FREQUENTLY ASKED QUESTIONS

The SPA is a legally binding document that outlines the full terms and conditions of a property transaction. It ensures that both the buyer and seller agree on key details such as purchase price, payment schedule, condition of the property, and the duration of the defect liability period. It protects the interests of both parties throughout the transaction.

This is the initial lump sum paid upfront when buying a property. In Malaysia, this is usually set at 10% of the property’s price. It’s often paid in stages – first as a 1 to 2% earnest deposit, followed by the remaining amount once the SPA is signed.

An earnest deposit is a small initial payment (usually 1% to 2% of the property’s price) submitted with a Letter of Offer. It signals the buyer’s serious intent to proceed with the purchase and is typically non-refundable if the buyer backs out without valid reason.

The CCC is a document confirming that a newly built property has met all construction and safety regulations and is fit for occupation. It is issued by a qualified professional, and receiving the CCC is an essential step before a buyer can take ownership.

This is a warranty period, typically lasting 12 to 24 months after property handover. During the DLP, the developer must repair any faults that is not caused by the owner or poor workmanship found in the property at no additional cost to the buyer.

The MOT is the official legal document that finalizes the transfer of ownership from the seller (or developer) to the buyer. It is one of the last steps in completing a property transaction and is necessary for the buyer to be legally recognized as the new owner.

Freehold properties give the owner indefinite rights over the land, while leasehold properties are only held for a specified period (often up to 99 years). Once a lease expires, ownership reverts to the state unless a renewal is granted.

When the lease of a leasehold property nears expiry, the owner can apply for a lease renewal from the State Authority. Approval depends on several factors and typically involves payment of a renewal premium

Malay Reserved Land refers to land that is legally protected and can only be owned, transferred, or leased by Malay Muslims. This restriction is part of laws aimed at preserving land ownership within the Malay community.

An Individual Title is issued for standalone landed properties like bungalows or terraced houses, giving the owner complete control over the land. A Strata Title is issued for high-rise or gated community developments, where individual ownership is granted for a unit, but common areas like lobbies and gyms are shared among all residents.

A Bumiputera Lot is a plot of land designated specifically for Bumiputera citizens (Malays and other indigenous groups). These lots are subject to restrictions and cannot be sold to non-Bumiputera without the goverment’s approval, which is often difficult to obtain.

Vacant Possession refers to the point at which the developer officially hands over the property to the buyer, signaling that the unit is completed and ready for occupancy. This also marks the start of the Defect Liability Period.

An accessory parcel is a legally owned property element – like a parking bay or storage unit – that is separate from the main residential unit. It is often included in high-rise or strata developments and listed in the title deed.

Common Property includes shared spaces and facilities such as gardens, swimming pools, lifts, and walkways in a condo or apartment complex. These areas are managed jointly by all unit owners through the Joint Management Body (JMB).

Also known as the Loan-to-Value (LTV) ratio, the MoF determines how much a bank is willing to lend you based on the property’s value. For first homes, the margin is usually up to 90% of the purchase price.

A guarantor is someone who legally agrees to repay your home loan if you’re unable to do so. This person must have a strong credit history and financial standing to be accepted by banks.

Both are mortgage life insurance plans that protect your home loan.

• MLTA (Mortgage Level Term Assurance) keeps the coverage amount constant and may offer cashback at the end of the term.
• MRTA (Mortgage Reducing Term Assurance) reduces the coverage amount over time in line with your loan balance. In both cases, the payout goes directly to the bank in the event of death or total disability.