A Short Sale Contract is utilized in situations where a property owner needs to sell their property for less than the outstanding mortgage amount, typically due to financial distress or market conditions. This document, governed by Malaysian law, facilitates the complex transaction between the property owner, the buyer, and the lending institution(s). It includes crucial elements such as purchase price, lender approval conditions, property transfer terms, and debt settlement arrangements. The contract must comply with various Malaysian regulations including the National Land Code 1965, Contracts Act 1950, and relevant banking regulations. It's particularly important in challenging real estate markets or when property owners face financial difficulties and need to avoid foreclosure. The document provides protection for all parties involved while ensuring the transaction meets legal requirements for property transfers in Malaysia.

1. Parties: Identification of all parties including seller, buyer, and primary lender

2. Background: Context of the short sale, including current property status and outstanding loan amount

3. Definitions: Key terms used throughout the agreement including Property, Purchase Price, Outstanding Loan Amount, and Completion Date

4. Subject Matter: Details of the property being sold and confirmation of the short sale arrangement

5. Purchase Price: Agreed purchase price and payment terms, explicitly stating it is below the outstanding loan amount

6. Lender's Approval: Conditions regarding lender's approval of the short sale and timeline for obtaining approval

7. Conditions Precedent: Prerequisites that must be met before the agreement becomes effective, including lender's written approval

8. Completion: Process and requirements for completing the sale, including timing and closing procedures

9. Seller's Representations and Warranties: Seller's declarations regarding property condition, authority to sell, and disclosure of material facts

10. Buyer's Representations and Warranties: Buyer's declarations regarding financial capacity and understanding of short sale conditions

11. Default and Termination: Circumstances under which the agreement may be terminated and consequences of default

12. Execution: Signing requirements and effective date of the agreement