Sale and Purchase Agreement — Commercial Property (Malaysia)
SALE AND PURCHASE AGREEMENT (COMMERCIAL PROPERTY)
Contracts Act 1950 (Act 136) | National Land Code 1965 | Stamp Act 1949 | Real Property Gains Tax Act 1976
THIS SALE AND PURCHASE AGREEMENT is made on [SPA Date]
BETWEEN:
(1) [Vendor Name] of [Vendor Address] (hereinafter referred to as the "Vendor"); AND
(2) [Purchaser Name] of [Purchaser Address] (hereinafter referred to as the "Purchaser").
1. THE PROPERTY
1.1 The Vendor agrees to sell and the Purchaser agrees to purchase the [Property Type] known as [Property Address], with title reference [Title Reference], [State], with built-up/land area of approximately [Built-Up Area] (hereinafter referred to as "the Property"), free from all encumbrances save as disclosed herein.
2. PURCHASE PRICE AND PAYMENT
2.1 The purchase price of the Property is [Purchase Price] (the "Purchase Price").
2.2 The Purchase Price shall be paid as follows:
(a) Deposit of [Deposit Amount] (representing 10% of the Purchase Price) payable upon execution of this Agreement; and
(b) Balance purchase price of [Balance Purchase Price] (representing 90% of the Purchase Price) payable within [Completion Period] days from the date of this Agreement (the "Completion Date").
2.3 The Purchaser may extend the Completion Date by a further 30 days upon written notice and payment of interest on the balance purchase price at the rate of 8% per annum calculated daily.
3. VACANT POSSESSION
3.1 The Property is sold [VP Condition]. The Vendor shall deliver the Property to the Purchaser on the Completion Date in its present state and condition, subject to fair wear and tear.
3.2 The Vendor confirms that there are no tenants, licensees, or occupiers in the Property at the date of completion, save as disclosed herein.
4. REAL PROPERTY GAINS TAX
4.1 The Purchaser shall retain 3% of the Purchase Price from the balance payable to the Vendor at completion and shall remit such amount to the Inland Revenue Board of Malaysia (LHDN) within 60 days from the date of disposal of the Property, pursuant to Section 21B of the Real Property Gains Tax Act 1976.
4.2 The Vendor shall promptly file all necessary RPGT returns with LHDN and cooperate with the Purchaser to facilitate compliance with Section 21B.
5. TITLE AND TRANSFER
5.1 Upon receipt of the full Purchase Price (less RPGT retention), the Vendor shall execute and deliver to the Purchaser a duly executed Memorandum of Transfer (Form 14A under the National Land Code 1965) to effect the transfer of the Property to the Purchaser.
5.2 The Purchaser shall bear all stamp duty under the Stamp Act 1949 (Act 378), legal fees under the Solicitors' Remuneration Order 2023, and registration fees payable in connection with the transfer of the Property.
6. GOVERNING LAW
6.1 This Agreement is governed by and construed in accordance with the laws of Malaysia. The parties submit to the exclusive jurisdiction of the courts of [State].
Vendor
________________
Signature
Purchaser
________________
Signature
What Is a Sale and Purchase Agreement — Commercial Property (Malaysia)?
A Sale and Purchase Agreement — Commercial Property in Malaysia records the price, assets, warranties, and completion terms agreed between buyer and seller.
Because commercial SPAs are not prescribed, the parties have greater freedom to negotiate terms. However, the Bar Council Malaysia has developed widely-used standard form commercial SPAs that set out the customary terms for shop lot and office transactions in Peninsular Malaysia. These standard forms are frequently adapted by conveyancing solicitors who are members of the Malaysian Bar registered under the Legal Profession Act 1976 (LPA 1976, Act 166).
Commercial properties in Malaysia may be held under individual titles (Geran Individu or Pajakan Negeri) or strata titles issued under the Strata Titles Act 1985 (Act 318). For commercial strata properties such as office suites in stratified buildings, the Management Corporation (MC) established under the Strata Management Act 2013 (SMA 2013, Act 757) imposes obligations on owners regarding maintenance fees (sinking fund and service charge) and compliance with building management rules. These obligations must be addressed in the commercial SPA.
Stamp duty on commercial SPAs is assessed under the Stamp Act 1949 (Act 378) at the same ad valorem rates applicable to residential properties: 1% on the first RM 100,000, 2% on the next RM 400,000, 3% on RM 500,001 to RM 1,000,000, and 4% above RM 1,000,000. Real Property Gains Tax (RPGT) under the Real Property Gains Tax Act 1976 (RPGT Act 1976) applies on the chargeable gain realised by the vendor on disposal of commercial property, at rates that vary depending on the holding period and the vendor's residency status.
The legal framework governing the Sale and Purchase Agreement — Commercial Property (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Sale and Purchase Agreement — Commercial Property (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The National Land Code 1965 (Act 56) sets the foundational requirements.
When Do You Need a Sale and Purchase Agreement — Commercial Property (Malaysia)?
A Sale and Purchase Agreement for commercial property in Malaysia is required in every transaction involving the purchase and sale of commercial real property.
A commercial SPA is required when purchasing a shop lot in a commercial development, whether from a developer or in the secondary market. Shop lots are among the most commonly transacted commercial properties in Malaysia, particularly in Klang Valley, Penang, and Johor Bahru, and the SPA governs all aspects of the transaction from deposit to vacant possession.
A commercial SPA is needed when acquiring office space in a stratified commercial building such as a purpose-built office (PBO) or mixed-use development. The SPA must address the strata title status, the role of the Management Corporation under the Strata Management Act 2013, and any outstanding maintenance fees (sinking fund charges) owed by the vendor.
A commercial SPA is required when purchasing an industrial property such as a single-storey or double-storey factory, warehouse, or light industrial unit in an industrial park. Industrial properties often carry specific zoning conditions and title restrictions endorsed under the NLC 1965 that must be disclosed and dealt with in the SPA.
A commercial SPA is needed when a company incorporated under the Companies Act 2016 (Act 777) acquires commercial real property as a capital asset or for investment purposes. The board of directors must pass a resolution authorising the purchase, and the SPA must identify the company by its Companies Commission of Malaysia (SSM) registration number.
A commercial SPA is required when the transaction involves a vendor who is a foreign entity or a non-citizen, triggering requirements for prior approval from the Economic Planning Unit (EPU) or the state authority under the applicable foreign ownership threshold for commercial properties in each state.
What to Include in Your Sale and Purchase Agreement — Commercial Property (Malaysia)
A complete Malaysia commercial property SPA must contain the following essential elements.
Parties: Full legal names and identification numbers (MyKad, passport, or SSM company registration number) of vendor and purchaser. For corporate parties, the authorised signatories and the board resolution authorising the transaction under the Companies Act 2016 must be referenced.
Property description: Full postal address, lot or parcel number, title reference (Geran, Pajakan Negeri, or Hakmilik Strata under the Strata Titles Act 1985), land area or built-up area, tenure (freehold or leasehold), and any zoning conditions or restrictions in interest endorsed on the title under the National Land Code 1965.
Purchase price and payment: The agreed purchase price in RM, the deposit (typically 10% of the purchase price), the mode and timeline for payment of the balance purchase price, and the escrow arrangements where applicable. The completion period for commercial SPAs is typically 90 to 120 days from the date of the SPA.
Vacant possession: The date by which the vendor must deliver vacant possession of the property, free from all tenancies (or subject to tenancies as disclosed), the consequences of delay in VP, and the procedure for handing over keys, utility meters, and other essential items.
Title and encumbrances: A search result from the Pejabat Tanah dan Galian confirming the vendor's title and any registered charges, liens, or caveats. The vendor's covenant that the property is free from encumbrances (or a list of disclosed encumbrances to be discharged prior to completion) is a standard provision.
Real Property Gains Tax (RPGT): Allocation of RPGT liability under the Real Property Gains Tax Act 1976. The purchaser is required to retain 3% of the purchase price and remit it to the Inland Revenue Board of Malaysia (LHDN) as a withholding amount pending the vendor's RPGT assessment, under Section 21B of the RPGT Act 1976.
Stamp duty and legal costs: The purchaser's obligation to pay stamp duty under the Stamp Act 1949 (Act 378) and conveyancing fees under the Solicitors' Remuneration Order 2023, both of which are payable by the purchaser by convention in Malaysian conveyancing practice.
Additional compliance elements for a Sale and Purchase Agreement — Commercial Property (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
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Forms Legal. (2026). Sale and Purchase Agreement — Commercial Property (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/real-estate/purchase-sale/sale-purchase-agreement-commercial-malaysia
"Sale and Purchase Agreement — Commercial Property (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/real-estate/purchase-sale/sale-purchase-agreement-commercial-malaysia.
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note = {Free legal document template. Based on National Land Code 1965 (Act 56)}
}Frequently Asked Questions
No. The Housing Development (Control and Licensing) Act 1966 (HDA 1966, Act 118) applies exclusively to residential properties developed by licensed housing developers in Peninsular Malaysia. Commercial properties — including shop lots, office suites, factories, warehouses, and retail units — are not subject to the HDA 1966 and the prescribed Schedule G or H SPA forms. A commercial SPA is governed by the Contracts Act 1950 (Act 136), the National Land Code 1965, and the Stamp Act 1949. The parties have greater contractual freedom in a commercial SPA, as the statutory protections for homebuyers — such as liquidated ascertained damages for late VP, the defect liability period, and the Housing Development Account — do not apply. Purchasers of commercial property therefore rely on negotiated contractual terms and the advice of a Malaysian Bar-registered solicitor.
The typical completion period for a commercial SPA in Malaysia is 90 days from the date of the SPA, with the option to extend by a further 30 days upon payment of an agreed extension fee (usually interest at 8% per annum on the balance purchase price). This 90-day completion period is the market standard adopted in the Bar Council Malaysia's standard form commercial SPA. The completion period commences from the date the purchaser's solicitors receive the SPA executed by both parties. In complex transactions involving company-owned properties, EPU approvals, or the discharge of multiple charges, a longer completion period of 120 to 180 days may be negotiated. Failure by the purchaser to pay the balance purchase price within the extended completion period entitles the vendor to forfeit the deposit and treat the SPA as rescinded under the Contracts Act 1950.
Real Property Gains Tax (RPGT) is a tax imposed under the Real Property Gains Tax Act 1976 on the chargeable gain realised by a vendor on the disposal of real property in Malaysia. For commercial property transactions, RPGT applies to both individuals and companies. The applicable RPGT rates for Malaysian citizens and permanent residents are: 30% for disposal within 3 years; 20% for disposal in the 4th year; 15% for disposal in the 5th year; and 0% for disposal in the 6th year and beyond. For companies and non-citizens, the rates are 30% for disposal within 5 years and 10% thereafter. Under Section 21B of the RPGT Act 1976, the purchaser is required to retain 3% of the purchase price from the balance due to the vendor and remit it to the Inland Revenue Board of Malaysia (LHDN) within 60 days of the date of disposal as a withholding on the vendor's RPGT liability.
Foreign individuals and foreign-owned companies may purchase commercial property in Malaysia subject to minimum purchase price thresholds set by each state under the National Land Code 1965 and the foreign property ownership guidelines issued by the Economic Planning Unit (EPU) of Malaysia. The general minimum purchase price for commercial property acquired by foreigners in most Peninsular Malaysian states is RM 1,000,000 per unit. EPU approval is generally not required for commercial property transactions above the state minimum threshold — the approval requirement was substantially relaxed from 2014 onwards. However, EPU approval may still be required for certain categories of commercial land (including agricultural land being converted to commercial use), for transactions involving Bumiputera reserved commercial lots, and for acquisitions by foreign-controlled companies in sensitive sectors as determined by the National Land Code 1965, Section 433B.
A commercial property SPA in Malaysia can be cancelled after signing only on grounds recognised by the Contracts Act 1950 (Act 136) or the terms of the SPA itself. If the purchaser fails to complete the transaction (i.e., fails to pay the balance purchase price by the extended completion date), the vendor is entitled to forfeit the 10% deposit as liquidated damages and treat the SPA as rescinded, unless the SPA provides otherwise. If the vendor fails to deliver vacant possession or breaches a material term of the SPA, the purchaser may elect to rescind the SPA and claim the return of all monies paid plus damages. Both parties may also mutually agree in writing to rescind the SPA, in which case the terms of rescission — including refund of the deposit — are negotiated between them. Rescission for misrepresentation is available under Section 19 of the Contracts Act 1950 if a party was induced to enter the SPA by a false statement of material fact.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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