First, Know Which Rules Apply: Resale Deposits Versus New-Project Booking Fees
Whether a booking deposit on a Malaysian property is refundable depends on what kind of property you are buying, what you have already signed, the nature of the payment, and why the deal did not go through.
Resale transactions can set their own deposit and refund terms in the offer document. Residential projects that fall under the Housing Development (Control and Licensing) Act 1966 (HDA) and its regulations, on the other hand, follow a statutory payment schedule. Paying a few percent to “hold” a unit is not a practice that automatically applies to every type of property purchase.
This article covers general residential transactions in Peninsular Malaysia. Auctions, commercial property, and transactions in Sabah and Sarawak follow their own separate systems.
Resale Deposits: Check How the Amount Is Credited Against the Price
In the resale market, it is common to pay an earnest deposit of about 2%-3% of the price upfront, then top up to a combined 10% when signing the Sale and Purchase Agreement (SPA). This is market practice rather than a fixed rule — the exact amount and timing are still set by agreement between the parties.
For example, on a RM1,000,000 property, if you pay RM30,000 upfront and the agreement specifies a combined 10% by the time the SPA is signed, the amount due at signing is RM70,000, not a further RM100,000.
Paying 10% by the signing stage does not mean you only need to budget 10% in total cash. If your bank only approves a 70% loan, you still need to cover the rest of the price plus transaction costs yourself. Treat the deposit, the signing payment, and your final down-payment budget as three separate figures to check.
You Can Already Be Bound Before the SPA Is Signed
A Letter of Offer, Offer to Purchase, or Booking Form is not necessarily just a non-binding expression of interest. The content of the document, whether the seller has accepted it, and how both sides have behaved can all affect whether a binding contract has already come into existence.
So the assumption that “I can still walk away any time before the SPA is signed” is not reliable. Before paying anything, have your own lawyer, one representing you rather than the seller or the developer, review the document, in particular the deadline for signing the SPA, the refund conditions, and how a breach is handled.
Likewise, a line stating that a deposit is non-refundable cannot be read in isolation from the law that applies and the actual facts of the case to conclude that the deposit can be kept in full regardless of the reason.
Loan Rejection and State-Consent Rejection Are Not the Same Refund Situation
In a resale transaction, a rejected loan application does not automatically create a right to a refund. If completing the purchase depends on securing a specific loan amount, that financing condition needs to be negotiated and written into the agreement before signing, not raised only after payment has been made.
| Situation | What to Confirm in the Document First |
|---|---|
| Loan rejected or loan amount insufficient | Whether there is a financing condition, the minimum loan amount, and the deadline for applying and submitting proof |
| State consent not granted | Whether consent is a condition precedent to completion, who is responsible for applying, and the refund/deduction arrangement |
| Seller fails to perform | What remedies the buyer can take, and how the deposit is refunded along with any other agreed terms |
| Buyer changes their mind or misses a deadline | Breach notice requirements, the cure period, and how the deposit is treated |
| Both parties agree to cancel | A written termination document, the refund amount, and the payment date |
When making a payment, also confirm who the payee is, which account it goes to, and who is holding the funds. If an agency or law firm is holding the money, find out when they are allowed to release it to the seller, and get a receipt.
HDA-Regulated New Projects Cannot Simply Copy the Resale-Style Booking Fee
For residential projects that use the statutory-form SPA, the applicable regulations prohibit collecting payments outside the statutory sale and purchase payment schedule, including sums collected under names such as “booking fee” before the SPA is signed. The fact that this is common market practice does not make it a lawful procedure.
If you have already paid but have not yet signed the SPA, keep the booking documents, receipts, and any correspondence. If the developer refuses to refund this kind of payment, you can file a formal complaint with the relevant authority. The specific refund and recovery route still depends on confirming whether the transaction is governed by this regulatory regime.
Misunderstandings Worth Clearing Up
“The Bank Rejected My Loan, So the Deposit Must Be Refunded”
In a resale deal, this depends on whether a financing condition was written into the document and whether you followed the required process. A bank’s rejection by itself does not override the refund clause.
“The SPA Is Not Signed Yet, So There Is No Contract”
Once an offer document has been accepted, a binding contract may already exist. Do not judge this purely by the document’s title.
“Booking Fees Are Common for New Projects, So They Must Be Allowed”
Market practice and statutory rules are two different things. Residential projects regulated under the HDA must follow the applicable payment rules regardless of common practice.
What to Do Next
If you are about to pay, first confirm the type of transaction, the payment arrangement, and how a failure to secure a loan or state consent would be handled. Only decide whether to sign and pay once those conditions have been settled in writing.
If you have already paid and the deal has run into a problem, gather every signed document, proof of payment, and the dates of any notices, then have a lawyer assess the basis for a refund and the response deadline. Do not rely solely on an agent’s summary that a refund is “usually given” or “never given.” Deposit rights and contract terms should be confirmed by a lawyer representing you.
FAQ
Is a Property Deposit Always 2%-3%?
No. That is a pattern seen in resale transactions, not a statutory percentage that applies to every property, and it cannot simply be carried over to HDA-regulated new projects.
If I Top Up to 10% When Signing the SPA, Does That Mean I Only Need a 10% Down Payment?
Not necessarily. How much cash you ultimately need depends on the actual loan amount you secure, plus stamp duty, legal fees, and other costs.
What Should I Check First to Know If a Deposit Is Refundable?
Start with the type of transaction, the nature of the payment, the signed terms, and the reason for the cancellation, then confirm whether notice was given and proof submitted within any required deadline.
Disclaimer
This article provides general transaction information focused on residential property purchases in Peninsular Malaysia and is not legal or financial advice. Refunds, breach, and payment liability depend on the applicable law, the signed documents, and the facts of each case. Information verified as of October 6, 2026.
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Sources
- KPKT/JPN — Frequently Asked Questions for Homebuyers: Pre-Signing Booking Payments and Complaints
- Johore Bar — Housing Development (Control and Licensing) (Amendment) Regulations 2015 — Explanatory Note, Section 3
- RDS Law Partners — Legal Effect of a Letter of Offer: Binding Agreement or Mere Proposal?
- Kuek, Ong & Associates — 買二手房要注意什麼？
