Document background
The Sale Deposit Agreement is a preliminary legal instrument commonly used in Malaysian property transactions to secure the intention to purchase real estate. This document is typically executed before the main Sale and Purchase Agreement when a buyer wishes to reserve a property and demonstrate serious intent to purchase. It establishes the terms under which a deposit (usually 2-10% of the purchase price) is paid and held, often by a stakeholder such as a law firm. The agreement provides protection for both parties by clearly defining the conditions for the deposit's return or forfeiture, compliance requirements with Malaysian property laws, and the timeline for completing the full purchase. It's particularly important in both residential and commercial property transactions, helping to prevent disputes and providing clarity on parties' obligations during the period between initial deposit and final sale.
