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Important Clauses to include


I have an acquaintance who has just recently paid a 3% booking fee to purchase a condominium unit. Just today I heard that one of the banks has refused to give her a bank loan as the current owner (the vendor/seller) is bankrupt according to their records (or via CCRIS). She is now pondering whether to proceed with the sale considering the future complications that could arise. One thing she did right was to have this following clause included in the Offer Letter/Booking Form. I do recommend for purchasers to have this clause included in the offer to purchase.

This purchase is subject to loan approval with margin of financing of at least 80% within 14 working days, failing which the earnest deposit will be refunded in full. Loan rejection must be proven with the rejection letters.

This clause is of course subject to the acceptance of the seller. And it is your responsibility as a purchaser to do your due diligence to ensure you are able to afford said property. Please read my previous article on Steps to take before purchasing a house. 80% margin of financing is mentioned as it is fair for both parties. Although most first and second property purchasers would hope to get 90%, it is recommended that the purchasers be able to afford the property even if only granted a margin of 80%. Though if as a purchaser you really can only go through with the purchase if granted 90% financing, do request for that margin to be included in the form.

The 10 working days is fair (2 weeks), giving more than enough time for the purchaser to secure a loan. The seller has a right to request a proof of loan acceptance once the 10 working days is up.

Another good clause to have is in the event the sale comes with furnishing. If not included at this stage, ultimately, the inventory list must be included in the S&P.

This purchase is inclusive of the fixtures and fittings. See attachment 1.

The inventory list should be prepared by the seller as a separate attachment to be attached with the offer letter.

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