- Azizi Zulhilmi
Buying a house is one of the biggest financial decisions most people will make. Once the Sale and Purchase Agreement (SPA) is signed, many buyers assume that the hard part is over. In reality, the legal process is only just beginning. Understanding what happens after signing the SPA can help you avoid delays, reduce stress, and ensure that your property transaction proceeds smoothly.
When the SPA is signed by both the buyer and the seller, it becomes a legally binding contract. This means that both parties are required to fulfil their obligations under the agreement. The buyer must pay the purchase price within the agreed timeline, while the seller must transfer ownership of the property and hand over vacant possession in accordance with the terms of the contract.
In a typical sub-sale transaction, the buyer pays a 10% deposit when signing the SPA. The remaining balance of the purchase price is usually payable within 90 days. In some cases, the agreement may allow an additional 30 days, although interest may be charged for the extended period. If the buyer fails to complete payment on time, the seller may have the right to terminate the SPA and forfeit the deposit. For this reason, buyers should ensure that their housing loan arrangements are progressing without delay.
Most buyers depend on bank financing to complete the purchase. After signing the SPA, the buyer will need to finalise the loan application, sign the loan documents, and ensure that the bank releases the loan funds within the stipulated period. Any delay in the loan process may affect the completion timeline and could lead to additional costs.
Some properties require approval from the relevant authorities before the transfer can be completed. This commonly applies to leasehold properties, properties with restrictions in title, and certain Bumiputera lots. Obtaining the necessary consent can take time, and this is one of the reasons why some property transactions take longer than expected.
Once the purchase price has been fully paid and all required approvals have been obtained, the ownership transfer documents will be submitted to the Land Office. The key document used for this purpose is the Memorandum of Transfer (MOT), also known as Form 14A. After the transfer is registered, the buyer becomes the official registered owner of the property.
The buyer will usually receive the keys and take possession of the property once the full purchase price has been paid and the seller has delivered vacant possession. In simple terms, vacant possession means that the property is handed over in the condition required under the SPA and is ready for the buyer to occupy.
If the property is a newly completed unit purchased directly from a developer, the buyer is generally entitled to a 24-month Defects Liability Period (DLP). During this period, the developer is responsible for repairing defects such as water leakage, cracks, and other workmanship issues. Buyers should inspect the property carefully and report any defects in writing as soon as possible.
One issue that concerns many buyers is what happens if their housing loan is not approved. If the SPA contains a clause stating that the purchase is subject to loan approval, the buyer may be allowed to terminate the agreement and recover the deposit. Without such a clause, the buyer may risk losing the deposit even if financing cannot be obtained.
The conveyancing process involves multiple legal documents, deadlines, and approvals. A conveyancing lawyer plays an important role in ensuring that the transaction is handled properly. This includes reviewing the SPA, conducting title searches, preparing transfer documents, liaising with banks and government authorities, and advising the client throughout the process.
Signing the SPA is a significant milestone, but it is only one part of the overall property transaction. The process continues until the purchase price is fully paid, ownership is registered, and the buyer receives vacant possession of the property. By understanding these steps, buyers can make informed decisions and avoid common problems.
Corporate and Conveyancing Division
This article is prepared and published by
Messrs. Ben Lee & Sharen
Advocates & Solicitors