Sale and Purchase Agreement
In Malaysia, the purchase and sale agreement (also known as the Sale and Purchase Agreement or SPA) is a legally binding document that outlines the terms and conditions of a property transaction between a buyer and a seller. Here are the typical procedures involved in signing a purchase and sale agreement in Malaysia:
- Offer and Acceptance: The process usually begins with the buyer making an offer to purchase the property. Once the seller accepts the offer, both parties proceed to negotiate the terms of the agreement.
- Drafting the Agreement: Typically, the seller’s lawyer or a real estate agent prepares the initial draft of the Sale and Purchase Agreement. The agreement should include details such as the purchase price, property description, payment terms, conditions of sale, and any other relevant terms agreed upon by both parties.
- Review by Parties: Both the buyer and the seller should carefully review the terms and conditions of the agreement. It’s common practice for each party to seek legal advice to ensure that their rights and interests are protected.
- Signing of the Agreement: Once both parties are satisfied with the terms, they sign the agreement. Each party should sign multiple copies of the agreement, with each party retaining at least one original copy for their records.
- Payment of Deposit: Upon signing the agreement, the buyer is typically required to pay a deposit, which is usually a percentage of the purchase price. The deposit is held in trust by the seller’s real estate agent or lawyer until the completion of the sale.
- Execution and Stamping of Agreement: The signed agreement needs to be stamped by the Stamp Office of the Inland Revenue Board of Malaysia within 30 days from the date of execution. Stamp duty is payable based on the purchase price of the property and is a legal requirement.
- Completion of Sale: The completion date, which is specified in the agreement, marks the finalization of the sale. On this date, the buyer is required to settle the remaining balance of the purchase price, and the seller is obligated to transfer the property ownership to the buyer.
- Transfer of Ownership: After the full payment has been made, the seller’s lawyer will prepare the necessary documents for the transfer of ownership. These documents include the transfer deed and other relevant forms, which are submitted to the Land Office for registration.
- Registration of Transfer: The Land Office will process the transfer of ownership and update the land title to reflect the buyer’s name as the new owner of the property.
- Handover of Keys: Once the transfer of ownership is completed, the seller hands over the keys and possession of the property to the buyer, marking the conclusion of the sale transaction.
It’s important for both buyers and sellers to engage reputable lawyers or real estate agents experienced in property transactions to ensure a smooth and legally sound process. Additionally, it’s advisable for both parties to understand their rights and obligations under the Sale and Purchase Agreement before signing.
Memorandum of Transfer
In Malaysia, the “MOT” refers to the Memorandum of Transfer, and the “Transfer form” typically refers to Form 14A, which is used for the transfer of ownership of property. These documents are essential in the process of transferring property ownership from a seller to a buyer.
Here’s what each of these documents entails:
- Memorandum of Transfer (MOT):
- The Memorandum of Transfer is a legal document used to officially transfer ownership of a property from the seller to the buyer.
- It contains details such as the names and identification particulars of the seller and buyer, the description of the property being transferred, the purchase price, and any other relevant terms and conditions of the sale.
- The MOT is typically prepared by the seller’s lawyer and signed by both the seller and the buyer. It is then submitted to the Land Office for registration.
- Form 14A (Transfer Form):
- Form 14A, also known as the “Application for Transfer of Ownership,” is a standard form issued by the Land Office in Malaysia.
- This form is used to apply for the transfer of ownership of land or property from one party to another.
- The form requires details such as the particulars of the seller and buyer, the description of the property, the sale consideration, and any encumbrances or liabilities affecting the property.
- Both the seller and buyer must sign the Form 14A in the presence of a witness, usually a lawyer or a commissioner for oaths.
- Once completed and signed, the Form 14A is submitted along with other required documents to the Land Office for processing and registration of the transfer of ownership.
The Memorandum of Transfer and Form 14A are crucial documents in the property transfer process in Malaysia. They facilitate the legal transfer of ownership and ensure that the transaction is properly recorded with the relevant authorities. It’s important for both parties involved in the property transaction to ensure that these documents are accurately completed and submitted to the Land Office in a timely manner to avoid any delays or complications in the transfer process.