Essential Terms In A Sale And Purchase Agreement For Property Purchase In Malaysia

Essential Terms In A Sale And Purchase Agreement For Property Purchase In Malaysia

In real estate, a Sale and Purchase Agreement is a binding contract between a purchaser and a seller that outlines the details of a home sale transaction. Essential terms in a sale and purchase agreement for property purchase in Malaysia which are agreed by the purchaser and the seller will be inserted in the agreement. Negotiations may go back and forth between the purchaser and the seller before both parties are satisfied with all the terms stated in the sale and purchase agreement. Once both parties are in agreement and have signed the sale and purchase agreement, the sale and purchase agreement is legally binding and become an enforceable contract.

Every home transaction is unique and different and not all the sale and purchase agreement will look identical.

There are several essential and important terms that must be included in every sale and purchase agreement.

1. The Seller’s information

• This include the full name and the NRIC number/passport number (whichever is applicable)

2. The Purchaser’s information

• This include the full name and the NRIC number/passport number (whichever is applicable)

3. The Property’s details

• The full details of the Property include the postal address and the title details as well as the land size;
• It is paramount to state that whether the Property is freehold or leasehold;
• The detail of the financial institution or bank which the Property is charged to is also required;

4. The Purchase Price of the Property and manner of payment

• Generally, 10% of the Purchase Price shall be paid to the seller upon signing of the sale and purchase agreement as the Deposit;
• The 90% of the Purchase Price will be paid by the purchaser or the purchase’s financier within 3 months from the date of the sale of purchase agreement or the date when the sale and purchase agreement becomes unconditional;

5. Condition precedent of the sale

• It is a contingencies or condition must be met by the relevant party within a reasonable time before the sale and purchase agreement become unconditional;
• It is crucial as it would affect the whole sale.

6. The Contractual Obligations of Each Party

• The seller shall use his best endeavour to assist the purchaser or the purchaser’ financier to complete the sale;
• The purchaser shall cause his financier to release all the purchase price to the seller within the said 3 months.

7. Fitting and Fixture

• If there is any prior agreement made between the purchaser and the seller in respect of the loose item/furniture/fixture in the Property, it is highly advisable to include the same in the sale and purchase agreement to avoid possible dispute.

8. Vacant possession or Legal possession

• The delivery of vacant/legal possession depends on the payment of the full purchase price as well as the Agreed Apportionment;

9. General term to cater situations when the sale cannot be completed, or the Property cannot be transferred to the Purchaser

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