Adam purchase a condominium unit from developer at the price of RM1,000,000.00. The developer’s representative inform Adam that the purchase price shall be paid to the developer progressively throughout the 3 years construction period and in accordance with the construction progress.

In view of that, Adam intends to apply for credit facility to finance 80% of the purchase price, i.e. RM800,000.00, in order to save interests costs to the bank.

Adam plans to pay RM100,000.00 with his saving for deposit upon signing of the sale and purchase agreement; thereafter, the bank to come in and finance the 80% purchase price progressively. At last, Adam to pay the remaining 10% with his saving during the 3 years construction period.


In the event, there is a difference between the purchase price and the bank loan amount, the bank shall only release the loan sum and finance the purchase after all the differential sum has first been settled.

In Adam’s case, if he is applying for 80% loan, Adam needs to first settle the 10% deposit and the following 10% progressive payment. The bank will only come in and finance the final 80% of the purchase price.

So, how much did you know about this Legal Myth?

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