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Reservation Fee Agreement Template for Malaysia

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Key Requirements PROMPT example:

Reservation Fee Agreement

"I need a Reservation Fee Agreement for a luxury condominium unit in Kuala Lumpur, with a reservation fee of RM50,000 and a 30-day reservation period starting March 1, 2025, including terms for full refund if financing is not approved."

Document background
The Reservation Fee Agreement serves as a preliminary contract in Malaysian property transactions, typically used in new development projects or pre-construction sales. This document is essential when a potential buyer wishes to secure their interest in a property while completing due diligence or arranging financing. The agreement provides protection for both parties by clearly defining the reservation period, fee amount, and conditions for either proceeding with the purchase or obtaining a refund. Under Malaysian law, the Reservation Fee Agreement must comply with the Contracts Act 1950 and relevant property regulations, particularly when used in housing development projects. It bridges the gap between initial interest and the formal Sale and Purchase Agreement, offering a structured approach to property transactions in Malaysia's dynamic real estate market.
Suggested Sections

1. Parties: Identifies and provides full details of the property developer/seller and the potential buyer

2. Background: Outlines the context of the agreement, including the developer's ownership of the property and the buyer's interest in purchasing

3. Definitions: Defines key terms used throughout the agreement

4. Reservation Fee: Specifies the amount of the reservation fee and payment terms

5. Duration of Reservation: States the period for which the property will be reserved

6. Property Details: Brief description of the property being reserved

7. Rights and Obligations: Details the rights and obligations of both parties during the reservation period

8. Treatment of Reservation Fee: Explains how the reservation fee will be handled (e.g., conversion to deposit, refund conditions)

9. Termination: Circumstances under which the agreement can be terminated

10. Governing Law: Confirms Malaysian law as the governing law of the agreement

11. Execution: Signature blocks and execution formalities

Optional Sections

1. GST/Tax Provisions: Include when the reservation fee is subject to goods and services tax or other applicable taxes

2. Assignment: Include when the buyer may want the right to assign their reservation to another party

3. Force Majeure: Include when parties want protection against unforeseen circumstances affecting the agreement

4. Confidentiality: Include when sensitive information will be exchanged during the reservation period

5. Dispute Resolution: Include when parties want to specify alternative dispute resolution methods before litigation

Suggested Schedules

1. Schedule 1 - Property Details: Detailed description of the property including lot number, location, size, and specifications

2. Schedule 2 - Payment Details: Breakdown of the reservation fee, payment methods, and bank account details

3. Schedule 3 - Required Documents: List of documents required from both parties for the reservation and subsequent sale

4. Appendix A - Property Plans: Floor plans, location maps, and other relevant property drawings

5. Appendix B - Developer's License: Copy of the developer's license and relevant permits

Authors

Alex Denne

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

Relevant legal definitions

























Clauses




















Relevant Industries

Real Estate

Property Development

Construction

Legal Services

Property Investment

Residential Property

Commercial Property

Relevant Teams

Legal

Sales

Business Development

Compliance

Property Management

Project Development

Customer Relations

Documentation

Finance

Relevant Roles

Property Developer

Real Estate Agent

Legal Counsel

Property Manager

Sales Director

Contracts Manager

Real Estate Lawyer

Property Investment Manager

Sales Executive

Business Development Manager

Compliance Officer

Project 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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