Discharge of Charge (Malaysia)
DISCHARGE OF CHARGE
Section 275, National Land Code 1965 (Act 56/1965) | Form 16N
Date: [Discharge Date]
CHARGEE (DISCHARGING PARTY)
Name: [Chargee Name]
Address: [Chargee Address]
CHARGOR
Name: [Chargor Name]
Address: [Chargor Address]
DISCHARGED PROPERTY
Title Reference: [Title Reference]
Address: [Property Address]
Charge Registration / Presentation Number: [Charge Reference]
Original Principal Sum: [Principal Sum]
State: [State]
DISCHARGE
The Chargee, [Chargee Name], hereby acknowledges that the principal sum of [Principal Sum] together with all interest, profit, fees, and charges accrued thereunder have been fully paid and satisfied by the Chargor, [Chargor Name].
The Chargee hereby discharges the Chargor and the land described under Title Reference [Title Reference] from the charge registered under Presentation/Charge Reference No. [Charge Reference], and consents to the removal of the charge endorsement from the document of title by the Registrar of Titles of the Pejabat Tanah dan Galian of [State].
The Chargee confirms that the original document of title to the property has been/will be returned to the Chargor's solicitors simultaneously with the delivery of this Discharge of Charge.
This Discharge of Charge is issued pursuant to Section 275 of the National Land Code 1965 (Act 56/1965) and must be stamped under the Stamp Act 1949 and lodged at the Pejabat Tanah dan Galian of [State] for registration.
Chargee (Authorised Officer)
________________
Signature
What Is a Discharge of Charge (Malaysia)?
A Discharge of Charge in Malaysia records the release of a charge or obligation once it has been fully satisfied.
A Discharge of Charge is a critical document in Malaysian property transactions. In every subsale transaction where the vendor has an outstanding housing loan registered as a charge against the property title, the vendor's solicitors must obtain a Discharge of Charge from the vendor's bank concurrently with completion — the discharge is typically filed for registration at the PTG simultaneously with the purchaser's Memorandum of Transfer. This simultaneous presentation confirms that the purchaser receives an unencumbered title.
The process of obtaining a Discharge of Charge from a financial institution in Malaysia involves the following steps: the vendor's solicitors give the bank formal redemption notice (typically 30 days notice) and request the bank's redemption statement showing the exact amount required to redeem the loan; the solicitors receive the redemption sum from the purchaser's proceeds and pay it to the bank; the bank issues the Form 16N (Discharge of Charge) together with the original document of title (if held by the bank); and the solicitors register the Form 16N at the PTG.
For Islamic financing structures, the corresponding discharge instrument may differ in name (e.g., 'Memorandum of Reassignment' or 'Deed of Receipt and Reassignment' for DAPA-based financing) but Form 16N is still used to discharge the registered charge component. The Discharge of Charge must be stamped under the Stamp Act 1949 at a nominal fixed duty rate before lodgement at the PTG.
The legal framework governing the Discharge of Charge (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 Discharge of Charge (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 Discharge of Charge (Malaysia)?
A Discharge of Charge is required in Malaysia whenever a registered charge over property is to be released following repayment or refinancing.
A Discharge of Charge is required when the borrower fully repays a housing loan and wants to obtain a free title to the property. The bank issues Form 16N upon receipt of the final repayment, releasing the charge from the title.
A Discharge of Charge is needed in a subsale transaction where the vendor has an outstanding charge from their bank. Before the vendor can deliver a clean title to the purchaser, the vendor's bank must provide a Discharge of Charge to be registered at the PTG simultaneously with the Memorandum of Transfer to the purchaser.
A Discharge of Charge is required when the borrower refinances a housing loan to a new financial institution offering better terms. The existing chargee bank issues a Discharge of Charge upon receiving the redemption sum from the new bank, and the new bank simultaneously registers a new charge over the same title.
A Discharge of Charge is needed when an auction purchaser completes the purchase of a foreclosed property sold under a court-ordered auction under Order 83 of the Rules of Court 2012. The auction proceeds are used to settle the outstanding charge, and the bank provides a Discharge of Charge to clear the title for the auction purchaser.
A Discharge of Charge is required when a developer who charged development land as security for a bridging loan completes the repayment of the bridging loan and wishes to release individual or strata titles to purchasers free from the developer's charge.
Parties in Malaysia should prepare a Discharge of Charge (Malaysia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. 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). Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Discharge of Charge (Malaysia)
A valid Discharge of Charge (Form 16N) under the NLC 1965 must contain the following essential elements.
Chargee details: Full legal name of the financial institution (chargee) executing the discharge, its licence or registration number, and the address of its registered office or the branch authorised to execute the discharge. The discharge must be executed by an authorised officer of the chargee bank.
Chargor details: Full legal name and NRIC or company registration number of the chargor (borrower and property owner) as they appear on the registered charge.
Property and title details: Title reference (Geran, Pajakan Negeri, or Hakmilik Strata), lot or parcel number, mukim, daerah, state, and land area as per the document of title. The charge reference number (as entered in the Land Register at the PTG) must be stated to identify the specific charge being discharged.
Statement of discharge: The operative statement by the chargee confirming that the principal sum and all interest or profit due under the charge have been fully repaid and that the chargee discharges the chargor and the land from the charge.
Title document return: Confirmation by the chargee that the original document of title (Geran, Pajakan, or Hakmilik Strata) held by the bank as custodian will be returned to the chargor or their solicitors for lodgement at the PTG with the Form 16N.
Stamp duty: The Form 16N attracts a nominal fixed stamp duty under the Stamp Act 1949 (Act 378). The stamped Form 16N must be lodged at the PTG together with the original title document for the charge endorsement to be removed.
Redemption statement: The bank's redemption statement showing the exact sum (outstanding principal, accrued interest, legal costs, and government charges) required to fully redeem the loan and obtain the Discharge of Charge — typically valid for 30 days from the date of issuance.
Additional compliance elements for a Discharge of Charge (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). Discharge of Charge (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/real-estate/property/discharge-of-charge-malaysia
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author = {{Forms Legal}},
title = {Discharge of Charge (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/real-estate/property/discharge-of-charge-malaysia}},
note = {Free legal document template. Based on National Land Code 1965 (Act 56)}
}Frequently Asked Questions
To obtain a Discharge of Charge (Form 16N) in Malaysia, the chargor or their solicitor must follow these steps. First, give the chargee bank formal redemption notice — most banks require 30 days prior written notice of the intention to redeem the loan in full. Request a redemption statement from the bank showing the exact outstanding amount (principal, accrued interest, early settlement penalty if applicable, and government charges) as of the intended redemption date. Pay the redemption sum to the bank in cleared funds — typically by way of bank draft or telegraphic transfer into the bank's nominated account. The bank will then release the Discharge of Charge (Form 16N) together with the original document of title held by the bank as security. The solicitor then lodges both documents at the PTG for registration to remove the charge endorsement from the title. The entire process — from redemption notice to registration of discharge — typically takes 6 to 8 weeks, depending on the bank's documentation process and the PTG's registration timeline.
A redemption statement in a Malaysian property transaction is a formal calculation issued by the chargee (bank) showing the exact total sum required to fully repay the outstanding housing loan or financing facility and obtain the release of the registered charge (Discharge of Charge, Form 16N). The redemption statement typically shows the outstanding principal balance as of a specified redemption date, accrued daily interest or profit up to the redemption date, any monthly instalments in arrears, an early settlement penalty or lock-in fee (if the loan is being redeemed within the lock-in period — typically 3 to 5 years), legal costs incurred by the bank in issuing the discharge documents, and government charges such as quit rent or assessment arrears paid by the bank on the chargor's behalf. The redemption statement is usually valid for 30 days from the date of issuance. In subsale transactions, the purchaser's solicitor requests the redemption statement from the vendor's bank on the vendor's behalf to structure the payment of the balance purchase price.
The time to register a Discharge of Charge (Form 16N) at the Pejabat Tanah dan Galian (PTG) in Malaysia varies by state and PTG workload. In general, registration of a Discharge of Charge takes 4 to 8 weeks from the date of lodgement if all documents are in order. In practice, subsale transactions require the simultaneous lodgement of the Discharge of Charge and the Memorandum of Transfer (Form 14A) at the PTG — the PTG will only register the transfer once it confirms that the discharge is in order. Kuala Lumpur's Federal Territory Land Registry and Selangor's PTG at Shah Alam generally process documents within 4 to 6 weeks for electronic submissions through the e-Tanah system. PTGs in Penang and Johor may take 6 to 10 weeks. In urgent cases involving property sale transactions, solicitors may request expedited processing (permohonan ekspres) at an additional fee. The registrar will endorse the removal of the charge on the document of title upon completion of registration.
A Discharge of Charge (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.
A Discharge of Charge (Malaysia) does not legally require a lawyer in Malaysia, though legal advice is recommended. Under Malaysian law, the Contracts Act 1950 (Act 136) governs agreements. The Companies Commission of Malaysia (SSM) regulates corporate documents under the Companies Act 2016 (Act 777). The Employment Act 1955 and Industrial Court handle employment disputes. The Personal Data Protection Act 2010 (Act 709) imposes data protection obligations. Forms-legal.com provides this template as a starting point — always review with a qualified Malaysian lawyer for significant transactions. Under Malaysia law, National Land Code 1965 (Act 56), parties should seek independent legal advice from a qualified lawyer to confirm compliance with all applicable requirements. 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). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
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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