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This is my first post here, hope to get some quick help.
I am looking for a subsale apartment in JB area, got a reasonable offer, but owner wanted 10% payment before state consent approval (I am Singaporean).
I understand there may be risk if the state consent is rejected, and I may lost the 10%.
Is there a way I can protect myself? Is this 10% request before state consent a common practice here?
Appreciate for advices from anyone, thanks.
Hi sktours, welcome!
As a part of resale transactions (at least in my case) please note the following:
- It is a common practice to pay the 10% on signing of S&P, and this happens before the application for State Consent. (2% paid on Option to Purchase + 8% paid on S&P).
- The 10% at this stage stays with the sellers solicitor, and NOT paid to the seller yet.
- A good lawyer will put a clause in S&P that in case the State Consent is not obtained, you will get your money back, without deductions. If the the seller disagrees with this clause, I suggest you look for another dream home. I am sure you will find one.
More important is that you get a good lawyer and make sure that the sellers lawyer is reputed as well. Also make sure that the refund clause is in the OTP as well as the S&P. In fact you may skip the OTP and go straight to S&P with 10% payment, just to make the process faster, if the sellers and lawyers are agreeable.
Also, I agree with Newtown. Most likely you will get the State Consent unless:
- you have some criminal background
- the unit is a Bumi Unit
- or the State Authorities have reasons to believe that you have overpriced the property to get over the minimum RM 500k
Hope this helps and all the best in getting your dream home.
Cheers,
IR