SUBSALE

 Property with title (Individual/Strata)

 Property without title (Master Title)
WHAT WILL YOU LEARN?

01 02 03
DEFINITION PROPERTY PARTIES
What is Subsale? Property types Relevant Parties to the SPA

04 05 06
NATURE TIMELINE PROCESS
Different types of cases From A-Z Different stages of SPA
MEANING OF SUBSALE

1. It refers to subsequent sale of property by the Vendor (V) who originally

purchased the Property from housing Developer (Dev).
2. Subsequent sale by original Purchaser of a Property to another Purchaser (P)
(Subsequent Purchaser).
3. All purchases other than from Developers, all SPAs fall under the category of
Subsale.
4. The terms of subsales are NOT governed by any legislation other than the
Contracts Act.
5. The contracting parties therefore have freedom to negotiate on the terms of a
subsale based on a “willing seller willing buyer” basis.
6. The freedom of contract will apply not only to subsales but also purchases of
commercial or industrial properties from Developer - not governed by HDA.
7. Is it considered a Subsale when Developers sell completed residential property?
TYPES OF PROPERTY

RESIDENTIAL /
COMMERCIAL /
INDUSTRIAL

LANDED / INDIVIDUAL TITLE /

STRATA / STRATA TITLE /
VACANT LAND MASTER TITLE
RELEVANT PARTIES IN SPA

VENDOR (V) PURCHASER (P)

Owner of the Property. The one who intends to

Can be represented by a purchase the property.
Solicitor OR be Usually represented by a
unrepresented. Solicitor.

V’S SOLICITORS P’S SOLICITORS

Acting for the Vendor in Acting for the Purchaser in

SPA. SPA.
RELEVANT PARTIES IN SPA

V’S FINANCIER P’S FINANCIER

When the Property is still Loan buyer – When P

encumbered – V’s housing applied for housing loan to
loan not yet settled with part finance his/her
V’s Financier. purchase of the Property.

BRIDGING FINANCIER CAVEATOR

Developer’s financier. In The one who enters caveat

some Subsale cases, the on the property. Record of
record of an existing charge caveat will appear in land
by the BF is still shown in search.
the land search.
RELEVANT PARTIES IN SPA

REGISTERED BENEFICIAL
PROPRIETOR OWNER

Term used in property Term used in property

with title - where the without title - where the
Vendor’s name has been vendor is the beneficial
duly registered in the title. owner of the Property.

TRANSFEROR / ASSIGNOR/
TRANSFEREE ASSIGNEE

Terms used in MOT. The Term used in DOA. The V as

V as transferor transfer all assignor assigns all his/her
his/her ownership in the right, title & interest in the
property to P as transferee. property to the P as assignee.
DIFFERENT TYPES OF SUBSALE CASES

FREEHOLD /
WITH TITLE / ENCUMBERED / LOAN BUYER / LEASEHOLD COMPANY /
WITHOUT TITLE FREE FROM ANY CASH BUYER (RESTRICTION IN INDIVIDUAL
ENCUMBRANCES INTEREST) / MALAY
RESERVE LAND /
LOW COST
PROPERTY
TIMELINE - SUBSALE

INITIAL STAGE
Get all the relevant
information & documents
from the parties, conduct
necessary searches.
D-DAY
Prepare documentation &
attend signing with client.
WORK IN PROGRESS
Stamping SPA & get all the
necessary letters, undertakings,
consent, etc. NEARING THE
END
ADMIN Release of Balance Purchase
MATTERS Price (BPP) & delivery of
Safekeeping & notify Vacant Possession (VP).
relevant authorities for
change of ownership.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

Request from your clients all the If you are acting for the P & V Review all documents that
relevant documents, eg. Copy of is represented by another you received. Ensure proof of
(1) Initial
OTP, IC, title, previous SPA & loan Solicitors, request V’s ownership intact/complete.
interview with
agreements, quit rent, assessment, documents from V’s Highlight issues to client.
client
maintenance, IWK, electricity, Solicitors.
water receipts.

Conduct all the necessary searches If both parties are represented, Searches prior to signing is a
(eg. Land search, you will liaise with the must. Before signing, you
bankruptcy/company search) & opposite counsel for approval must ensure that all concerns
(2) Drafting stage review the results. Draft SPA & get & finalisation of draft SPA. about the Property has been
approval from clients. resolved/discussed.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

Both sides (V&P) must agree with Take note on the time period It is also appropriate at this
the draft SPA before signing. agreed by parties to sign SPA stage to request the V to
as stated in the OTP (Offer to furnish evidence of his
Purchase). outstanding housing loan
with his financier (redemption
The party with better sum), esp where there is a
knowledge of the property possibility that the BPP is less
(usually the V’s Sols) may than the redemption sum.
prepare the 1st draft SPA.
(2) Drafting stage
However, in practice, the P’s
Sols may also prepare the 1st
draft SPA & forward the same
to V’s Sols for further
comments/approval. No
standard rule on this matter.
Both SPA solicitors should
discuss who will prepare the
draft SPA.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

Prepare relevant documents for The documentation will be Review search results prior to
signing: different depending on signing. If certain results or
• SPA whether the property has a confirmations are missing and
• MOT / DOA title or not. client nevertheless would like
• PC, WPC & SD (Optional) to proceed with signing, to
• CKHT Forms If V is unrepresented, the P’s obtain confirmations from
• Application Form for Consent Sols will also prepare the client that he/she is fully
to Transfer (depends on state); necessary documents to be aware of the facts.
(3) Drafting Stage • Invoice for legal fees signed by V, eg. V’s
• Other documents depend on undertaking to refund & V’s The MOT must comply with
each firm’s practise & the nature authorization letter for the provisions of Schedule 10
of each case. redemption statement. to the NLC. All deletions and
initialling should be in
accordance with the Schedule.
Attestation of signatures
should be in accordance with
Schedule 5.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

Before the P turns up at office to *V to bring along the A clear copy of IC is required
sign the documents, advice P to following docs: for registration of transfer at
bring along the following docs • original IC for the land office.
when he comes to execute the SPA: identification &
• original IC for identification verification *Refer slide no. 23 for
& verification; • if the V is not a natural additional documents
• if the P is not a natural person, person, eg. Company, to required from Vendor for
(3) Signing
eg. Company, to obtain obtain corporate docs such property free from any
(Encumbered
corporate docs such as as resolutions, forms 24, encumbrances.
Property)
resolutions, forms 24, 44, 49 & 44, 49 & MAA/
MAA/Constitution; Constitution;
• his payment for the Deposit to • Quit rent & assessment
V (10% of the PP – follows the receipts duly paid;
agreed terms in the SPA); • Payment for legal fees &
• payment for legal fees & disbursements.
disbursements.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

If acting for P: If both parties are represented, The payment of the deposit
Forward to V's sols: P will sign the SPA first in (or the balance of the deposit)
• SPA; presence of his Solicitors, then should be subject to the terms
• Deposit sum; forwarded to V’s Solicitors for of the SPA. If the SPA is
• MOT / DOA; V’s execution. subject to CP, the SPA should
• Information requested by V's sols. provide for payment to the V
only upon fulfillment of CP.
If acting for V: Once the P’s Sols receive back Pending fulfillment of CP, the
Return docs to P's sols duly executed the SPA documents, the P’s deposit should be held by
(4) After Signing by V and deal with Deposit Sum in
Sols shall proceed with the either of the sols as
the manner provided in the SPA.
stamping of the SPA. Cost of stakeholders for the V.
stamping SPA shall be borne
During conditional period (if any)
For both SPA sols: by P (nominal RM10 each Example of CP : The sale is
Take steps to fulfil Conditions copy). subject to V obtaining
Precedent (CP), eg. Consent etc. consent to transfer duly
approved by the State
Authority in favour of P.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

During completion period The P's PC should be lodged as The MOT should be submitted
If acting for P: soon as practicable once the for adjudication within the
• Lodge Private Caveat (PC) - SPA has been signed. However, time and in accordance with the
optional; if the SPA is subject to the terms stipulated in the SPA.
• Request V's sols to obtain condition precedent (CP) that Where the SPA is subject to
redemption statement addressed consent to transfer has to be CP, the MOT should be
to the P, or where P is applying obtained (ie the doc of title has submitted for adjudication only
for loan, the P's F; a restriction on transfer), then upon fulfillment of the CP to
(4) After Signing • Submit MOT/DOA for PC should be lodged only after avoid delayed registration fee
adjudication of stamp duty the submission of the payable on the MOT.
payable in accordance to the application for the consent to
terms of SPA; transfer. A conditional SPA will If the property is encumbered,
• As for RPGT, within 60 days of give rise to a caveatable interest the DOA (transfer) shall be
SPA date or unconditional date: only after it becomes dated and stamped on the same
Lodge CKHT forms (to ensure unconditional. date/after the DRR.
that P's or V's sols will make
payment of RPGT).
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

During completion period Ensure that V has paid the quit There should be a timeframe
If acting for V: rent & assessment receipts up for the fulfillment of the CP, ie
• Apply Consent to Transfer; to date. Both receipts are the date the SPA becomes
• Request redemption statement important for the application unconditional should be clearly
addressed to the P, or where P is of Consent to Transfer, set out. The SPA sols will also
applying for loan, the P's F; registration of transfer form & have to submit the relevant
• As for RPGT, within 60 days of advise release for Redemption application in time to comply
SPA date or unconditional date: Sum/Balance Purchase Price. with the terms of the SPA.
(4) After Signing
Lodge CKHT forms (to ensure Unless the failure to submit the
that P's or V's sols will make application is caused by the
payment of RPGT). other side, the failure to submit
the application will be a breach
of the terms of the SPA
entitling the other side to
terminate.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

Payment of redemption sum (RS). If P does not require a loan to A common problem during the
complete his purchase, the RS redemption stage is that of late
Delivery of discharge documents will be paid from the BPP. The delivery of the disch. docs (eg
(disch. docs) upon payment of RS. payment of the RS to the V's title, 16N, etc) by the V's
Financier should be made Financier after receipt of the
through the V's sols and not the RS. The SPA should provide
P's sols. that any delay by the V's
(5) Redemption Financier to deliver the disch.
Stage However, if P requires a loan to docs should be attributed to the
(Encumbered complete the purchase, then, V.
Property) the RS will be paid from the
loan sum unless it is Normally, P’s Financier
insufficient, in which case the V requires the MOT to be
will have to top up the adjudicated before rls of RS.
difference (shortfall). Once the The V’s Sols need to ensure that
V pays the shortfall, then the P's the disch. docs will be received
F will release the loan sum to A.S.A.P so as to avoid penalty
the V's F. for late registration of MOT.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

Discharge Documents The 16N/DRR will be *The V’s Sols to submit duly
prepared by the V’s Sols and stamped DRR together with
Property With Title forwarded to V’s Financier for the original Power of Attorney
1) Original Title execution upon payment of RS. (PA) at the HC to revoke the
2) Form 16N (Discharge of Charge) power previously granted by V
3) Duplicate Charge V’s Financier will sign the to the V’s Financier. Once
4) Original Loan Agreement 16N/DRR and return the same revoked, the V’s Sols to serve
(5) Redemption
5) Any other relevant docs duly executed together with DRR to Dev.
Stage
other original documents kept
(Encumbered
Property Without Title by V’s Financier to the V’s Sols. The P’s Sols to stamp the DOA
Property)
1) Deed of Receipt & Reassignment (transfer) with the same date
(DRR) V’s Sols need to proceed with with DRR/after & serve DOAt
2) All original documents (SPA & *stamping & then fwd the to Dev. The P’s Financier’s Sols
loan) from 1st original buyer until security docs to P’s Financier’s to stamp DOA (security) with
V; Sols for rls of balance loan sum the same date with DOA
3) Any other relevant docs (if loan buyer). (transfer)/after & serve DOAs
to Developer.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

Loan buyer: Presentation should be made No presentation is required in

The V’s Sols shall forward the disch. only after: the case of a property to which
docs to P’s Financier’s Sols while the individual title is yet to be
P’s Sols shall forward the MOT to P’s • All payments (eg issued. The practice is to treat
Financier’s Sols. The P’s Financier’s differential sum, the assignment (if it has been
Sols shall be the one to present 16N, redemption sum) have duly stamped for the amount of
MOT & Charge simultaneously at been made by the relevant the duly adjudicated stamp
(6) Presentation the land office and advise P’s parties; duty) as evidence of beneficial
for Registration Financier for final rls of loan sum (less • A thorough search has ownership which entitles the
(Property with redemption). been made at the land beneficial owner to the transfer
Title) office; of the individual title to his
Cash buyer: • All the NLC forms have name upon its issuance. The
The V’s Sols shall forward original been complied with. assignment (as a transfer)
title to P’s Sols upon payment of attracts stamp duty under
BPP. The P’s Sols shall present the Stamp Act. It should be dated
MOT at the land office upon receipt only after or simultaneously
of the original title. with the dating of the DRR.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

Loan Buyer: There is no requirement or Delivery of VP should be made

1. Present for registration; ruling that the parties have to simultaneously with or as soon
2. P’s Financier rls balance loan meet face-to-face on as practicable with the payment
(7) Completion sum/BPP to V’s Sols as completion date at a specific of the BPP to the V.
(Payment of stakeholder; place to facilitate completion,
Balance Purchase 3. Calculation of apportionment of unless parties agree to see each The P should have another
Price – BPP & outgoings btw V & P; other at the property for inspection of the property prior
delivery of Vacant 4. V’s Sols fwd keys to P’s Sols. inspection & completion. to release of the BPP to the V's
Possession - VP) sols. This is especially so where
the SPA includes fixture and
fittings.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

Cash Buyer: The P’s Sols need to present the Both SPA Solicitors need to
1. P’s Sols fwd BPP to V’s Sols as transfer for registration A.S.A.P ensure that there is no
stakeholder; upon receipt of the original title outstanding on the Property
2. Calculation of apportionment of from V’ Sols. If there is any such as electricity, water, quit
outgoings btw V & P; problem with the registration rent, assessment, IWK, etc
(7) Completion 3. V’s Sols fwd keys (VP) & original from V’s side, V should rectify before release of BPP and
(Payment of title; the same before releasing BPP delivery of VP. Hence, it is
Balance Purchase 4. Present for registration; to V. There should be a timeline important for both V & P to
Price – BPP & 5. V’s Sols shall rls the BPP in provided in the SPA for V’s agree on the calculation of
delivery of Vacant accordance to the terms of SPA. Sols to hold the BPP for a apportionment of outgoings so
Possession - VP) reasonable period of time as to avoid future claims. All
before it can be released to V, retention sums or the balance
eg. Within 14 days from release after payment should be
of original/discharge released only after receipt of
documents to P’s Sols. documentary evidence of
payment of outgoings.
PROCESS

EXPLANATORY NOTE
WHAT YOU NEED TO
WHAT TO DO? ON PRACTICAL &
KNOW?
LEGAL ISSUES

Filing of forms with local authority The original title, duly Both V and P to give notice to
under section 160(1) of the Local registered, shall be collected by the local authority on the
Government Act 1976. the same Solicitors who did the change of ownership (eg
presentation. Upon receipt of assessment - City Council).
Collection of original issue document the original title, the Failure to do so is an offence.
of title from the Land Registry. endorsement and memorials on
the title should be verified.
Safekeeping to relevant parties.
(8) Events after
Loan Buyer:
Completion
Original title shall be forwarded
to P’s Financier for safekeeping.
Purchaser will get a copy of title
for record.

Cash buyer:
Original title shall be forwarded
to P for safekeeping.
PROPERTY FREE FROM ANY ENCUMBRANCES

1. If the property is free from any encumbrances, e.g., the vendor purchased the
property for cash or he had fully settled his loan, the vendor needs to bring along
the original documents with him upon signing and hand them over to his
solicitors for safekeeping pending completion.
2. For property with a title, the vendor needs to hand over the original title to his
solicitors upon signing.
3. For property without a title, the vendor needs to hand over all the original SPA
and loan documents from the first buyer up to the vendor upon signing.
4. The SPA Solicitors shall deal with the original documents in accordance with the
terms of the SPA.
5. What happens if the original documents are missing?
“The world is full of doors through which we can
find a staggering array of opportunities – we just
have to be willing to open them.”
- Tina Seelig -
 THANK
YOU!
Does anyone have any questions?

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