Selling an Operating Factory: Separate Regulated Plant From the Property Before Listing

An operating factory contains several different things at once: land, building fabric, fixed services, production equipment, leased assets, tenant property and plant that may require a certificate of fitness. If the listing collapses all of them into 'factory with machinery', the owner creates avoidable disputes over price, ownership, compliance, removal and handover. Malaysia’s Occupational Safety and Health (Plant Requiring Certificate of Fitness) Regulations 2024 prescribe steam boilers, pressure vessels and lifting machinery as broad regulated categories, subject to specific exclusions. The sale schedule must therefore identify the actual item and evidence, not classify equipment by appearance or marketing language.

Draw the Asset Boundary Before Marketing

Valuation language already recognises the need for separation. JPPH lists land, buildings, plant and machinery within its valuation scope and includes purchase and sale among the purposes. The Securities Commission’s PME FAQ describes plant, machinery and equipment as tangible assets other than realty used to generate income. Those sources do not decide private ownership or fixture law, but they expose the mistake in treating every bolted item as part of the real property. Before photography or price guidance, the owner, lawyer, valuer and technical team should agree a provisional boundary that can be tested against title, contracts, invoices and the physical installation.

• Create unique asset IDs tied to location, make, model, serial or registration details without publishing sensitive identifiers in the listing.
• Classify each item provisionally as real property, included plant, excluded plant, third-party asset, leased asset, tenant asset or unresolved.
• Record legal owner, beneficial owner, financier, operator, maintainer and any party holding removal or access rights.
• Link purchase invoices, hire-purchase or lease documents, warranties, insurance and prior sale schedules to the same asset ID.
• Ask legal and valuation advisers to resolve fixtures, security interests, tax and allocation questions for the actual transaction.

Operator judgment: use a layered site plan. Layer one shows land and building. Layer two shows services intended to remain, such as substations, switchboards, process piping and fire systems, without assuming their legal treatment. Layer three shows production plant and regulated items. Layer four shows excluded and third-party assets plus their removal routes. A buyer can then understand what the asking price covers, while advisers still have room to confirm the legal boundary.

Verify the Regulated-Plant Identity and Record Chain

P.U. (A) 99/2024 came into force on 1 June 2024 and prescribes steam boilers, pressure vessels and lifting machinery as plant requiring certificates of fitness. The schedules also contain non-applications, so a colloquial name such as 'hoist', 'compressor tank' or 'crane' is not enough to determine status. DOSH’s current lifting-machinery page says power-driven lifting machinery generally requires design verification and a valid certificate before construction, installation or use, subject to the stated exclusions, with applications moving through MySKUD via MyKKP. Obtain competent confirmation for every item.

• Match the physical asset to its DOSH registration number, design verification, installation approval and current certificate where applicable.
• Check whether location, owner, occupier, safe working load, pressure, configuration and equipment identity agree across records.
• Collect inspection, testing, comprehensive examination, maintenance, repair, alteration and incident records for the stated period.
• Record certificate and inspection dates; the 2024 regulations state that a certificate is valid for 15 months from inspection.
• Identify missing, expired, mismatched or unreadable records as specific exceptions and stop operation if competent advice requires it.
• Keep public marketing generic; provide sensitive plant records through a controlled buyer due-diligence process.

The regulations require employers to maintain plant maintenance records and make information and documents relating to design verification, construction, installation, operation, testing, inspection, repair, alteration, maintenance and comprehensive examination available at the workplace in Malay or English that can be easily understood. That record chain is part of transaction readiness. A certificate image without the underlying asset match and maintenance history is not a complete handover pack. Equally, a missing record should not be hidden behind a broad 'as is' label; it should be investigated, disclosed and allocated.

Choose Include, Exclude or Transfer With Conditions

Each asset now needs a commercial decision. Included plant passes with the sale subject to an agreed price allocation, condition standard, records and transfer steps. Excluded plant remains the seller’s responsibility and needs a safe removal and making-good plan. Third-party plant requires the counterparty’s consent or a documented continuation arrangement. Unresolved plant cannot be photographed as a sale feature until ownership and compliance are clarified. JPPH and SC materials support separate plant-and-machinery valuation concepts, but the transaction team must determine who appoints the valuer and which premise, date and asset condition apply.

• State whether each included asset is sold in place, operating, isolated, decommissioned or subject to buyer testing.
• Allocate purchase price only after the asset population and valuation basis are clear, with tax and accounting advice.
• Identify warranties that can transfer, service contracts that require novation and spare parts or software that are essential to operation.
• For each excluded asset, set isolation, dismantling, lifting, transport, disposal, access and reinstatement responsibilities.
• For each third-party asset, obtain written consent and specify what happens if consent or financing release is not secured.
• Use a retained sum or other contractual mechanism where removal or record completion continues after signing.

P.U. (A) 99/2024 says that when an owner sells, leases, transfers or disposes of plant requiring a certificate of fitness, the owner must notify the officer or licensed person within 30 days. That is a regulatory plant step, not proof that the asset passes automatically under the property contract. The sale agreement should identify who prepares and submits applicable notices, who provides the acknowledgement, how MyKKP records are handled, and what happens if the buyer changes location, use or configuration.

Plan Dismantling and Making-Good as Engineering Work

Removing plant can damage the property the buyer thought it was acquiring. P.U. (A) 99/2024 requires competent persons for dismantling specified steam boilers and lifting machinery. DOSH’s current installer-and-dismantler page describes registered competent-company requirements for specified fabrication, installation, erection, dismantling and related work. A seller should therefore avoid promising simple removal by a general contractor. The work package needs equipment-specific scope, competent-party confirmation, isolation, lifting method, structural review and a clear handback condition.

• Survey foundations, rails, roof or wall penetrations, platforms, pits, ducts, pipework and cables connected to each excluded asset.
• Define electrical, pressure, fuel, hydraulic, pneumatic, chemical and stored-energy isolation before dismantling begins.
• Confirm competent-person scope, permits, lifting plan, temporary works, exclusion zones, supervision and inspection records.
• Protect retained fire, drainage, structural, electrical and production systems during removal and testing.
• Specify whether bases, openings, rails and services are removed, capped, retained or adapted, with drawings of the final state.
• Agree floor, wall, roof, coating, waterproofing and service reinstatement standards plus evidence of completion.

Operator judgment: mark the removal route from the asset to the site boundary and test it against door sizes, floor capacity, overhead obstructions, neighbour rights and continuing operations. If a crane or wall opening is required, price and approve it before accepting a short vacant-possession period. Photograph and scan the relevant areas before work, then close the schedule with as-left drawings, test results and a joint inspection. 'Make good' is too vague for a machine foundation or roof penetration.

Package the Listing, Agreement and Handover Consistently

The public listing should describe the property without implying that unverified or excluded machinery is included. The confidential information pack can provide the controlled asset schedule, compliance status, photographs and exceptions to qualified buyers. The sale agreement should then use the same asset IDs and categories. At completion, the handover pack should reconcile keys, manuals, certificates, registrations, inspections, maintenance, software access, spares, notices and the final physical condition. One schedule must survive from listing preparation through completion; recreating it at each stage invites contradiction.

• Remove excluded or unresolved plant claims from headlines, floor-area descriptions and facility lists.
• Use a controlled data room with access logs for certificates, technical drawings and sensitive identifiers.
• Attach the final included, excluded, third-party and making-good schedules to the sale agreement.
• Assign pre-completion operation, inspection, maintenance and breakdown responsibility while the factory continues running.
• Set cut-off readings, condition photographs, notice evidence and buyer acknowledgement for completion day.
• Carry open defects and post-completion work into a dated close-out schedule with security and access terms.

A clean factory sale is not one with no machinery. It is one where the property and every material plant item have a deliberate boundary, evidence status and handover result. Factory King can help owners prepare the industrial property and listing narrative, while legal, valuation, DOSH, engineering, tax and competent plant advisers confirm the asset and regulatory position. Separate first; market second.