What Happens If a Property Seller Breaches the SPA in Malaysia?

March 29, 2025

What Happens If a Property Seller Breaches the SPA in Malaysia?

For Buyers Facing a Breach of SPA

If you’re a homebuyer in Malaysia and the seller has failed to deliver what was promised in your signed Sale and Purchase Agreement (SPA), you’re likely feeling frustrated, anxious, and unsure of what to do next. Maybe the seller has delayed the property handover, refused to complete the sale, or sold the exact property to someone else. Regardless of the details, a breach of SPA can put your finances and future plans at risk.

This article is written for you — the buyer who trusted the process, paid a deposit, and now needs answers and legal solutions.

When a Property Seller Fails to Honour the Agreement

Imagine this: you’ve signed the SPA, paid your booking and deposit fees, and waited patiently for the property transfer. Suddenly, the seller stalls. Weeks go by, and you find out the seller is refusing to proceed, or worse, has sold the property to someone else for a higher price. You’re left without a home, without certainty, and possibly without your hard-earned money.

Seller breaches may happen due to:

  • Deliberate refusal to transfer the title
  • Attempting to cancel the SPA after the deposit is paid
  • Delays beyond agreed timelines
  • Double sale of the same property
  • Failure to deliver vacant possession

In all these cases, your rights as a buyer are protected by Malaysian law — but only if you act promptly.

What Malaysian Law Says About Breach of SPA

Several laws in Malaysia protect buyers under an SPA:

  • Contracts Act 1950
    • This law governs all contracts in Malaysia, including property SPAs. If the seller breaks a term of the SPA without a lawful excuse, it constitutes a breach of contract.
  • National Land Code 1965
    • This governs the registration of land titles and ownership. Legal remedies are available if the seller refuses to register the ownership transfer.
  • Specific Relief Act 1950
    • This allows buyers to request the court to compel the seller to complete the sale — a remedy known as specific performance.
  • Claiming damages for financial losses due to breach
  • Recovering deposits or full payments already made
  • Obtaining an injunction to stop the seller from selling to someone else
  • Enforcing specific performance, forcing the seller to complete the deal

If fraud or misrepresentation is involved, you may also be entitled to file a criminal complaint or civil suit.

How a Lawyer Can Help You Navigate the Breach

A property lawyer can be your strongest ally in situations like this. They understand the legal procedures, know how to protect your rights, and can move quickly to prevent further damage.

Here’s how a lawyer can help:

  • Review and interpret the SPA to assess the nature of the breach
  • Send a formal letter of demand to the seller outlining the breach and remedies
  • Lodge a private caveat on the land title to prevent a second sale
  • Initiate court proceedings for damages or specific performance
  • Negotiate a settlement if a practical resolution is preferred
  • Assist in recovering money through legal claims or enforcement

The earlier you get legal advice, the better your position is, especially if the property title has not yet been transferred.

Steps You Can Take to Protect Your Rights

If you’re facing a breach of SPA by a property seller, here’s what you can do right now:

1. Collect All Documentation

Gather your SPA, receipts, payment proofs, email communications, and agent correspondence. These will be crucial to prove your case.

2. Confirm Land Title Status

Your lawyer can check whether the property has already been transferred or if the seller is trying to register a transfer with someone else.

3. Lodge a Private Caveat

This legal tool temporarily blocks any further dealings with the property — vital if you suspect a second sale is happening.

A formal notice informs the seller of their breach and your intent to seek legal remedies if the matter is unresolved.

Depending on the situation, you may choose to:

  • Claim a refund and walk away
  • Sue for damages (compensation)
  • File for specific performance in court

Your lawyer will guide you based on your case’s strength and priorities.

6. Consider Mediation or Negotiated Settlement

Not every case must end up in court. A skilled lawyer can help you negotiate a fair outcome, especially if the seller is open to resolving matters privately.

Conclusion

Facing a breach of the Sale and Purchase Agreement can be overwhelming, especially when your dream home or hard-earned investment is on the line. But under Malaysian law, you have strong rights — and legal tools — to fight back, protect your interests, and seek justice.

Please don’t wait until it’s too late. If you believe the seller has breached your SPA, immediately speak to a property lawyer to explore your legal options and stop further losses.

Need help enforcing your property rights? Contact a lawyer today to protect your purchase and hold the seller accountable.

FAQ

1. What is considered a breach of SPA by a property seller in Malaysia?

A breach occurs when the seller fails to honour key terms of the SPA, such as refusing to complete the sale, delaying the property handover, reselling the property to another party, or failing to transfer the land title.

2. Can I get my deposit back if the seller cancels the SPA without a valid reason?

Yes. If the cancellation is unjustified, you may be entitled to a full refund of your deposit and potential compensation for losses incurred due to the breach.

You may pursue:

  • Damages for financial loss
  • Specific performance (forcing the seller to complete the sale)
  • Injunctions to stop further transfers
  • Refunds or contract termination in some instances

4. What is specific performance, and how does it help me?

Specific performance is a court-ordered remedy that compels the seller to fulfil their contractual obligation — in this case, to complete the sale and transfer the property to you.

5. Can I stop the seller from transferring the property to someone else?

Yes. You can lodge a private caveat with the land office to prevent the seller from transferring or registering the title in someone else’s name until the dispute is resolved.

6. What if the seller has already transferred the property to another buyer?

If the second buyer acted in good faith and registered the title, your legal options may be limited. However, if you prove the second buyer knew about your prior transaction, you may challenge the transfer in court.

7. How soon should I act after discovering the seller’s breach?

Immediately. Delays can weaken your legal position, especially if the property gets transferred to another buyer. Speak to a lawyer and take legal steps quickly.

8. Do I need a lawyer to handle this dispute?

Yes. Property disputes involve complex laws and time-sensitive actions. A lawyer can advise you, protect your rights, and take legal action if necessary.

9. Can I resolve the dispute without going to court?

Yes. If both parties are willing, you may settle the matter through negotiation or mediation. A lawyer can help you explore these options and secure a fair agreement.

Prepare your:

  • Sale and Purchase Agreement (SPA)
  • Proof of payment (deposit, instalments)
  • Communication records with the seller or agent
  • Any receipts, legal letters, or title search results

These documents will support your legal claim and help your lawyer build a strong case.

Disclaimer:

The information provided in this article is for general informational purposes only and does not constitute legal advice. While we strive to ensure that the content is accurate and up-to-date, the laws of Malaysia are subject to change, and the application of legal principles can vary depending on the specific facts of each case. We strongly recommend consulting with a qualified legal professional or law firm in Malaysia before making any decisions or taking any actions based on the information provided in this article. Neither the authors nor the publisher accept any responsibility for any loss, damage, or inconvenience caused as a result of reliance on the content of this article.

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