When you are buying a new house, you are often told that you are signing a “standard” sale and purchase agreement (SPA). However, do you know what are the “standards” you should expect in a standard SPA for residential property?
1. In accordance to the Housing Development (Control & Licensing) Regulations 1989, there are two (2) standard format for the SPA for housing/residential accommodations only:
- Schedule G is for landed property; or
- Schedule H is for strata residential (ie: condominiums, apartments or flats).
2. The Schedule G or Schedule H are the so-called “standard SPA” you sign for the purchase of residential property, depending on the type of property you purchase.
However, these Schedules do not apply to commercial properties such as serviced apartments, strata offices, commercial lots, factories etc.
3. Any amendment to the terms and conditions under the standard SPA for housing properties requires the written consent of the Controller of Housing.
So, it is advisable for you to check whether the developer is adhering the standards before signing the SPA to protect your basic rights.
4. Date for Delivery:
- Schedule G: the effective date for the delivery of vacant possession is within 24 months from the date you sign the SPA.
- Schedule H: the effective date for the delivery of vacant possession is within 36 months from the date you sign the SPA.
For instance, if you are buying a landed property, the standard SPA should be Schedule G, hence the date you should receive the key for your new house is within 24 months after you sign the SPA. If your SPA says it takes 48 months for the delivery of a landed property, ask you developer to show you the approval from the Housing Controller to extend the delivery date, or else the developer has no right not to exceed the standard 24 months.
5. Damages for late delivery:
- Schedule G: liquidated damage of 10% per annum of the purchase price, calculated from the day of the stipulated delivery date to the actual delivery date of the property.
- Schedule H: There is 10% per annum liquidated damages for late delivery, same as above. On top of that, an additional claim for liquidated damages can be made for non-completion of the common facilities.
6. Payment:
- Schedule G & H: the purchase price consists of progressive payments, payable upon which the architect has certified that a particular stage of the work has been completed.
7. Defect Liability Period:
- Schedule G & H: Any construction defects in the property which become apparent within 24 months after you take vacant possession of the Property shall be repaired by the Developer for free within thirty (30) days, after you notify the Developer of the defects with written notice.
8. Grievances:
- You may file complaints with the Housing Controller for any dissatisfaction relating to the property purchased. A claim against the developer may also be filed with the “Tribunal for Homebuyer Claims” (“Housing Tribunal”) with a fee of RM10-00 only, without involving lawyers. Such claims with Housing Tribunal may include liquidated damages for late delivery, poor workmanship and non-compliance with building specifications. A claim with the Housing Tribunal is limited to claims of up to RM50,000. Alternatively, you may also file your claim in a civil court. However, if you already filed your claim with the Housing Tribunal, then the Tribunal will have exclusive jurisdiction to hear your claim, and you cannot bring the same matter to the civil court again.
