Title.
No need, as long as correct information is reflected in the new SPA. 

If it doesn't state, then the vendor is at a disadvantage as the purchaser can take his own sweet time to apply for loans with several banks and slowly decide as to which to choose before signing the SPA. In the law of contracts, market practice does not apply to vary/amend/insert any terms of the letter of offer. What matters is what was agreed and executed upon by both parties.

What needs to be determined is if the letter of offer is such that it forms a binding contract between the parties.

Two scenarios:

1) If the purchaser has paid 2% deposit to the vendor, then there is a binding contract as consideration (via the 2%) has moved from the purchaser. The letter of offer is a binding contract and parties are bound by its terms. If the vendor does not stipulate a fixed timeframe for the purchaser to finalise and execute a SPA, it can be inferred that the time given is indefinite. As scary as it may sound, in reality, it would not drag too long as surely the purchaser would want to settle in his new home as well.

2) If the purchaser has not paid any deposit to the vendor but merely executes a letter of offer, then it can be argued that there is no binding contract as no consideration of any kind moved from the purchaser to the vendor. All the purchaser did was offer to purchase, and the vendor accepted, but nothing was given to the vendor to 'bind' the vendor to honour that acceptance of the purchaser's offer.

In  scenario (2), the vendor can unilaterally terminate the letter of offer. However, it would be prudent to first give the purchaser a timeframe (even if the letter of offer does not stipulate one) - perhaps a letter from the vendor's solicitor to the purchaser (or his solicitor), giving him a further 7 days to prepare and send a draft SPA to the vendor's solicitors, failing which the letter of offer would be terminated and be of no further effect.

Another situation where no consideration has passed is where the 2% was given to the purchaser's solicitors as stakeholder pending approval of purchaser's loan. If the loan is not approved, all of the 2% would be returned to the purchaser. Once again, I am of the opinion that this would fall under scenario (2), as no real consideration has passed to the vendor. If the vendor has the right to forfeit the 2%, then yes, there is some consideration. Otherwise, there is nothing to bind the vendor.

Consideration does not need to be adequate, it just need to be sufficient. In other words, it doesn't need to be 2%. Even if it is RM1.00 from the purchaser, which the vendor accepts, it is enough to form a binding contract, as sufficient consideration has moved from the purchaser to the vendor.

Hope the above helps. 

The most important thing is regarding the condition of the house. You need to reflect the rental in the SPA and the purc must agree that the house is sold on an as-is-where-is basis at the time of the viewing and that the purc would be responsible to make good any defect to the house in the event the SPA is aborted for any reason whatsoever, AND another clause that you are no longer responsible for the condition of the house at the completion of the SPA. Clauses to that effect (it ought to be more detailed - your lawyer ought to know how to draft it) should protect your interest. So, your tenancy agreement is not that important - that would reflect more on the rental to be paid, etc. It is your SPA which has to be more encompassing to include all eventualities in the event the SPA is aborted (SPAs are only important and referred to when things go WRONG only,right?  )

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How much would depend from law firm to law firm. Some expensive, some cheap cheap. One thing for sure is that you must first consider the money paid for fees and outstanding rental (evem if it is double rental) as a bad debt. This is because in most cases, then they do leave the premises, you would not be able to trace them and to enforce the Court Order would cost even more for you in legal fees. So you spend good money chasing bad money.

So, do think it over properly before deciding if it is worth it to rent it to him. Has his loan been approved? That is an important factor as well. If his loan has been approved one stumbling block has been removed and the chances of the SPA to be completed would improve.

Yes, you can include new clauses in a supplementary agreement BUT your current SPA must first stipulate that parties can agree to include further additional clauses in the said supplementary agreement. I would recommend postponing the SPA for a few days (if the purc doesn't mind) and include all the terms in one go. Better and less hassle. If possible, try to do so, or else go for supp agreement.
Not only that, but do provide for the costs to dismantle or remove any fittings to be borne by him. Even renovation of structures - let's say he wants to break a wall to extend a room - what happens if (worst case scenario) - the SPA is aborted? I'm sure you would want him to basically reconstruct the wall and restore your house to its previous position. What if he paints the house with some colour which does not match your taste? If SPA aborted, would you have to bear the costs of re-painting the house with a colour of your choice? He ought to reimburse you for that. As such, do keep in mind the need for a clause to cover such scenarios.

Better still if you prohibit him from doing any major renovations at least until the first drawdown to redeem your existing loan is completed (am assuming that your prop is encumbered). That would be a safe timeframe. Once first drawdown is out, you can rest assured that the bank will thereafter release the balance purchase price (assuming that all other factors like stamping of the DOA/MOT has been done and perfected/registered).
   

Hi Jessy,

Yes, it is only needed when title is already out.

If it is still under Master Title, there's no reason to worry as the vendor can't do anything - title is still under the developer or proprietor's name [The proprietor in this case refers to the landowner who enters into a JV with the developer].
Here's the thing - it depends on the lawyer in question. There's no hard and fast rule. It depends on the honesty (or knowledge) of the lawyer and how much they have the best interests of their client at heart.

No, not at all. In some SPAs a clause is inserted whereby the vendor consents to the lodgement of a private caveat. However, even if the clause is not inserted, it is understood and is common practice that the purchaser has a caveatable interest once he pays the 10% downpayment upon execution of SPA.

jessy123:


Why are you paying for all this? It's supposed to be borne by vendor. It's the vendor's duty to obtain consent. 

My mistake.  Take my head off instead!