Purchasing your first home can be overwhelming, especially when you might be unfamiliar with certain terms or processes, such as Sales and Purchase Agreement(SPA). Maybe you hear of it often but you are not sure what it is. A Sales and Purchase Agreement or SPA or S&P is a legal contract between buyer and seller with terms and conditions that are mutually agreed upon.

This agreement enforces legal binding terms and conditions in the home-buying process, protecting the rights of both home purchasers and developers. Once a SPA is signed, you immediately begin the process of closing the deal. If you're interested to find out how it appears and what's contained in the agreement, there are some SPA Malaysia samples available online.

It is usually prepared by a lawyer who specialises in property, appointed by the developer or seller requiring an agreement from both parties.

What does a SPA or S&P consist of?

1. Defect Liability Period(DLP) 

Defect Liability Period or DLP is crucial if you are purchasing a brand-new home directly from the developer. Technically, this is a warranty term.

If you discover any issues or defects in the property during this period, the developers will be liable for repairing them.

2. Sales and Purchase Terms

If you're selling your home, you'll need to include the following information such as the cost of the property and when payment must be made, amount of deposit, should payments be made in instalments or in full and in which currency should the payment be made.

3. Property Floor Plan

If you're investing in property, it's important to go over every aspect of the SPA, particularly the floor plan. Some developers might take advantage and offer you the impression of a unit that is not the same as the one you will actually own.

As a result, this section contains factual information on your apartment, including measurements, amenities, design, and materials used to build the property.

Be sure to examine every aspect to confirm that you are getting what you paid for before signing the contract.

4. Transaction Process & Details

This section explains what the seller is offering and why they are selling it in clear terms so that both parties understand it.

If you're selling a house, for example, you must specify which part or portion of the house you're selling.

If you are still utilising any part of the property, it must be excluded from the transaction since anything specified in the contract becomes the buyer's property after the sale.

You can read more about Sales and Purchase Agreement at 'Important Sale & Purchase Agreement (SPA) Features and Provisions You Should Know!'.