Subsale SPA in Malaysia: 3+1 Month Completion, Differential Sum & Key Clauses
A subsale SPA in Malaysia has no statutory form, but market practice is consistent: a 10% deposit on signing, the balance within 3 months, and a further 1-month extension at a late-payment interest rate that is most often 8% a year. Because the terms are negotiated between the two lawyers, you can ask for changes before you sign. Here are the clauses that matter most to buyers.
Short answer
A subsale SPA in Malaysia has no statutory form: its terms are negotiated between the two lawyers and can be changed before you sign. Market practice is a 10% deposit on signing and the balance within 3 months, with a 1-month extension during which late interest runs daily on the unpaid sum: law firms quote 6%–10% a year, most commonly 8%. Where state consent is needed, the clock starts later.
Key numbers at a glance
| Deposit | 10% of the price (2%–3% on the offer, balance at the SPA) |
|---|---|
| Completion period | 3 months, plus a 1-month extension |
| Late interest | Commonly 8% a year (firms cite 6%–10%), calculated daily |
| Clock starts | The SPA date, or the consent date where consent is needed |
| Differential sum (RM600,000, 80% loan) | RM60,000 in cash |
| RPGT retention | 3% (citizen/PR seller) or 7%, paid to LHDN within 60 days |
| SPA stamp duty | RM10 per copy; ad valorem duty falls on the MOT |
| Buyer misses the extension | Seller may usually terminate and forfeit the 10% deposit |
Key points in 30 seconds
- A subsale SPA isn’t bound by the Housing Development Act’s statutory forms, so its terms are negotiable and worth reading line by line.
- Payment is usually a 10% deposit, a differential sum and the bank loan; with an 80% loan on a RM600,000 home, the differential sum is RM60,000.
- Completion is normally 3 months plus a 1-month extension, with late interest that law firms put at 6%–10% a year, 8% being most common.
- Where state or developer consent is needed, the completion period usually starts only when the last condition precedent is met.
- If the buyer still hasn’t paid after the extension, the seller can usually terminate and forfeit the 10% deposit; if the seller defaults, the buyer can sue for specific performance or terminate for a full refund.
How is a subsale SPA different from a new-property SPA?
When you buy from a developer, the SPA must follow the statutory Schedule G, H, I or J forms under the Housing Development (Control and Licensing) Act 1966; see Schedule G, H, I & J explained. A subsale is a private contract between two owners: the seller’s lawyer usually drafts it, the buyer’s lawyer reviews it, and everything is negotiable.
| Item | New property (HDA) | Subsale |
|---|---|---|
| Contract form | Statutory Schedule G/H/I/J | No statutory form; negotiated |
| Payments | Progress billing by stage | 10% deposit, balance within completion period |
| Delivery | 24 or 36 months by law | Completion period (commonly 3+1 months) |
| Late compensation | Statutory LAD at 10% a year | Late interest as agreed in the SPA |
| Defects | 24-month statutory DLP | Usually none; sold as is |
What is the differential sum in a subsale?
Payments under a subsale SPA come in three parts: the 10% deposit (the earnest deposit on the offer plus the balance at the SPA; see earnest deposit Malaysia), the differential sum, and the bank loan. The differential sum is whatever the deposit and loan don’t cover, which you pay in cash. The lower your loan margin, the bigger it gets.
| Item | Share | Amount |
|---|---|---|
| Deposit (offer + SPA) | 10% | RM60,000 |
| Differential sum | 10% | RM60,000 |
| Bank loan | 80% | RM480,000 |
| Total | 100% | RM600,000 |
The differential sum is usually paid to the seller’s lawyer as stakeholder until the transfer and loan documents are ready. One law firm describes payment within about two weeks of request, but your SPA sets the actual deadline. A bank valuation below the price is the most common reason the differential sum balloons; see property valuation in Malaysia.
Running past completion has a price you can calculate. Late interest on a RM480,000 balance at 8% a year is about RM3,156 for 30 days, or RM3,945 if your SPA says 10%. The heavier loss comes at the end of the extension: if the balance is still unpaid, the seller can usually terminate and forfeit the 10% deposit, which is RM60,000 on a RM600,000 home.
Ask Louis directly
Before you sign, send me the draft's completion, late-interest and conditions-precedent clauses and I'll check how the start date and the extension are actually defined.
For your price and loan margin I'll work out a free cash timeline: deposit, differential sum, legal fees and stamp duty, with the week each payment has to be ready.
How does the 3+1 month completion period work?
The completion period is the deadline for paying the full balance. The convention is 3 months, plus a 1-month extended completion period during which the buyer pays late interest on the unpaid amount, calculated daily. Law firms quote different ranges, 6%–8% by one and 8%–10% by another, with 8% the most common figure.
| Late interest rate in SPA | Interest for 30 days |
|---|---|
| 6% a year | RM2,367.12 |
| 8% a year | RM3,156.16 |
| 10% a year | RM3,945.21 |
The formula is RM480,000 × rate × 30 ÷ 365. Delays usually come from slow loan disbursement, the seller’s redemption documents or pending state consent, so ask before signing who bears the interest when the delay isn’t the buyer’s fault.
When does the clock start? For a clean title needing no consent, usually on the SPA date. For leasehold land or titles with a restriction in interest (sekatan kepentingan), state consent comes first, and the completion period normally runs from the consent date or the date the last condition precedent is satisfied.
Which subsale properties need state or developer consent?
Conditions precedent are things that must happen before the deal can proceed. Law firms list these common ones:
- State consent to transfer, typical for leasehold titles, titles with a restriction in interest and Bumiputera-quota units; in Johor it’s handled by PTG Johor or the district land office.
- State consent for a foreign buyer (Johor also charges an approval levy; see foreigners buying in Johor).
- Developer consent or confirmation, or the developer’s execution of the transfer, where the strata or individual title hasn’t been issued.
- Housing authority consent for low-cost units.
- A court order, for example in estate or court-sale cases.
Title types and restrictions are explained in land titles in Malaysia; the consent application itself is covered in the subsale transfer process.
Other subsale SPA clauses to check: possession, fixtures, apportionment
- Vacant possession: how soon after full payment the seller hands over (one firm cites 3 or 5 working days), and what the seller pays if late.
- Sale subject to tenancy: assignment of the tenancy, transfer of the tenant’s deposits and rent apportionment.
- Fixtures and fittings: listed in a schedule, ideally with photos.
- Apportionment: assessment (cukai taksiran), quit rent (cukai tanah), maintenance charges and sinking fund split at the handover or completion date, with the seller clearing old arrears first.
- RPGT retention: the buyer’s lawyer keeps 3% of the price (seller is a citizen or PR) or 7% (seller is neither) and pays it to LHDN within 60 days; company sellers may differ, so confirm with your lawyer.
- Stamp duty and legal fees: the SPA itself carries RM10 per copy; ad valorem duty falls on the transfer (MOT). Each party pays its own lawyer; see stamp duty & legal fees.
- Condition of the property: the state it must be in at handover and your right to a pre-handover inspection.
What happens if the buyer or seller defaults?
| Situation | Typical SPA outcome |
|---|---|
| Buyer hasn’t paid by the end of the extended completion period | Seller may terminate and forfeit the 10% deposit, refunding other sums the buyer paid (such as the differential sum) |
| Buyer’s loan fails after the SPA is signed | The offer’s loan condition no longer protects you unless the SPA says so; this may count as buyer default |
| Seller refuses to complete or can’t deliver title | Buyer may seek specific performance in court, or terminate by written notice and recover everything paid |
| Seller late with redemption documents | Late interest on the seller only if the SPA provides for it; otherwise it’s negotiation |
Lawyers also point out that many standard SPAs don’t define how long a seller’s delay must last before it counts as default, so it’s worth asking your lawyer to add seller late interest and a termination deadline.
Which subsale SPA terms can the buyer negotiate?
Because a subsale SPA has no statutory form, these are the points I most often ask clients to raise with their lawyer. You won’t win every one, but they’re worth asking for:
- A longer completion period where state consent is needed, or where the buyer is a foreigner or self-employed and the loan may be slow: 4 months or more, or a 2-month extension. One law firm notes that state consent alone can add 1–2 months or longer, depending on the state.
- Seller late interest: if your bank has paid off the seller’s loan but the discharge documents are late, the seller should pay interest too. One firm suggests a grace period of about 21 days before it starts.
- Early vacant possession: once the redemption sum has been released and you’re paying loan interest, ask for the keys early so you can renovate or let the unit.
- Repair obligations: list what the seller will fix, the deadline and how it is checked.
- Apportionment date: split maintenance charges and assessment at the actual key handover, not the completion date, so you don’t pay for a home you can’t use yet.
- Arrears confirmation: ask for a letter from the JMB or MC confirming no outstanding charges before completion.
| When | What happens |
|---|---|
| Day 0 | SPA signed, deposit topped up to 10% |
| Within 30 days | SPA stamped (RM10 per copy); the bank’s lawyer prepares loan documents |
| Months 1–2 | Transfer (MOT, Form 14A) signed, valuation and stamp duty assessment; seller’s bank issues the redemption statement |
| Month 3 | Completion date: differential sum and loan paid |
| Month 4 | Extension if needed, with daily late interest |
| After completion | Seller hands over; the lawyer presents the transfer at the land office. See the subsale transfer process |
Checklist before you sign a subsale SPA
- Loan letter of offer received and read (see the bank letter of offer explained).
- Title search done, with no unexplained caveat or prohibitory order.
- Start date of completion, extension and late interest rate clearly defined.
- List of conditions precedent and the refund if any is refused.
- Handover conditions, fixtures list and apportionment written in.
- The seller’s loan redemption arrangements, if the property is charged.
- Enough cash for the differential sum, legal fees and stamp duty (try the buying costs calculator).
What each lawyer does on signing day is in signing the SPA & loan agreement. More guides are in the subsale hub.
Related questions
If the bank is slow to disburse, do I still pay the late interest?
Under most standard SPAs, yes: the interest runs on the unpaid balance regardless of whose delay caused it. So ask your lawyer two questions before signing. Who bears the interest if the delay comes from loan disbursement, the seller’s redemption documents or pending state consent? And can the SPA exclude days lost to the seller’s own paperwork from the late-interest calculation? Both are negotiable while the draft is still open.
Can I get the keys and start renovating before completion?
You can ask, but it has to be in the contract. The usual point to raise it is once your bank has paid the redemption sum to the seller’s bank and you are already paying loan interest. Spell out the early handover date, who pays utilities and maintenance charges in the meantime, what renovation is allowed, and what happens if the sale ultimately does not complete. A verbal agreement is worth nothing here.
Who pays the seller's outstanding maintenance charges and assessment?
A typical SPA requires the seller to clear arrears before completion, with assessment (cukai taksiran), quit rent (cukai tanah), maintenance charges and sinking fund apportioned at the handover or completion date. Two things are worth pressing for: a letter from the JMB or MC confirming no outstanding charges, and apportionment from the day you actually receive the keys, so you are not paying for a home you cannot use.
Can I go back to the seller if I find a leak after completion?
Usually not. A subsale has no statutory 24-month defect liability period and is normally sold as is, so the seller’s obligations end at completion. Your protection comes earlier: inspect the property properly, or bring in an inspector, before signing, and list any repairs with a deadline and how they will be checked in a schedule to the SPA. Otherwise price the work into your offer. See the subsale transfer process.
Frequently asked questions
What does 3+1 months completion mean in a subsale SPA?
The buyer has 3 months from the SPA (or from the unconditional date) to pay the balance, plus a 1-month extension if needed. During the extension the buyer pays late interest on the unpaid sum, most commonly 8% a year, with law firms citing a 6%–10% range. It is market practice, not law, so your SPA governs.
What is a differential sum in Malaysia?
It is the cash the buyer pays beyond the 10% deposit to cover the gap between the price and the loan. On a RM600,000 home with an 80% loan, the deposit is RM60,000, the loan RM480,000 and the differential sum RM60,000, usually held by the seller’s lawyer as stakeholder.
When does the subsale completion period start?
For titles needing no consent it usually starts on the SPA date. For leasehold or restricted titles, state consent comes first and the period normally runs from the consent date or when the last condition precedent is met. Check how your SPA defines the unconditional date.
What happens if the buyer can't complete a subsale on time?
After the 3-month period the buyer can use the 1-month extension by paying late interest. If the balance is still unpaid when the extension ends, the seller can usually terminate, forfeit the 10% deposit and refund other sums, such as any differential sum already paid.
What can I do if the seller refuses to transfer?
A typical subsale SPA lets the buyer either apply to court for specific performance, forcing the sale through, or terminate by written notice and recover everything paid. Some SPAs add agreed damages. Ask your lawyer to send a formal notice as soon as the seller defaults.
How much stamp duty is payable on a subsale SPA?
The SPA itself carries only a fixed RM10 per copy. Ad valorem duty is charged on the Memorandum of Transfer: 1%–4% tiers for Malaysians, and a flat 8% for foreigners buying residential property from 2026. Eligible first-time buyers can be exempt.
Sources & verification
- PM Lee Law — SPA completion deadline (3+1 months, late interest)
- C K Lim & Partners — Subsale Conveyancing FAQ (conditions precedent, late interest)
- Donovan & Ho — Cash Flow & Timing of Sub-Sale Property Purchase
- Donovan & Ho — What to do if the Seller delays the SPA
- KGC Legal — Sale and Purchase Agreement (deposit, default, vacant possession)
- Wong & Yeong — Understanding the SPA in Malaysia
- LHDN — Responsibility of Disposer and Acquirer (RPGT forms)
- KC Group — Stamp Duty Malaysia 2026
- KTP — Malaysia's stamp duty self-assessment and late-stamping penalties (Nov 2025)
Verified: 2026-09-20. This guide is general information, not legal, tax or financial advice. Rules and rates change — confirm in writing with your lawyer, bank or the relevant authority before you sign.
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Louis Koh
11 years in Malaysian property · Johor Bahru & Kuala Lumpur · English & 中文
I help local buyers and cross-border buyers from Singapore with new and subsale property. Every figure in these guides is sourced; when a rule changes, I update the page and date it.
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Louis Koh · 11 years in Malaysian property · +60 10-906 6685 · replies 9am–10pm MYT