In Malaysia, one of the most frequently asked questions and concerns couples have is how their property will be divided if they decide to end their relationship through divorce.
Therefore, this article will discuss in depth the division of property in a divorce in Malaysia and how you can prepare for a divorce.
Divorce Property Distribution and Property Purchase in Malaysia
In Malaysia, a husband and wife usually buy a house together as a marriage home before or after marriage.
Under the country's land law, the National Land Code (Revised 2020), land (including houses) can be owned in a number of undivided shares. The most common are full shares (sole ownership) and half shares (joint ownership), as described below:
Sole ownership: This means that the property belongs to the person registered on the title of the property. In a family context, this can be the husband or wife.
The advantage is that it can be easier to sell later because it usually only requires the consent of the owner. However, the loan obtained for the purchase may be lower because it only considers the income of the owner.
Joint ownership: This means that two or more people jointly own an equal share and have equal rights. In a family context, this means that the husband and wife each own half.
The advantage is that the couple can combine their income and buy a higher-priced property, and then apply for a higher loan amount and lower bank interest.
But the disadvantage is that the couple may disagree on issues such as price when selling the property in the future.
Divorce Property Division
In Malaysia, if the parties decide to divorce, then the Malaysian divorce law, the Law Reform (Marriage and Divorce) Act 1976 (“LRA”) will apply equally to both men and women (male and female). This Malaysian divorce law is different from the laws in Germany and the United Kingdom because it focuses more on the parties’ contributions to property and other household matters.
Under Section 76 of the LRA, our court, the High Court of Malaya, has the power to order the parties to divide any assets they acquired during the marriage or to sell any such assets and order the parties to divide the money from the sale when granting a decree of divorce or judicial separation.
The next question is what are marital assets? The meaning of marital assets is assets acquired during the marriage, including assets owned by one party before the marriage, which have been substantially improved during the marriage or through the joint efforts of both parties.
Joint assets include houses, cars, cash, savings (such as fixed deposits, bank accounts), and investments such as stocks and trust funds. Others also include company shares, jewelry, and insurance policies.
In a divorce in Malaysia, if both parties can agree on the terms of the divorce, including the division of property, they can file for divorce together through a joint divorce application. If they cannot agree on the divorce or the terms, or both, then they can each file for divorce unilaterally.
This is explained in more detail below.
Factors Affecting Property Distribution
The most common misconception is that when a couple files for divorce, jointly owned property will be divided equally between the husband and wife.
According to Section 76 of the LRA, there are some aspects that the court will consider when deciding on the division of property in a divorce in Malaysia, and the decision will be made by the court based on the specific circumstances of the case.
These factors are as follows:
The extent to which the husband and wife have contributed in terms of money, property or work to acquire assets or to pay for the welfare of the family. Here, the court will consider both the direct and indirect contributions of the husband and wife.
For example, direct financial contributions to the purchase of a property include down payment, loan instalments and repairs paid. Indirect financial contributions include furniture purchases, household and grocery expenses, utility bills, etc.
The extent to which the other party who did not acquire assets has contributed to the welfare of the family by taking care of the home or looking after the family. This usually happens when either spouse (usually the female) chooses to stay at home to take care of the family and do daily errands.
Any debts incurred by either spouse for the common benefit, such as mortgages and other loans.
The needs of minor children in the marriage, if any. If the mother is awarded custody of the child, the court may give her a larger share of the property because she has to take care of the child's daily expenses.
Duration of marriage.
According to the law of divorce maintenance in Malaysia, maintenance does not affect the division of property. If you are looking for advice in this regard, please contact us and our legal firm in Kuala Lumpur will help you.
After considering various factors and circumstances, the court will make a decision that allows both parties to continue their lives and fairly compensate them for their contributions to the property and the family.
The judge will usually order that the property be divided into certain shares, or that the property will be sold and then the remaining money will be divided into certain shares after the mortgage is paid off.
Preparation for property division before and during divorce proceedings
If you anticipate a possible divorce, make a comprehensive list of all assets and liabilities to ensure nothing is missed so that they can be divided fairly later.
In addition, you should keep copies of relevant documents such as property titles, bank statements, stock certificates, etc. The court will use these documents to determine the owner of the property and make decisions accordingly.
Getting the services of a Malaysian divorce lawyer who is familiar with estate planning in Malaysia can help you.
The role of JPN in divorce proceedings
Our national marriage and divorce registry, Jabatan Pendaftaran Pendaftaran Negara (JPN), plays an important role in divorce proceedings. They can issue Malaysian Divorce Certificates and Single Status Certificate Malaysia to divorcing couples (including ex-husbands).
Conclusion
Understanding the laws governing property distribution during divorce in Malaysia will make your divorce case go more smoothly and achieve a better outcome. If you are looking for help, please contact us. Our friendly lawyers will be able to assist you.
