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Lease With Option To Buy Commercial Property Template for Malaysia

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Key Requirements PROMPT example:

Lease With Option To Buy Commercial Property

"I need a Lease with Option to Buy Commercial Property agreement for a retail space in Kuala Lumpur's business district, with a 3-year initial lease starting March 1, 2025, and an option to purchase the property within the first 24 months at a pre-agreed price of RM 2.5 million."

Document background
The Lease With Option To Buy Commercial Property agreement is a specialized legal instrument used in Malaysian commercial real estate transactions where parties wish to combine a leasing arrangement with a future purchase opportunity. This document is particularly suitable for businesses seeking to test a location before committing to a purchase, or those requiring time to arrange financing for an eventual acquisition. It must comply with Malaysian legislation, particularly the National Land Code 1965, Contracts Act 1950, and relevant property laws. The agreement comprehensively covers both the leasing phase (including rental terms, maintenance obligations, and use restrictions) and the purchase option details (including price determination, exercise period, and completion requirements). This type of agreement is commonly used in Malaysian commercial property markets, particularly in urban centers like Kuala Lumpur, Penang, and Johor Bahru, where property values and commercial opportunities are significant considerations for businesses.
Suggested Sections

1. Parties: Identification of the landlord/seller and tenant/potential buyer, including registration numbers for companies

2. Background: Context of the agreement, property overview, and general intent of parties

3. Definitions: Definitions of key terms used throughout the agreement

4. Demise: Formal grant of lease and description of the leased premises

5. Lease Term: Duration of lease, commencement date, and any renewal provisions

6. Rental: Rent amount, payment terms, review mechanisms, and security deposit requirements

7. Option to Purchase: Terms of the purchase option, including price, exercise period, and mechanism

8. Property Use: Permitted use of premises and restrictions

9. Maintenance and Repairs: Responsibilities for property maintenance, repairs, and improvements

10. Insurance: Required insurance coverage for both parties

11. Assignment and Subletting: Restrictions on transfer of rights

12. Termination: Grounds and procedure for termination of lease

13. Exercise of Option: Detailed procedure for exercising the purchase option

14. Completion of Sale: Process and requirements for completing the property purchase

15. Representations and Warranties: Statements of fact and promises by both parties

16. Governing Law: Confirmation of Malaysian law governance and jurisdiction

17. Execution: Signature blocks and attestation requirements

Optional Sections

1. Break Clause: Optional early termination provisions, included when parties want flexibility to end lease early

2. Service Charge: Include when property is part of larger complex with shared services

3. Environmental Matters: Required for properties with specific environmental concerns or requirements

4. Planning and Zoning: Include when property has specific planning restrictions or requirements

5. Alterations: Detailed provisions about permitted structural changes, included for properties likely to need modification

6. Guarantee: Include when additional security is required from a parent company or individual

7. Option Extension: Provisions for extending the option period, included when flexibility might be needed

8. Pre-emption Rights: Include when parties want rights of first refusal for additional property areas

Suggested Schedules

1. Schedule 1: Property Description: Detailed description of property including lot number, title details, and floor plans

2. Schedule 2: Rental Schedule: Detailed breakdown of rent payments, review dates, and escalation provisions

3. Schedule 3: Condition Report: Initial condition of property and any existing defects

4. Schedule 4: Purchase Price Calculation: Formula or fixed price for property purchase and any adjustments

5. Schedule 5: Permitted Use: Detailed description of allowed commercial activities

6. Schedule 6: Service Charges: Breakdown of service charges if applicable

7. Appendix A: Property Plans: Floor plans, site maps, and relevant drawings

8. Appendix B: Form of Option Notice: Template for exercising the purchase option

9. Appendix C: Title Documents: Copies of relevant title documents and encumbrances

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions








































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Relevant Industries

Real Estate

Retail

Manufacturing

Hospitality

Healthcare

Professional Services

Technology

Education

Logistics

Banking and Finance

Food and Beverage

Warehousing

Corporate Services

Relevant Teams

Legal

Finance

Real Estate

Operations

Facilities Management

Risk Management

Corporate Development

Administrative

Procurement

Compliance

Property Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Real Estate Director

Property Manager

Facilities Manager

Legal Counsel

Commercial Director

Operations Manager

Finance Manager

Business Development Manager

Risk Manager

Procurement Manager

Company Secretary

Asset Manager

Investment Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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