FACULTY OF BUILT ENVIRONMENT

Course Code & Title: ATGB2242 Principles of Malaysian Land Law

Exercise 9

Q1. Based on your understanding, interpret the term “Sale and Purchase Agreement
(SPA)”.

 Sale and Purchase Agreement (SPA) is a legal contract that obligates a buyer to buy and
a seller to sell a product or service
 Sale and Purchase Agreement (SPA) are found in all types of businesses but are most
often associated with real estate deals as a way of finalizing the interests of both parties
before closing the deal

Q2. Explain under what situation a seller of a housing unit must use the standard Sale and
Purchase Agreement (SPA) as a contract for the sale and purchase of a property.

 Seller must use standard SPA if the property is part of “housing development” as defined
under the Housing Development (Control and Licensing) Act 1966
 The construction of more than 4 units of housing accommodation including the
collection of monies for the purpose of erecting housing accommodation

Q3. In your opinion, what are the advantages of using a standard Sale and Purchase
Agreement (SPA)?

 Fair to both seller and buyer

 Safeguard the interest of house buyers against unscrupulous developers
 Easy to understand the terms and contract
 Standard SPA; save time and money
 Prevent the seller from dealing with the land subsequently to the prejudice of the
purchaser
 Give purchaser priority over other subsequent claim to the land

Q4. Explain the content of the following documents:

a) Memorandum of Transfer

 The Memorandum of Transfer (“MOT”) is the official transfer form submitted to the
land office to instruct them to transfer the property to the buyer
 This form is prescribed by legislation (The National Land Code 1965) and is used for all
property transfers in Malaysia
FACULTY OF BUILT ENVIRONMENT
Course Code & Title: ATGB2242 Principles of Malaysian Land Law

 The MOT must be signed together with the S&P as the S&P documents terms and
conditions of the sale (e.g. payment terms, vacant possession, default, etc.) while the
memorandum is an instrument of transfer to be submitted to the authorities

b) Facilities Agreement

 A facilities (loan) agreement is a contract between a borrower and a lender which

regulates the mutual promises made by each party
 Facilities (loan) agreements are documented via a compilation of the various mutual
promises made by the involved parties

c) Deed of Assignment

 When the vendor signs a SPA to sell his property, he is normally required to
simultaneously sign a Memorandum of Transfer (Form 14A) (“Transfer”), in a case of a
property with title, or a Deed of Assignment (“Assignment”), in a case of a property
without title
 The Transfer or Assignment is usually deposited with the Purchaser’s Solicitor as
stakeholder. Sometimes the Assignment is kept by the Vendor’s Solicitor as stakeholder
until the purchaser bank’s (“Purchaser’s Bank”) has given a written undertaking to the
Vendor to release the Loan to enable the Purchaser to complete the transaction

d) Power of Attorney

 Power of Attorney is a legal instrument where the donor (grantor of the power) gives the
donee power to act on certain matters specified in the power of attorney, on behalf of the
donor
 Can be limited or unlimited power

Q5.

The property price : RM 1,500,000

Housing loan from ABC Bank : RM 1,350,000
Sale & purchase agreement date : 1/8/2010
Schedule date of handover of vacant possession : 31/7/2012
Delivered vacant possession to purchaser : 16/12/2012

Answer the following according to the above scenario:

FACULTY OF BUILT ENVIRONMENT
Course Code & Title: ATGB2242 Principles of Malaysian Land Law

a) Calculate the amount of stamp duty for Memorandum of Transfer

Property Price: RM 1,500,000

The Stamp Duty is:
1% on the first RM 100,000 : RM 1,000
2% on RM 400,000 : RM 8,000
3% on RM 500,000 : RM 15,000
4% on RM 500,000 : RM 20,000
Total Stamp Duty : RM 44,000

b) Calculate the amount of stamp duty for loan document

Loan: RM 1,350,000
Ad valorem rate of RM 5 for every RM 1,000 or part thereof (or 0.5%)
The Stamp Duty is : 0.5% x RM1,350,000
: RM 6,750

End of Question Paper