SALE OF RESIDENTIAL PROPERTY BY A by stakeholders until expiry of

DEVELOPER DLP
● For DLP → 2.5% is released after the first 8
INTRODUCTION
months of the purchaser having vacant possession
● Housing Development Act (HDA) 1966 and
and 2.5% is further released after the expiry of
Housing Developer’s (Control and Licensing)
24 months
Amendment Regulations (HDR) 2002 provide a
● Developers cannot charge booking fees or earnest
standard SPA under schedule G & I for property
deposit however this prohibition further extends
with land and buildings
to stakeholders -cannot collect any further
● Schedule H & J is for multi storey properties
payments except provided for in the SPA (Reg
● The format of SPA cannot be changed by either
11(2) HDR)
the developer or purchaser
● Any variations made to these statutory
PROCEDURE
agreements are declared void (Syarikat Chang
Cheng)
● Things to consider when purchasing under HDA
● These two Acts only apply to residential
○ Whether individual title or master title
properties purchased directly from a
○ With and without encumbrance
developer
○ Cash buyer or loan
○ Does not involve subsale ( Governed by
(bank/government/insurance)
Contracts Act)
○ Purchaser is Malaysian or citizen
○ If sub-sale happens before handing over the
● Property with IDT and without encumbrances
vacant possession or during the defect
○ Developer Solicitor (DS) will prepare
liability period (DLP) then the purchaser can
SPA
enjoy the same privilege as first purchaser
○ Purchaser will execute SPA and DMC
● Reg 11(2) HDR → developer is not allowed to
(Deed of Mutual Covenant)
collect any payment that is not within SPA
○ PS will prepare MOT and CKHT forms
● Reg 11(4) HDR → Purchaser solicitor is entitled
● Property under Master title and unencumbered
for copies of SPA provided than they are returned
○ DS will prepare SPA
within 14 days if not executed
○ PS will execute SPA and DMC and
CKHT
DIFFERENCE BETWEEN PRIVATE SALE &
● Property with title but charged to financial
HDA SALE
institution
Private Sale HDA ○ DS has to do discharge of charge upon
the balance purchase price from the
Contract subject to T&C set by statute
negotiations between
purchaser
parties ● Procedure below can be used for both Developers
and Subsales (only difference is developer will be
T&C not governed by Format of contract given in governed by HDA)
statute Schedule

Strict adherence and cannot amend PROCEDURE OF SALE

1. DS will prepare SPA and DMC with particulars
Progress payment paid according
of
to Schedule

5% of final purchase price retained

 a. Dev name, address, licence no 2. P Bank Solicitors (PBS) will write to the P
details of property required under requesting
Schedule G a. Original SPA
b. Sch 1: layout plan of project b. Copy of IC
c. Sch 2: Approved building plan c. Forward the bills for registration of
d. Sch 3: Schedule payment of charge
purchase price 3. PBS will also write to PS (letter of inquiry)
e. Sch 4: building description informing them of the loan approval and seek
2. Developer will send 5 sets of SPA for the PS to confirmation that: (# Letter of Enquiry)
fill in the details of the purchaser (name, IC, a. MOT has been executed by both
address, etc.) and execute the SPA Developer and Purchaser
3. PS will vet the SPA and write to the Purchaser b. MOT has been presented for
requesting adjudication
a. His IC c. Whether P had lodged any private
b. Income tax no & address of branch caveat
office 4. PBS will also require an undertaking from PS to
c. 10% deposit to execute the SPA forward them
d. Forward a copy of his bill for fees a. A valid and registrable MOT in favour
4. PS will make 1st title search and company of the P
winding up search (on the developer) b. Quit rent and assessment receipt for the
5. PS will prepare 2 MOTs, 5 sets of stamping current year
proformas, CKHT forms (if purchaser c. Withdrawal of private caveat from the
requested), and entry (Form 19F) and removal P
(Form 19G) of caveats (Part 19 NLC). d. Any other documents necessary to
6. Purchaser then executes all the documents and register the transfer free from
pays 10% purchase price and solicitors bill encumbrance
7. PS will send the executed documents and 10% 5. PBS will also write to the Developer enquiring
sum to the developer a. Whether differential sum has been
8. Developer will only execute MOT upon settled (Difference between purchase
confirmation that the Purchaser’s bank will pay price and the amount of loan obtained
the balance purchase price of the house as per by the Purchaser)
the schedule b. Name and address of bank charged by
9. PS stamps the SPA and gives each party a set vendor
10. PS prepares private caveat and lodges at the land c. Forward from the chargee bank
office pending completion of the sale and (vendor bank) a redemption statement
purchase cum letter of undertaking to deliver
11. Purchaser has normally 3 months from the;
execution of the SPA to finalise his loan i. Original title of deed
ii. Duplicate registered charge (original in
PROCEDURE FOR LOAN land office)
iii. Duly executed discharge of charge
iv. Refund redemption sum in the event the
1. Upon approval of P’s loan → P Bank will send
discharge of charge cannot be registered
him Letter of Offer or Facility Agreement with
instruction to meet their solicitors
6. PS upon the receipt of the letter will send 12. Letter of undertaking from the developer is
MOT for adjudication and reply to the addressed directly to the P Bank
PBank Solicitor that 13. The PBank solicitor will then forward the
a. MOT has been duly executed by V and same to the PBank which will then release
P redemption sum to its solicitors who will
b. MOT has been presented for then forward it to the Developer for their
adjudication transmission to the chargee bank to obtain
c. Shall forward the valid and registrable a. Stamped discharge of charge and
MOT in favour of the Purchaser details of the chargee bank power of
d. Shall forward current year quit rent and attorney
assessment receipts upon receipt from b. Registration fee for discharge of charge
VS c. Duplicate registered charge
e. Any other necessary documents d. Original IDT
7. The Developer upon receipt from the P e. Copy of current quit rent and
Bank solicitor will write to chargee bank assessment receipt
informing them of the requirements and 14. The PS will forward to the PBank Solicitor
requesting the same a. Adjudicated MOT
8. The developer will also reply to the P Bank b. 2 copies of withdrawal of private
Solicitor stating that caveat lodged by the P
a. Differential sum has been fully settled c. Registration fees for withdrawal of the
by P private caveat
b. Provide address of chargee bank d. Registration fee for transfer
c. That they have written to the Chargee 15. The PBank solicitor will then present at the
bank requesting the redemption sum land office
cum Letter of undertaking a. Stamped discharge of charge of the
d. They shall forward the same upon chargee bank
receipt b. Withdrawal of private caveat
9. They shall forward the Vendor’s c. Stamped MOT and charge to PBank
undertaking addressed to the Purchaser to d. Current year’s quit rent and assessment
a. Refund the loan sum if MOT cannot be receipt
registered e. Memorandum & Articles of
b. Forward the duly executed stamped Association (constitution) of the
discharge of charge and the original Developer
IDT upon receipt from the chargee f. Company Resolutions approving the
bank sale Forms under s223 CA 2016
c. Forward the current quit rent and 16. After obtaining the original IDT from the
assessment receipt land office, PBank solicitor will send a
d. Forward the registration fee for the photocopy of title to PS showing that
discharge of charge (FORM 16N) purchaser is the registered owner and PBank
10. The chargee bank will then reply to the new chargee.
developer forwarding the required 17. PBank will pay progress payment to
documents Developer as per Schedule
11. Vendor will then forward them to the PBank
solicitors
18. Upon completion of the CCC (Certificate of
Practical Completion & Compliance) the
keys will be handed over to the PS.
[#CCC – Before this known as
CFO(Certificate of Fitness for Occupation)]

19. # Purchaser S to file Borang I to change the

name of owner at relevant municipal
council.