The practice of offering "free legal fees" as a promotional incentive in the real estate market is not as straightforward as it may seem.

Typically, this offer implies that the developer will cover the legal fees associated with the sale and purchase agreement (SPA).

However, it is important to understand that this does not include additional expenses like stamp duties, search fees, registration fees, printing charges, and document costs, which the buyer is still responsible for.

In reality, the concept of "free legal fees" in the housing industry is often misunderstood.

When developers make this offer, they usually recommend a law firm from their panel to handle the SPA and related transactions. The same law firm is also tasked with handling the loan documentation.

If the buyer chooses this recommended law firm, the developer will supposedly cover the legal fees. However, it's important to note that in this arrangement, the law firm primarily represents the developer's interests and not the buyer's.

This means that the buyer does not have a dedicated solicitor to protect their rights and interests in the agreement.

Many buyers only realize this when a dispute arises with the developer and they seek assistance from the solicitor, only to find out that the solicitor is actually representing the developer's interests.

In essence, the buyer is left without legal representation.

If the buyer decides to appoint their own solicitor who is not on the developer's panel, the offer of "free legal fees" is affected.

In this scenario, the buyer's solicitor will review the SPA on their behalf and act in the buyer's best interest. However, this means that both the developer and the buyer will have separate solicitors, each with their own associated fees.

If the buyer is unrepresented by a solicitor in the SPA, the offer of "free legal fees" is not truly "free" since the buyer does not have legal representation and therefore has no legal fees to pay.

To complicate matters further, developers often argue that the offer of "free legal fees" is contingent upon the buyer choosing a solicitor from the developer's panel.

This raises questions about the legitimacy of the offer, and developers may face legal repercussions for misrepresentation and damages if they refuse to pay for the buyer's legal representation.

Under the Legal Profession Act 1976, it is stated that a solicitor who acts for the developer in a housing property sale must not act for the buyer in the same transaction. Additionally, the SPA stipulates that both the developer and the buyer are responsible for their respective solicitor's costs.

Considering these legal provisions, one must carefully consider the implications of the developer's offer of "free legal fees."

Disclaimer: The following information is provided solely for general knowledge. DWG Malaysia Sdn Bhd assumes no responsibility or liability for the information's accuracy, adequacy, or reliability. This includes any warranties or representations regarding the suitability of the information for any specific purpose to the maximum extent allowed by law. While every reasonable effort has been made to ensure the information's accuracy, reliability, and completeness at the time of writing, it should not be solely relied upon for making financial, investment, real estate, or legal decisions. It is strongly recommended to seek advice from a qualified professional who can consider your individual circumstances and provide personalized guidance. DWG Malaysia Sdn Bhd disclaims all liability for any actions taken based on the information provided.

Featured