Everything you need to know before signing a contract

Now I know many are quite intimidated with the stacks of papers put in front of you by your lawyers to complete a sales and purchase transaction. To make it simple for everyone, here are some questions to ask your lawyer for clarifications prior to the signing of the contract;

.▪ How long is the process for the entire transaction?

The standard time for a sale and purchase transaction is three (3) months, subjected to one (1) month extension with interests.

▪ What are the documentations/ information required for the sale and purchase of property?

The documents/information required are as follows:-

1. A copy of the original title of the property

2. A copy of the quit rent and assessment receipt of the property

3. A copy of the IC of both buyer and seller

4. Previous Sales and Purchase Agreement and Loan documents (if any)5. A copy of the tenancy agreement of the existing tenant (if any)

▪ When would the balance purchase price be released to me?

The balance purchase price of the property would be released to the vendor once it is released by the purchaser's financier or purchaser to the solicitor as stakeholder. However, the balance purchase price shall be released to the vendor within the 3 months period from the date of the sale and purchase agreement. Otherwise, the vendor shall have the right to change an interest on the purchaser for the delay caused by him.

▪ When should I pay for the down payment/initial deposits towards the property?

The down payment or initial deposits shall be paid to the vendor at the time of the signing of the sale and purchase agreement.

▪ How do I know whether there is any consent required for me to purchase/ sell the property?

The solicitor would conduct a land search to ascertain whether there is any restriction in interest for the vendor to transfer the property. In the event consent is required, the vendor would be required to apply for consent to transfer or consent to charge to the relevant authorities.

▪ How long does it take for me to apply for consent to transfer the property?

Consent application normally takes around 3 to 6 months to be completed, depending on the speed of the relevant authorities.

▪ When should I pay for the differential sum between the balance purchase price and the bank loan for the property?

The differential sum of the property shall be paid to the solicitor as stakeholder before the solicitor proceed to advice the bank for the release of redemption sum to discharge the property.

▪ When would I get the key/ vacant possession of the property?

The vacant possession of the property shall be passed to the Purchaser once the balance purchase price has been paid to the Vendor.

▪ Should I inspect the property before entering into a sale and purchase agreement?

Yes. More often than not, the Purchaser would be advised to inspect the property before entering into a sale and purchase agreement as the property would be sold in an “as is where is” basis, meaning that the state and condition as of the date of the sale and purchase agreement. Once this has been agreed, the vendor has no obligation to fix any defects or change the state of the property unless it is otherwise agreed by both parties.

▪ What is the process for the sale and purchase of a property without title?

The process of a sale and purchase of a property without title involves the developer. A letter of confirmation is required to ascertain the details of the property. The property would then be assigned to the new purchaser by way of a deed of assignment together with a notice of such assignment served to the developer. The entire process takes 3 months to be completed.

Armed with the above mentioned information, you may to ask your lawyer to prepare your sales contract, which is usually called Sales and Purchase Agreement (SPA) in Malaysian legal terms. A reminder to all, prior to signing any agreement, do not hesitate to ask your lawyer to explain clauses in the content of the agreement. I shall be writing more of this in my next blog posting.

Till then, I wish everyone a great weekend!

JulietC

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