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How to buy a house in Malaysia?
After months and months of searching, Johan finally purchased his dream home in Seri Pajam Development. He was eager to settle into his dream home with his wife and two children.
However, Johan's joy quickly turned to sadness because he had no idea what a sale and purchase agreement was.
Do you want to be like Johan?
If you answered no, read on to learn more about the ten most important points you should know about your sales and purchase agreement.
What exactly is a Sale and Purchase Agreement?
The Sale and Purchase Agreement (also known as the S&P agreement) is a legally binding, written contract that contains the relevant terms and conditions of a transaction and outlines the details of a sale between a buyer and a seller. It is a compulsory buy house in Malaysia procedure. If any of the parties fail to meet their obligations, the termination and indemnity clause in the agreement will protect them.
The buyer can be anyone purchasing the property, whereas the seller can be the previous owner in the case of a sub-sale property or the developer if you're purchasing it brand new. However, if the property is acquired through inheritance or auction, a Sale and Purchase Agreement is usually not required.
The Sale and Purchase Agreement is a legally binding contract in which these conditions must be mutually agreed upon by both parties, hence the term "agreement." The Sale and Purchase Agreement is one of the most important documents most Malaysian homebuyers will ever sign, marking a significant milestone in their lives.
A Sale and Purchase Agreement is a written contract that represents both the seller and the buyer in a real estate transaction. This means that the buyer assumes all risks associated with the purchase of the property. Unless otherwise stated in the Sale and Purchase Agreement, the homebuyer cannot seek compensation from the seller for any flaws or repairs that occur after the Sale and Purchase Agreement is signed.
Certain elements are required for the agreement to be legally binding, while others are recommended to protect the parties' interests and clarify terms so that the transaction is as transparent and smooth as possible.
Why is it critical to understand the details of a Sale and Purchase Agreement before signing it?
Firstly, The Sale and Purchase Agreement safeguards the buyer (you) by preventing the seller from changing the terms and conditions to their advantage.
Secondly, please keep in mind that by signing your Sale and Purchase Agreement, you are effectively closing the deal. There will be no further negotiations, and both parties must adhere to the terms of the Sale and Purchase Agreement.
What are the ten key items in a Sale and Purchase Agreement?
Don't be intimidated by the massive pile of paperwork and legal jargon. Make sure you thoroughly read the Sale and Purchase Agreement before signing. In most cases, going over all of the fine print will save you a lot of trouble later on. Here are the 10 important points that you need to know about your Sales & Purchase Agreement :
Term | Explanation | Why do you need to know |
Conditions precedent | This is a provision that suspends the Sale and Purchase Agreement until certain specific events occur. | There are conditions that must be met before the Sale and Purchase Agreement can be considered effective. |
Extension Of The Completion Period | The seller anticipates receiving the full purchase price from the Buyer. The buyer would be given vacant possession of the property. | A one-month extension (subject to a certain percentage of interest) is typically granted to you to pay the balance of the money. |
Land title and tenure | The Sale and Purchase Agreement will also specify whether your property is freehold or leasehold. | It is critical to understand whether you are "leasing" the land from the government for a set period of time or are the sole owner of the land on which the property is built. |
Termination Clause | Due to an unforeseen change in circumstances, one party may choose to breach the agreement or terminate the Sale and Purchase Agreement from their end. | The party who has been harmed by the breach will also be able to sue the other party in court. |
Vacant possession | a term referring to the seller's responsibility to ensure that the property is fit for occupation. | It is significant because you will officially become the owner of the property once you have received the previously mentioned property title. |
Agreement to sell and buy | This indicates that the seller is willing to sell and the buyer is eager to purchase | Before you proceed to draw up and carry out a Sale and Purchase Agreement, you would normally pay an earnest deposit to express your interest in purchasing. |
Liquidated damages | The developer must compensate the homebuyer for the delay in receiving vacant possession. | Ensuring the rights of a buyer of a construction property |
Parties to the agreement | This refers to the parties who signed the Sale and Purchase Agreement, namely the seller and buyer. | You, as the party who purchases the property, is required to pay the agreed-upon purchase price. |
Defect liability period | A “warranty insurance” for newly developed properties | During the Defect liability period, the developer shall make any necessary free repairs to the property (DLP). |
Restrictive covenants | Limitations imposed on the seller by a state authority | To protect the rights of the buyer (you) |
Never sign a contract that you do not understand! This is a common saying in the legal and real estate industries. Hence, the Sale and Purchase Agreement is not just a document that signifies the ownership transfer of a property (along with several other documents). It also ensures your rights to the property as well.
It's time to choose a home from https://www.seripajam.com.my/onlinesale now that you have a better understanding of the sales and purchase agreement and procedure to buy a house. Good news, you can easily own a home with Seri Pajam Development with our easy home ownership package. Simply whatapps to ask our property buddy 012-7800 161 for more info.
Disclaimer: Information provided on this website is general in nature and does not constitute legal advice. Seri Pajam Development will endeavor to update the website as needed. However, information can change without notice and we do not guarantee the accuracy of the information on the website, including information provided by third parties, at any particular time. Whilst every effort has been made to ensure that the information provided is accurate, individuals must not rely on this information to make a legal decision. Before making any decision, we recommend you consult a legal professional to take into account your particular situation and individual needs.