Preliminary Agreement For Sale And Purchase for Malaysia

Preliminary Agreement For Sale And Purchase Template for Malaysia

A Preliminary Agreement for Sale and Purchase is a crucial initial document in Malaysian property transactions that establishes the fundamental terms and conditions between a vendor and purchaser before executing the final Sale and Purchase Agreement. This document, governed by Malaysian law including the National Land Code 1965 and Contracts Act 1950, outlines key aspects such as property details, purchase price, payment terms, and conditions precedent. It serves as a binding agreement that protects both parties' interests during the interim period while due diligence, financing arrangements, and other preliminary matters are being completed.

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What is a Preliminary Agreement For Sale And Purchase?

The Preliminary Agreement for Sale and Purchase is a fundamental document used in Malaysian property transactions as an initial binding agreement between parties. It is typically employed when parties have reached basic terms of agreement but require time for due diligence, financing arrangements, or other preliminary matters before executing the final Sale and Purchase Agreement. This document is crucial in Malaysian real estate practice as it provides legal protection for both parties during the interim period, setting out essential terms such as property details, purchase price, payment schedule, and conditions precedent. The agreement must comply with Malaysian legislation including the National Land Code 1965, Contracts Act 1950, and where applicable, the Housing Development (Control and Licensing) Act 1966. It serves as a stepping stone to the final transaction while allowing parties to address any potential issues or requirements before full commitment.

What sections should be included in a Preliminary Agreement For Sale And Purchase?

1. Parties: Identification and details of the Vendor and Purchaser, including full names, identification numbers, and addresses

2. Background: Context of the transaction, including brief description of the property and parties' intention to enter into a sale and purchase transaction

3. Definitions: Definitions of key terms used throughout the agreement

4. Property Details: Comprehensive description of the property including title details, lot number, built-up area, and address

5. Purchase Price: Agreed purchase price and payment terms including deposit amount and payment schedule

6. Conditions Precedent: Conditions that must be fulfilled before proceeding to the final Sale and Purchase Agreement

7. Time Period: Duration for signing the final Sale and Purchase Agreement and completing conditions precedent

8. Deposit and Stakeholder Terms: Details of the deposit payment and stakeholder arrangements

9. Representations and Warranties: Basic warranties from both parties regarding their capacity to enter into the agreement and property ownership

10. Termination: Circumstances under which the agreement can be terminated and consequences of termination

11. Governing Law: Confirmation that the agreement is governed by Malaysian law

12. Execution: Signature blocks and execution formalities

What sections are optional to include in a Preliminary Agreement For Sale And Purchase?

1. Due Diligence: Terms for conducting property and title investigations, used when the purchaser requires a due diligence period

2. Bank Financing: Terms relating to the purchaser's financing arrangements, included when bank financing is required

3. Strata Title Terms: Specific provisions for strata properties, included when the property is an apartment or condominium

4. Vacant Possession: Terms regarding delivery of vacant possession, included when the property is currently occupied

5. GST/Tax Provisions: Special tax considerations, included when applicable to the transaction

6. Third Party Consent: Requirements for obtaining third party approvals, included when such approvals are needed

7. Property Management: Terms regarding maintenance fees and sinking fund for strata properties

8. Foreign Investment: Additional requirements if the purchaser is a foreign investor

What schedules should be included in a Preliminary Agreement For Sale And Purchase?

1. Schedule 1 - Property Details: Detailed property information including exact measurements, boundaries, and title particulars

2. Schedule 2 - Payment Schedule: Detailed breakdown of payment terms and timeline

3. Schedule 3 - Property Condition: Current condition of the property and list of included fixtures and fittings

4. Schedule 4 - Required Documents: List of documents to be provided by each party

5. Appendix A - Copy of Title: Copy of land title or strata title

6. Appendix B - Property Plans: Floor plans, location plans, or other relevant property drawings

7. Appendix C - Special Conditions: Any special conditions agreed between the parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Genie AI

Document Type

Sale Agreement

Cost

Free to use
Relevant Industries

Real Estate

Residential Property

Commercial Property

Industrial Property

Property Development

Legal Services

Banking and Finance

Construction

Property Investment

Relevant Teams

Legal

Real Estate

Property Management

Business Development

Commercial

Compliance

Finance

Sales

Investment

Operations

Relevant Roles

Legal Counsel

Property Lawyer

Real Estate Agent

Property Developer

Contract Manager

Property Manager

Conveyancing Lawyer

Legal Executive

Company Secretary

Commercial Director

Real Estate Manager

Business Development Manager

Investment Manager

Property Consultant

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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