Charge Form — Property (Malaysia)
MEMORANDUM OF CHARGE
Section 241, National Land Code 1965 (Act 56/1965) | Form 16A | Financial Services Act 2013
Date: [Charge Date]
CHARGOR
Name: [Chargor Name]
Address: [Chargor Address]
CHARGEE
Name: [Chargee Name]
Address: [Chargee Address]
CHARGED PROPERTY
Title Reference: [Title Reference]
Address: [Property Address]
Area: [Land Area]
State: [State]
CHARGE TERMS
1. PRINCIPAL SUM AND FACILITY
1.1 The Chargor, [Chargor Name], hereby charges the Property described above as security for the repayment of the principal sum of [Principal Sum] ("Principal Sum") advanced or to be advanced by the Chargee, [Chargee Name], to the Chargor under the loan/financing facility ("the Facility"), being a [Financing Type] facility for a tenure of [Loan Tenure] years at an interest/profit rate of [Interest Rate].
1.2 This charge is created pursuant to Section 241 of the National Land Code 1965 and shall be registered as a charge against the title to the Charged Property at the Pejabat Tanah dan Galian of [State].
2. CHARGOR'S OBLIGATIONS
2.1 The Chargor shall punctually pay to the Chargee all principal, interest or profit, fees, and charges due under the Facility.
2.2 The Chargor shall not, without the prior written consent of the Chargee, sell, transfer, lease, charge, or otherwise deal with or encumber the Charged Property.
2.3 The Chargor shall maintain the Charged Property in good repair and keep it insured against fire and other risks in amounts satisfactory to the Chargee.
3. ENFORCEMENT
3.1 If the Chargor defaults in payment of any sum due under the Facility and the default continues for thirty (30) days after written demand by the Chargee, the Chargee shall be entitled to apply to the High Court of Malaya or Sessions Court for an Order for Sale of the Charged Property pursuant to Section 254 of the National Land Code 1965.
4. STAMP DUTY
4.1 This Memorandum of Charge is subject to stamp duty under the Stamp Act 1949 (Act 378) at the rate of RM 5 per RM 1,000 of the Principal Sum secured. The Chargor shall bear the cost of stamping and registration.
Chargor
________________
Signature
Chargee (Authorised Officer)
________________
Signature
What Is a Charge Form — Property (Malaysia)?
A Charge Form — Property in Malaysia records the information the relevant body requires to process the matter.
In Malaysian property financing, charges are created in two main contexts. First, for housing loans provided by banks and financial institutions regulated by Bank Negara Malaysia (BNM) under the Financial Services Act 2013 (FSA 2013, Act 758) or the Islamic Financial Services Act 2013 (IFSA 2013, Act 759) — including commercial banks, Islamic banks, and building societies — the Memorandum of Charge secures the bank's loan against the property purchased by the borrower. Second, for corporate financing where a company registered under the Companies Act 2016 (Act 777) charges company-owned property to a bank as security for a business loan or revolving credit facility.
The NLC 1965 provides two types of charges: a principal sum charge (Seksyen 243) for a fixed loan amount; and a further charge or future advance charge (Seksyen 244) for revolving credit or overdraft facilities where the secured amount fluctuates. Under Section 254 of the NLC 1965, the chargee has the right to apply to the High Court of Malaya for an Order for Sale if the chargor defaults on the loan repayment — this is the primary enforcement mechanism for registered charges in Malaysia.
For Islamic financing, banks use Islamic charge instruments such as the Assignment of Benefits or Deed of Assignment with Power of Attorney (DAPA) for pending title properties, and Form 16A Memorandum of Charge for properties with individual titles. The shariah-compliant structure of the charge differs in form (e.g., under Bai' Bithaman Ajil, Musharakah Mutanaqisah, or Murabahah) but the registration requirements under the NLC 1965 are the same.
The legal framework governing the Charge Form — Property (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Charge Form — Property (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The National Land Code 1965 (Act 56) sets the foundational requirements.
When Do You Need a Charge Form — Property (Malaysia)?
A Memorandum of Charge under the NLC 1965 is required in Malaysia whenever a financial institution takes a registered security interest over land or a strata parcel as collateral for a loan or financing.
A Charge Form is required when a purchaser takes a housing loan from a bank regulated by BNM to finance the purchase of a residential or commercial property with an individual or strata title. The bank will not disburse the loan until the Memorandum of Charge is executed by the chargor and registered at the PTG, creating the bank's registered security.
A Charge Form is needed when a business owner refinances an existing property under a new loan facility — for example, refinancing a housing loan to take advantage of a lower interest rate or to release equity. The existing charge must first be discharged (by filing Form 16N) before a new charge in favour of the new lender can be registered.
A Charge Form is required when a company mortgages commercial property (shop lot, office building, or industrial land) as security for a business loan, term loan, or overdraft facility from a commercial bank. The charge is registered on the company's property title and the bank's appointment as chargee is noted on the title.
A Charge Form is needed when a developer creates a charge over a land parcel as security for a bridging loan obtained from a financial institution to finance a housing development project. This is a project financing charge and the developer's housing development account (HDA account) obligations under the HDA 1966 must not be compromised by the charge.
A Charge Form is required when a co-owner charges their undivided share in a jointly-owned property as security for a personal loan or business facility — though such charges over undivided shares are subject to limitations in their enforceability under the NLC 1965.
What to Include in Your Charge Form — Property (Malaysia)
A valid Memorandum of Charge (Form 16A) under the NLC 1965 must contain the following essential elements.
Chargor details: Full legal name, NRIC or passport number, and address of the chargor (property owner and borrower). For corporate chargors, the SSM registration number and registered office. The name must match the Land Register exactly.
Chargee details: Full legal name of the financial institution (chargee), its bank licence number or SSM registration, and registered office address. The chargee must be authorised to take charges under its licence from BNM.
Property description: Title reference (Geran, Pajakan Negeri, or Hakmilik Strata), lot or parcel number, mukim, daerah, state, and land area as per the document of title.
Principal sum: The amount of the loan or financing facility secured by the charge, expressed in RM. For a revolving facility, the maximum amount secured at any time must be stated under Section 244 of the NLC 1965.
Interest rate or profit rate: The applicable interest rate per annum (for conventional loans) or profit rate (for Islamic financing) and any default interest provision.
Charge terms: The duration of the charge (loan tenure), the repayment schedule, and the conditions under which the chargee may take enforcement action under Section 254 of the NLC 1965 (application for Order for Sale).
Restrictions on chargor: The chargor's covenants not to further charge, transfer, or deal with the property without the chargee's prior written consent during the subsistence of the charge.
Stamp duty: The Memorandum of Charge attracts stamp duty under the Stamp Act 1949 at RM 5 per RM 1,000 of the principal sum secured (loan stamp duty), assessed by LHDN. The stamped Form 16A must be lodged at the PTG for registration.
Additional compliance elements for a Charge Form — Property (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
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Forms Legal. (2026). Charge Form — Property (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/real-estate/property/charge-form-property-malaysia
"Charge Form — Property (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/real-estate/property/charge-form-property-malaysia.
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author = {{Forms Legal}},
title = {Charge Form — Property (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/real-estate/property/charge-form-property-malaysia}},
note = {Free legal document template. Based on National Land Code 1965 (Act 56)}
}Frequently Asked Questions
A registered charge under the National Land Code 1965 (NLC 1965) is a legal mortgage over land or a strata parcel in Malaysia created by the registration of a Memorandum of Charge (Form 16A) at the Pejabat Tanah dan Galian (PTG) of the relevant state. Once registered, the charge is endorsed on the document of title and is a public record visible to any party conducting a title search. The chargee (bank or financial institution) does not obtain title to the property — the chargor (borrower) remains the registered proprietor — but the chargee acquires the right under Section 254 of the NLC 1965 to apply to the High Court of Malaya for an Order for Sale if the chargor defaults on loan repayments. The Torrens system's indefeasibility under Section 340 of the NLC 1965 protects the chargee's registered interest against subsequent encumbrances and third-party claims.
If a housing loan borrower (chargor) defaults on loan repayments, the chargee (bank) may take enforcement action under Section 254 of the National Land Code 1965 by filing a Summons in the High Court of Malaya or the Sessions Court (for properties valued under RM 250,000) to obtain an Order for Sale. The Order for Sale authorises the court to sell the property by public auction or private treaty to recover the outstanding loan balance. The enforcement process under Order 83 of the Rules of Court 2012 typically takes 12 to 24 months from the filing of the summons to the completion of the auction sale. The bank may also appoint a receiver and manager under the loan agreement. Before enforcement, the bank must serve a statutory notice of demand under the charge instrument giving the borrower a period (typically 30 days) to pay the arrears or remedy the default.
Yes. A Memorandum of Charge (Form 16A) under the National Land Code 1965 attracts stamp duty under the Stamp Act 1949 (Act 378). The applicable stamp duty on a loan or financing agreement (and the corresponding charge instrument) is calculated under Item 27 of Schedule 1 to the Stamp Act 1949 at RM 5 for every RM 1,000 (or part thereof) of the principal secured amount — commonly referred to as 'loan stamp duty'. For example, a housing loan of RM 500,000 would attract loan stamp duty of RM 2,500. The duty is assessed on the loan/financing agreement executed between the borrower and the bank, and the Memorandum of Charge itself is stamped as a security document. The Inland Revenue Board of Malaysia (LHDN) adjudicates and stamps the loan agreement and charge documents, and the stamped Form 16A is then lodged for registration at the PTG.
A charge and a caveat are both encumbrances that can be endorsed on a land title in Malaysia, but they serve fundamentally different purposes under the National Land Code 1965. A charge (Seksyen 241–278 NLC 1965) is a registered security interest created by the landowner in favour of a financial institution as collateral for a loan or financing facility — it is a substantive proprietary interest that gives the chargee the right to apply for an Order for Sale on default. A caveat under Part Twenty-Six (Sections 319–340) of the NLC 1965, by contrast, is a statutory notice lodged by a person claiming an interest in the land to prevent any dealings with the land without the caveator's knowledge. A caveat does not create a proprietary interest — it merely freezes the title to preserve the status quo while the caveator's claim is established. A charge requires the chargor's consent and execution of Form 16A; a caveat can be lodged unilaterally by the caveator (private caveat) without the landowner's consent.
A Charge Form — Property (Malaysia) does not legally require a lawyer in Malaysia, and individuals and businesses may draft and execute the document independently. The National Land Code 1965 (Act 56) does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified Malaysia lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Federal Court of Malaysia has jurisdiction over disputes arising from this type of document, and Companies Commission of Malaysia (SSM) may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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