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.
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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