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How to Purchase an Under-Con Property
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How to Purchase an Under-Con Property

by programmerApril 3, 2016

First off, don’t be alarmed by the word “con” in “under-con”; it is simply an abbreviation for “construction”, and it spells “under-construction” in full, which is basically a project that’s in the process of being physically realised on site. (Hopefully) no conning involved! And yes, purchasing under-con is a pretty common practice, although it differs from outright final product purchases.

What It Means to Buy Under-Con

The process of purchasing an under-con property is also known as purchasing off-the-plan, because you’ll be making your purchase based on your evaluation of two-dimensional drawings, artist impressions, and perhaps a show unit if it’s already up, as opposed to purchasing a completely constructed property which you can walk into and experience first-hand. You’ll be dealing directly with the developer rather than through a middle-person. You’ll be paying for your purchase in stages.

What Happens When You Purchase Under-Con

1. Signing of the Letter of Intent

The letter of intent, or letter of offer, indicates your intent to purchase a particular unit. Once signed by both you and the developer, you’ll have to cough up an earnest deposit (not to be confused with down-payment) for your purchase, which will become part of your down-payment upon the signing of a legal Sales and Purchase Agreement (SPA). Think of the earnest deposit as a sub-set of your 10% down-payment. Both this deposit and the letter of intent locks your ownership to that unit so you won’t be able to sell it to a different party until the hand-over of keys takes place.

2. Get a Lawyer to Draw Up the SPA

There are two ways you can go about this step. The first is to go with a lawyer that’s provided by the developer. “Free legal fees” is becoming an increasingly common feature in new launches. This means that the SPA has been conveniently drawn up for you, but since the developer is also that lawyer’s pay-master, you can expect the SPA to lean a certain way, to a certain extent. On the other hand, you can also elect your own solicitor to draw up the SPA for a fairer contract. The SPA is to be drawn up and signed – executed – within a fortnight from the date the letter of intent is signed.

3. The Developer Transfers the Title to You

A memorandum from the developer will transfer ownership of the unit to you. In the absence of a title, such as when the strata title application of the land is still in progress, a deed of assignment will give you the rights and benefits of your title to you under the SPA.

4. Submit Land Office Forms for Government Approval

Your purchase isn’t just at the mercy of your bank or, if it’s a certain type of property, your eligibility; your purchase also has to be approved by the state government. The Land Office (Pejabat Tanah) is the state government arm that handles this, so you’ll have to submit the appropriate forms to that department for approval.

5. Pay Up the Down-Payment

Upon signing the SPA, it’s time for you to pay the full down-payment for your unit, which is usually 10% of the purchase price. This means you’ll have to pay the remaining 8% of the purchase price is put towards the down-payment, on top of the 2% earnest deposit paid earlier.

6. Pay the Remaining Sum Progressively

The remaining 90% of the purchase price shall be paid progressively, calculated based on percentages for each stage of construction works completed or commenced, depending on whether a Schedule SPA or a Non-Schedule SPA is used. The progress claims must be submitted by the developer to be certified by the architect in charge as well as the surveyor before it becomes valid billings to you, the purchaser.


You’ll need the ability to visualise the spaces from the two-dimensional drawings when you purchase an under-con property, as well as a sense of trust in the developer and/or contractor constructing the project that they will deliver a quality product as promised. Purchasing an under-con property can be significantly cheaper than purchasing a completed unit, especially if you managed to snag a first-phase unit in a multi-phase masterplan.

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