This answer is written by AI. The information provided in this response is intended for general informational purposes only and should not be considered as legal advice. Do not rely solely on the information provided in this response for any legal decisions. Consult with a qualified legal professional before making any decisions.

What Is the Repossession Procedure Under the Hire Purchase Act 1967?

Question from horseman, What Is the Repossession Procedure Under the Hire Purchase Act 1967?

Answer from AI:

The Hire Purchase Act 1967 is a piece of legislation in Malaysia that governs the hire purchase agreements. Repossession is a legal process where the owner (financier) takes back the goods from the hirer due to non-payment or breach of the hire purchase agreement. Here is a general outline of the procedure for repossessions under this Act:

Notice of Repossession

  • Two-Week Notice: Before repossessing the goods, the owner must serve a written notice to the hirer after the hirer has defaulted on payment. The hirer is given a minimum of 21 days to pay the overdue installments.
  • Form 16: The notice must be in the form prescribed by the Act, which is Form 16. It should state the amount due and the intention to repossess if the amount is not paid within the stipulated time.

Repossession Process

  • If the hirer fails to pay the overdue amount within the time given, the owner may proceed with repossession.
  • The owner must not use force or breach the peace during the repossession process.
  • After repossession, the owner must serve a notice on the hirer, specifying the date of repossession and the estimated value of the goods.


  • The hirer has a right to redeem the goods by paying all the overdue installments and any expenses incurred by the owner in repossessing the goods.
  • If the hirer does not redeem the goods within 21 days after the repossession, the owner may sell the goods.
  • The owner must notify the hirer of the intention to sell, and the hirer has the right to request that the goods be sold by public auction.

Legal Consequences and Rights

  • The hirer has the right to challenge the repossession if it was done without following the proper legal procedure.
  • If the goods are wrongfully repossessed, the hirer may be entitled to compensation.
  • Relevant cases, such as Ong Ah Chuan v. Arab-Malaysian Finance Bhd [1981] 1 MLJ 45, have set precedents on how the courts interpret the provisions of the Hire Purchase Act 1967 regarding repossession.

Seeking Legal Advice

It is important for both hirers and owners to understand their rights and obligations under the Hire Purchase Act 1967. If you are involved in a hire purchase agreement and facing repossession, or if you are an owner seeking to repossess goods, it is advisable to consult with a legal professional for personalized advice. They can provide guidance on the specific steps to take and help ensure that the process is carried out lawfully.

For more information on the Hire Purchase Act 1967, you can refer to the full text of the Act provided by the Companies Commission of Malaysia (SSM).

Note: The information provided here is a general guideline and should not be taken as specific legal advice. Legal procedures can vary based on individual circumstances and local jurisdiction. Always consult with a legal professional for advice on your particular situation.

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