Have you ever considered purchasing your own property in Malaysia? Do you intend to purchase a new-under-construction house developed by developers? If YES, this article is meant for you.

In Malaysia, the main law that governs housing development is the Housing Development (Control and Licensing) Act 1966 (Act 118) (HDA 1966). This Act aims to protect the interest of people like you i.e., the homebuyers. However, it is important to note that HDA 1966 only governs housing development for residential unit and not for commercial unit. HDA 1966 is also applicable to both landed and strata property. The examples of landed property include terrace house, semi-d and bungalow and for strata property, it includes apartment and condominium.

In owning one of these homes, you will sign an instrument namely Sale and Purchase Agreement (SPA). For under-construction property, the purchasers and the developers will execute standard Schedule SPA. This means that the SPA clauses are fixed and cannot be tampered as it is a statutory agreement under the HDA 1966.    

We have four types of Schedule SPA namely SPA Schedule G, H, I and J under the HDA 1966. The purpose of the different types of Schedule SPA is as follows:-

1. Schedule G – for the sale and purchase of landed property under the ‘sell and build’ concept.
2. Schedule H – for the sale and purchase of strata property under the ‘sell and built concept’.
3. Schedule I – for the sale and purchase of landed property under ‘build then sell’ concept.
4. Schedule J – for the sale and purchase of strata property under the ‘sell and built concept’.

For ‘sell and build’ concept, the purchase of price of the property will be paid progressively by stages throughout the construction of the house until the completion. Meanwhile, for ‘build then sell’ concept, purchasers will pay 10% payment of purchase price on the date of signing SPA and the remaining 90% to be paid after the completion of the property.

By knowing the different types of SPA, you will be able to know the manner of payment of purchase price of the property. Hence, it is important for you as a potential homebuyer to know the type of SPA that you will sign. In our next article, we will share what are the important clauses of the Schedule SPA that you need to know before purchasing a property in Malaysia. We hope that this article will benefit you.

Article Disclaimer: The contents written above and/or in this website do not constitute a legal advice and should not be relied upon by any parties as such. Please reach out to us for further enquiries.

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