Buying a Property Without Strata Title After the Developer Has Collapsed: What Every Agent and Buyer Must Know

When a property is completed but the strata title has not yet been issued — and the developer subsequently goes bankrupt — the transaction is no longer a normal subsale. It becomes a legal, financial, and procedural case where every step is slower, riskier, and more expensive for all parties involved.
Most buyers, and many agents, only discover these complications after the deal is already in motion, resulting in rejected loan applications, legal disputes, and collapsed transactions. This article explains the situation clearly so that agents, lawyers, buyers, and investors can make informed decisions before committing.

1. What Happens When the Developer Is Bankrupt Before Strata Title Is Issued

Once the developer is wound up, a liquidator is appointed. This liquidator becomes the legal authority replacing the developer for all matters involving consent, documentation, title progress, and outstanding liabilities. Unlike a developer, the liquidator’s goal is not to assist owners, but to close the company and recover whatever value is left. Every document, consent, and verification now goes through the liquidator — often with imposed fees and delays.
This immediately affects:

Loan approval and bank willingness to finance the property
Transfer of ownership (no MOT, only Deed of Assignment route)
Legal costs and timelines
Buyer confidence and resale value
JMB/MC operations and compliance

2. Bank Financing Becomes Restricted

Most banks either decline or heavily limit financing for properties in this category because there is no strata title to charge and no solvent developer to hold liability.

Typical consequences:

Fewer banks will approve the loan
Lower margin of financing (higher downpayment required)
More supporting documents required
Higher interest rate or stricter terms imposed
Valuation may be reduced due to risk rating

A property that normally has 90% loan eligibility may be reduced to 60–70%, forcing the buyer to prepare significantly more cash. This is the primary reason such deals collapse.

3. Ownership Transfer Is No Longer Straightforward

With no strata title issued, transfer must be done via Deed of Assignment.
However, the DOA requires the developer’s consent — and in this case, the “developer” is now the liquidator.

Common complications:

Liquidator charges an administrative consent fee
Liquidator may refuse consent until arrears or disputes are settled
Delays are common, and there is no guaranteed timeline
Lawyers familiar with this process are required (not all firms will accept the case)
Any missing document in the original file may halt the transfer entirely

Where a normal subsale completes in 3–4 months, this type of transaction may take 9–18 months depending on document status.

4. Additional Costs That Buyers and Sellers May Not Expect

Cost Type	Why It Occurs
Liquidator consent fee	Developer no longer exists, liquidator charges for replacement role
Legal fees (higher than normal subsale)	Requires assignment route and specialised conveyancing
Strata title continuation cost	Application may be incomplete and requires funding
JMB contribution	JMB may need to fund certain compliance stages to proceed with title
Outstanding dues from previous owner	Liquidator may refuse consent until cleared

These costs are often not disclosed early, leading to buyer dissatisfaction and deal withdrawal.

5. Strata Title Status Must Be Verified Before Marketing the Property

A professional agent should confirm:

Whether the strata title application was ever submitted
Whether the file lodged with land office is complete
Whether the liquidator is cooperating with the JMB for title issuance
Whether there are arrears linked to the unit or the project
Whether the JMB has the funds to complete pending regulatory steps
Whether Form 14A, CCC, Schedule of Parcels, and survey documents are complete

Failure to confirm these before listing the property exposes the agent to legal and reputational risk.

How This Affects Property Agents

This type of property is not a basic listing. It requires:

Understanding of liquidator consent rules
Access to bankers who can confirm which banks still finance such units
Lawyers experienced with assignment cases under liquidation
Ability to explain risk and timeline to buyers upfront
Educated qualification of buyers (cash profile, loan expectation, timeline tolerance)

Agents who treat this as a normal subsale often face:

Rejected loans after weeks of effort
Angry buyers accusing them of withholding information
Lawyer pushback or case rejection
Withdrawn offers and wasted viewings
Loss of credibility in the marketplace

Agents who master this niche, however, become specialists able to close deals most agents avoid.

The Shift in Agent Identity

Type	Behaviour
Basic Agent	“Below market value, can faster sell.”
Professional Agent	“This property is legally and financially complex. Here is the full process, risk, and pathway to completion.”

The second type closes fewer deals, but closes higher-value, low-competition deals and becomes trusted by:

Distressed asset buyers
Lawyers
Bankers
Auction investors
JMB committees

This is a long-term positioning advantage.

Final Message to Agents

This is not a listing problem. It is a systems problem involving land law, liquidation, loan risk, and title administration.
Agents who learn how to navigate it become: