 25% on fees specified in Table A of the First Schedule and Table A of the Third Schedule. Any discount beyond 25% would be in violation of the Legal Profession Act 1976.
However, there are legitimate ways the total cost varies:
| Variable | Negotiable? | Notes |
|---|---|---|
| Base legal fee | No | Fixed by SRO 2023 |
| SST (6%) | No | Statutory requirement |
| Disbursements | Partially | Some lawyers absorb minor disbursements (courier, photocopying) as part of service |
| Stamp duty | No | Government tax — fixed rates |
| Number of documents | Depends | Some developers absorb SPA legal fee; some banks offer to pay loan agreement legal fee as a promotion |
The real savings come from:
- Developer promotions — new launches often include "free SPA" (developer pays your SPA legal fee)
- Bank promotions — some banks absorb the loan agreement legal fee during promotional periods
- Combined firm — using one law firm for SPA, loan, and MOT can save on disbursements since searches are done once
SPA vs MOT: Why Two Fees on the Same Property?
This confuses many buyers. You pay legal fees on the SPA at the time of purchase. Then, months or years later, you pay legal fees again for the MOT when the title is ready for transfer.
- SPA is the contractual agreement between buyer and seller. It sets the terms of the sale.
- MOT is the instrument that actually transfers legal ownership in the land registry.
For a subsale property with existing title, the SPA and MOT are prepared and stamped relatively close together. For a developer purchase where strata title has not been issued, the SPA is signed at purchase but the MOT may only be done years later when strata title is available. You will need to pay legal fees and stamp duty at that later date.
This timing gap catches investors off guard. Budget for it.
Disbursements: The Hidden Line Items
The legal fee itself is transparent and predictable. The disbursements are where costs can vary between firms.
| Disbursement | What It Is | Typical Range (RM) |
|---|---|---|
| Land search (official) | Checking the land title at the land office for encumbrances, caveats, and ownership | 30 - 60 |
| Bankruptcy search | Checking if the seller is an undischarged bankrupt | 20 - 40 per person |
| Company search (SSM) | If the seller or developer is a company — verifying registration and status | 30 - 50 |
| Registration fee | Registering the MOT at the land office | 100 - 500 |
| LHDN stamp duty adjudication | If the property is subject to valuation by LHDN for stamp duty purposes | 100 - 200 |
| E-stamping fee | Administrative fee for electronic stamping | 10 - 50 |
| Photocopying | Certified true copies, documentation | 50 - 100 |
| Courier/postage | Registered mail, courier to land office and banks | 50 - 150 |
| Miscellaneous admin | Phone calls, transportation to land office | 50 - 200 |
Total disbursements typically range from RM500 to RM1,000 for a standard residential transaction. Ask your lawyer for an itemized disbursement estimate before engagement.
Choosing a Property Lawyer: What Actually Matters
Since the fee is fixed, choose based on:
| Factor | Why It Matters |
|---|---|
| Experience with your transaction type | Subsale, developer purchase, auction, and foreign buyer transactions each have different documentation requirements |
| Turnaround time | Delays in SPA completion can cause your loan approval to lapse |
| Responsiveness | You should be able to reach your lawyer or their clerk within 24 hours |
| Bank panel membership | If your lawyer is on the financing bank's panel, you save one firm's involvement |
| Proximity to land office | Reduces courier costs and speeds up registration |
Get a fee quotation in writing before engaging. It should itemize: legal fees, SST, estimated disbursements, and any additional charges. If the quote significantly differs from the SRO schedule, ask why.
Common Mistakes
-
Assuming "free legal fees" means zero legal cost. Developer "free SPA" promotions only cover the SPA legal fee. You still pay loan agreement legal fee, MOT legal fee, stamp duty, and disbursements.
-
Not budgeting for MOT costs later. On developer purchases, the MOT may come years after your SPA. You will need to pay MOT legal fee + MOT stamp duty at that point.
-
Choosing a lawyer purely on recommendation without checking bank panel status. If your lawyer is not on your bank's panel, the bank will appoint a separate panel lawyer for the loan agreement — adding coordination complexity and sometimes duplicate disbursements.
-
Forgetting SST. The 6% service tax on legal fees is mandatory and adds up. On an RM1M property, that is nearly RM2,000 in SST alone.
-
Paying disbursements without itemization. Always request a breakdown. Some firms charge blanket "administrative fees" that can exceed actual disbursement costs.
Summary: Total Legal Cost as Percentage of Property Price
| Property Price | Legal Fees (incl. SST) | Disbursements | Stamp Duty | Total | % of Price |
|---|---|---|---|---|---|
| RM300,000 | ~RM12,000 | ~RM400 | ~RM6,350 | ~RM18,750 | 6.3% |
| RM500,000 | ~RM19,200 | ~RM500 | ~RM11,250 | ~RM30,950 | 6.2% |
| RM800,000 | ~RM27,600 | ~RM600 | ~RM19,600 | ~RM47,800 | 6.0% |
| RM1,000,000 | ~RM34,700 | ~RM600 | ~RM28,500 | ~RM63,800 | 6.4% |
These figures assume 90% LTV financing and include SPA + loan + MOT legal fees, SST, estimated disbursements, and both MOT and loan stamp duty.
Sources
- Solicitors' Remuneration Order 2023 — Malaysian Bar Circular No. 185/2023 — Fee scale: 1.25% first RM500K, 1% next RM7M, effective 15 July 2023
- SRO 2023 Detailed Analysis (Richard Wee Chambers) — Full breakdown of Tables A and B, HDA transactions, permitted discounts
- Stamp Act 1949 — First Schedule (LHDN) — MOT stamp duty rates (Item 32(a)) and loan agreement rates (Item 22(1))
- Service Tax Act 2018 (Royal Malaysian Customs) — 6% SST on professional fees