Legal & SPA
Booking fee, letter of offer, SPA: the moment you are actually bound
A booking fee, the statutory SPA's first 10%, and a subsale earnest deposit get treated as one thing. They are not. For an HDA residential unit, collecting money before the statutory sale and purchase agreement is signed is prohibited outright under Regulation 11(2) — a rule a private subsale is not even subject to.
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| Best for | Buyers at the booking, offer or SPA stage |
|---|---|
| Risk level | Medium |
| Buyer action | Send Lewis the property, how the names are held on the title and what you are trying to decide, and he will tell you what to check first. |
When you are actually bound
This post works through three payments people treat as one, with completely different legal consequences For a residential unit sold by a licensed developer, the agreement is a statutory form. The protections in it are not concessions the developer chose to give, and they cannot be contracted away.
Three payments, three different rules
People use "deposit" loosely to describe three payments that sit under completely different legal regimes. A booking fee is money collected from a prospective buyer of a new HDA residential unit before any statutory agreement exists — a holding sum to secure a unit while paperwork is prepared. The first 10% is the initial payment under the statutory sale and purchase agreement itself, due when that agreement is signed, and governed by the schedule the agreement follows. An earnest deposit in a subsale is money paid on a private resale between two individuals, to show serious intent while an offer or option is negotiated, governed by whatever the offer form or option agreement says rather than by the HDA at all. Knowing which of the three you are being asked for changes what protection you have.
Why the booking fee is prohibited, not just discouraged
Regulation 11(2) of the Housing Development (Control and Licensing) Regulations 1989 states that no person, including parties acting as stakeholders, shall collect any payment by whatever name called except as prescribed by the contract of sale. That is a flat prohibition, not a best-practice guideline. It applies before the statutory sale and purchase agreement is signed, because before that point there is no "contract of sale" prescribing any payment at all — so any payment collected at that stage, under any label, falls outside what the regulation allows. The wording is deliberately wide: it does not just bind the developer. It reaches an estate agent taking money on the developer's behalf, and it reaches a lawyer who agrees to hold the sum as stakeholder pending signing. Calling the arrangement a stakeholder scheme does not exempt it — Regulation 11(2) names stakeholders specifically because that was the workaround developers tried.
What is actually due, and when
Under the statutory sale and purchase agreement, the first payment prescribed by the contract is 10% of the purchase price, and it becomes payable immediately upon signing of the agreement — not before it. That is the only payment the regulation contemplates at this early stage of a new-launch purchase. If a developer, agent or lawyer is asking for money ahead of that signing, under any name — booking fee, reservation fee, goodwill deposit — the request itself is the problem, regardless of how it is documented.
Why a subsale earnest deposit is a different animal
The Housing Development (Control and Licensing) Regulations 1989 govern licensed housing developers selling new units — the statutory framework behind Schedule G and Schedule H agreements. A subsale, where one private owner sells an existing unit to another buyer, is not a housing development transaction in that sense, so Regulation 11(2) has no application to it. An earnest deposit paid to secure a subsale unit sits under ordinary contract law: whatever the offer to purchase, letter of intent or option agreement says about when it is paid, what it secures and when it becomes refundable or forfeitable is what governs. That document deserves the same scrutiny a new-launch buyer would give a booking form — because here, unlike the new-launch case, there is no blanket statutory prohibition doing the work for you.
The distinction that actually matters
The crux is not the word used for the payment — it is which market you are in. New-launch, HDA-licensed developer, residential unit: no payment before the statutory agreement is signed, full stop, and 10% is due on signing. Subsale, private owner to private buyer: no HDA prohibition applies, and the terms of your own offer or option document are what decide the outcome. Confusing the two leads buyers to either accept an unlawful booking fee request on a new launch, or assume a subsale deposit carries protections it does not have.
Check this against your own case
Read your own agreement rather than a summary of it. For an HDA residential unit the terms are prescribed by statute and cannot be watered down, so any clause that looks worse than the statutory position is worth querying immediately. For anything outside the HDA, the contract is whatever was drafted — and that is exactly where the risk sits.
Buyer checklist
If you are buying a new-launch HDA residential unit, no one — not the developer, not the agent, not a lawyer holding it as stakeholder — is allowed to collect a booking fee from you before you sign the statutory sale and purchase agreement. Regulation 11(2) of the Housing Development (Control and Licensing) Regulations 1989 says no payment may be collected except as prescribed by the contract of sale, and the first payment prescribed by that contract is 10% of the purchase price, due on signing. A subsale is different: the HDA regime does not apply, so an earnest deposit paid to secure a private resale sits under ordinary contract law, not this prohibition.
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| 1 | Confirm whether the unit is a licensed HDA new launch or a private subsale — the rules differ completely. |
|---|---|
| 2 | On a new launch, refuse any request for payment before the statutory sale and purchase agreement is signed. |
| 3 | Remember Regulation 11(2) binds the developer, the agent and any lawyer holding money as stakeholder alike. |
| 4 | Expect 10% of the purchase price to fall due on signing the statutory agreement, not before. |
| 5 | On a subsale, read the offer form or option agreement carefully — it, not the HDA, governs your deposit. |
Common questions
Can a developer legally ask for a booking fee before I sign the SPA?
No. Regulation 11(2) of the Housing Development (Control and Licensing) Regulations 1989 prohibits collecting any payment before the statutory sale and purchase agreement is signed, whatever the payment is called.
Does it matter if the agent, not the developer, is holding the money?
No. Regulation 11(2) explicitly catches parties acting as stakeholders, which includes an estate agent or a lawyer holding funds pending signing.
How much is due when I sign the statutory SPA?
The first payment prescribed by the statutory agreement is 10% of the purchase price, payable immediately on signing.
Does this booking fee prohibition apply to a subsale unit?
No. The Housing Development (Control and Licensing) Regulations 1989 govern licensed developers selling new units; a private subsale is not that transaction, so an earnest deposit there is governed by your own offer or option document instead.
Has the booking fee prohibition been relaxed recently?
No. As of mid-2026 the prohibition still stands; industry bodies are lobbying to legalise booking fees, but the rule has not changed.
Lewis Chong
REN 69566 · IQI GlobalProperty advisor helping KL, JB, and Penang buyers make data-backed property decisions.
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Confirm whether the unit is a licensed HDA new launch or a private subsale — the rules differ completely.
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On a new launch, refuse any request for payment before the statutory sale and purchase agreement is signed.
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Remember Regulation 11(2) binds the developer, the agent and any lawyer holding money as stakeholder alike.
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Expect 10% of the purchase price to fall due on signing the statutory agreement, not before.