J bought and lives in a semi-detached house with his family and his brother, K. Unfortunately, due to illness J is unable to finance the remaining 20 years of housing loan. Hence he requested K to continue paying the loan on the term that the house will belong to K once the loan has been fully settled. K has agreed on the term and paid the remaining loan sum. K opined that an oral agreement is sufficient to secure his interest on the house. Is it true?


Although oral contract is recognized in Malaysia, it would be hard for K to prove the existence of the oral agreement unless J is honourable in keeping his words. Hence, it is advisable for K to prepare an agreement which clearly states the terms agreed upon and request J to sign it in the presence of witness. A contract in black and white is always the better proof.

Furthermore, if J passes away, it will be hard for K to claim as the house will be an estate to be distributed to J’s beneficiaries unless K is named as such in J’s will.

In fact for as long as J is the registered owner, he is still the rightful master of the land which is not to the best interest of K. A good solution would be to effect the transfer straight away and for K to refinance the house in his name as the owner and borrower.

So, how much did you know about this Legal Myth?

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