Hi, I am selling an apartment in KL and I will be using the buyer's lawyer. The lawyer sent me the draft S&P and I used ChatGPT to check the agreement. I am not familiar with the whole process, so I am not sure if the concerns mentioned by ChatGPT are valid or not.


1. Financial Arrangements & Payment Timing (Clause 4.1 - 4.5)
Current Clause Issues:
• 21 days to pay Balance Deposit after approval from authorities is a long time, causing unnecessary delays.
• Purchaser can get an automatic 1-month extension to settle the Balance Purchase Price, with only an 8% per annum interest.
• If the Vendor delays providing necessary documents (e.g., Discharge Documents), an extension of time is granted to the Purchaser(s) without interest.
Suggested Amendments:
1. Shorten the time frame for paying the Balance Deposit: Reduce from 21 days to 14 days to avoid unnecessary delays.
2. Increase Late Payment Interest: Change from 8% to 10% per annum for both Balance Deposit and Balance Purchase Price.
3. Limit Automatic Extension: Instead of automatic 1-month extension for Balance Purchase Price, make it conditional on Vendor’s written approval.
4. Clarify Delays from Vendor’s Side: If Vendor delays providing necessary documents, the Buyer’s Completion Period should not be extended without interest.
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2. Vendor’s Default (Clause 9.1)
Current Clause:
• If the Vendor fails to complete the sale, the Buyer can either:
1. Claim double the deposit (RM35,500 x 2 = RM71,000), or
2. Pursue specific performance and claim all legal costs from the Vendor.
Potential Risk:
• Double deposit penalty is too high for the Vendor.
• If unexpected title or bank issues arise, you could be legally forced to complete the sale and cover all the buyer’s legal costs.
Suggested Amendments:
1. Reduce Liquidated Damages: Change double deposit to refund of Deposit + a fixed RM10,000 penalty.
2. Add Protection Clause: In case of unforeseen issues (e.g., bank delay), allow the seller more time before being penalized.
________________________________________
3. Termination Clauses & Buyer Default (Clause 8.1 & Clause 10.1)
Current Clause:
• If buyer fails to pay the Balance Purchase Price, seller keeps the deposit (RM35,500.00) and refunds other amounts within 14 days.
• If the buyer fails to register the property, the contract is terminated, and the seller must refund all money within 14 days. If the seller delays, they pay 8% annual interest to the buyer.
Potential Issues for the Vendor:
1. Risk if Buyer Defaults
o Buyer can default but only lose the Deposit (RM35,500).
o You may have to initiate legal action to remove them if they have already moved in.
2. Short refund period for non-registration of property title
o If transfer is not registered, you must refund all payments within 14 days.
o Any delay requires 8% interest payment to Buyer.
Suggested Amendments:
• Increase Buyer’s Penalty: If the Buyer fails to pay the full purchase price, a penalty of 10% of the full purchase price should be imposed on the Buyer, rather than just losing the deposit.
• Extend the refund timeline (Clause 10.1): Change refund from 14 days to 30 days to allow flexibility in case of administrative delays

I suggest appointing your lawyer to read through the agreement and to advise you on all the points of your concern and to safeguard your interest as the vendor.

Even with your appointed lawyer, the purchaser's lawyer (myself as buyer) may not agree to all the points of your concern.

Finally, be prepared to have the agreement aborted if both party cannot come to an agreement. Deposit paid have to refunded in full without interest to the buyer.

This post has been edited by mini orchard: Mar 16 2025, 12:25 PM

First of all...
Why the heck would you be using buyers lawyer???

You know right, if anything happens... The lawyer would backed with the buyer first....

So first thing you need to do is appoint your own lawyer first....

never ever use chatgpt for your legal matters. Chatgpt may be wrong and it may not be up-to-date.

also avoid using the buyer's lawyer if possible. There is already a conflict of interest, when there is a dispute between two parties, how do you imagine the same lawyer can represent both side's best interest? Unless you save alot of legal fees and understand the risks involved

I will only refer to the clauses mentioned in your spa, won't comment on those mentioned by AI. And just share from my last two transactions as vendor, from what I still can recall, for your reference only

1) 21 days to pay balance deposit is fair enough. Last time I and buyer sign SPA and all documents required by solicitor on the spot, and solicitor pass me the banker cheque for bd. As vendor, I also need a lot of time to gather those receipts, las time I spent two weeks to dig out copy of title from loan lawyer, as they did not send it to me 9 years ago.
Extension of 1 mths and 8% interest is fair enough also, if the delay is due to buyer.

2) Don't have these conditions. My clause is very standard. No compensation for his legal fee. If I default, he can either choose for specific performance or cancel deal and get back full refund and I must return it within 14 days or liable for 8%.

3) standard. If buyer default, I keep the 10% and return other amount receive from him within 14 days. The second point here, I would thinks it is " non registration" event, mean both buyer seller have complied but the title still can't be transferred to buyer name due to unforseen circumstances, so I must return whatever amount receive from buyer within 14 days.

My buyer was very sincere, and agent is very pro. So we both agree to proceed with standard SPA which is neutral to both sides. And I only paid 2.4k for ckht, if not I have to pay 12k for own lawyer.

you'd probably be midway into your transaction by now, but here's my comments:

1. Financial Arrangements & Payment Timing (Clause 4.1 - 4.5)
Current Clause Issues:
• 21 days to pay Balance Deposit after approval from authorities is a long time, causing unnecessary delays.
is buyer taking epf to pay balance deposit? if yes, then it's fair to include this. if no, then balance deposit is paid upon signing S&P

• Purchaser can get an automatic 1-month extension to settle the Balance Purchase Price, with only an 8% per annum interest.
standard

• If the Vendor delays providing necessary documents (e.g., Discharge Documents), an extension of time is granted to the Purchaser(s) without interest.
standard practice if vendor side take longer than 14 days to provide documents, auto extension will apply. eg. 14 days to give discharge documents + title, but vendor side took 30 days. so extend 16 days FOC for buyer


2. Vendor’s Default (Clause 9.1)
Current Clause:
• If the Vendor fails to complete the sale, the Buyer can either:
1. Claim double the deposit (RM35,500 x 2 = RM71,000), or
2. Pursue specific performance and claim all legal costs from the Vendor.

standard clause

3. Termination Clauses & Buyer Default (Clause 8.1 & Clause 10.1)
Current Clause:
• If buyer fails to pay the Balance Purchase Price, seller keeps the deposit (RM35,500.00) and refunds other amounts within 14 days.

standard clause

• If the buyer fails to register the property, the contract is terminated, and the seller must refund all money within 14 days. If the seller delays, they pay 8% annual interest to the buyer.
standard clause only if fails to register the property due to neither buyer/seller fault. 14 days and 8% also standard

This post has been edited by hanhanhan: Apr 13 2025, 08:06 PM

You’re right to flag these since a lot of the terms lean in the buyer’s favour, so it’s good you’re checking now.

1. Payment Timing:
21 days for the Balance Deposit is long. Asking for 14 is fair. The automatic 1-month extension should be conditional, not automatic. And 8% interest is low, pushing for 10% makes sense. Also, if you delay documents, buyer’s timeline should pause with interest, not for free.

2. Vendor Default:
Double deposit is standard but harsh. You can ask for deposit + RM10K instead. Add a clause for delays beyond your control, like bank or title issues, so you don’t get penalized unfairly.

3. Buyer Default & Refunds:
Only losing the deposit is soft. Suggest a 10% penalty on the full price if they back out. Also, 14 days to refund if transfer fails is tight, 30 days gives you breathing room for paperwork or bank delays.

The clause tat ts write is quite standard..no need so worry