The RM150,000 That Isn't In The SPA

Red flags, in order of weight:

1. A request to declare a price different from the true price - that is a false document being created at the buyer's request.
2. Cash, RM150,000, to a third-party 'project account' unconnected to the seller on the title.
3. Deposit paid by a company that is not the buyer, with a vague family explanation.
4. Nominee shareholder structure for a foreign buyer.
5. Buyer linked to a high-risk jurisdiction.
6. A principal applying pressure to skip steps.

That is not one flag; it is a pattern, and it triggers enhanced due diligence rather than standard checks.

CDD and EDD steps:

• Identify and verify the buyer - passport and proof of address for the individual, and for the Sdn Bhd: certificate of incorporation, constitution, directors' resolution authorising the purchase, and the identity of the beneficial owner behind the nominee. A nominee's name is not the answer; the question is who ultimately owns and controls.
• Verify the payer. Who is the Labuan company, who controls it, and is it authorised to pay RM42,500 for this buyer? Obtain a written third-party payment declaration, the company's ownership details and the signatory's authority.
• Source of funds and source of wealth for both the deposit and the balance, with documents - sale of an earlier property, bank statements, corporate accounts, not verbal assurances.
• Screen all parties, beneficial owners and the Labuan company against sanctions and PEP lists; identify any politically exposed person and apply EDD with senior management approval.
• Independently search the Labuan company and the Sdn Bhd on the relevant registers.
• Write it all down as it happens. Record retention is a statutory obligation, and a file that shows a well-documented decision to pause is a defence; a file that shows nothing is a finding waiting to happen.

Ad valorem duty on the transfer (current scale: 1% on the first RM100,000; 2% on the next RM400,000; 3% on the next RM500,000):

At the declared RM700,000:

• RM100,000 × 1% = RM1,000
• RM400,000 × 2% = RM8,000
• RM200,000 × 3% = RM6,000
• Total = RM15,000

At the true RM850,000:

• RM100,000 × 1% = RM1,000
• RM400,000 × 2% = RM8,000
• RM350,000 × 3% = RM10,500
• Total = RM19,500

The under-declaration understates duty by RM4,500 before any penalty. Duty is chargeable on the price or the market value, whichever is higher, and LHDN can raise its own assessment on valuation - so the saving is not merely temporary, it is the trigger for an inquiry.

The negotiator's position - refuse, and be able to prove it. Preparing or facilitating an SPA at a figure known to be untrue is not a drafting preference; it is assisting the making of a false statement to the revenue, and it contaminates the agency's own file. Add the downstream damage: the loan is sanctioned on a misstated price, so the buyer is exposed to the bank, and the RM150,000 cash trail is precisely the kind of unexplained movement that money laundering controls exist to catch.

Say it in writing: 'I cannot act on an instruction to prepare or forward documentation at a price that does not reflect the true consideration.' Send it to the principal, not just to the buyer, and keep it. If the instruction is repeated after that, the firm's continued involvement is a decision the principal must own in writing.

Report. Estate agency firms are reporting institutions under Malaysia's anti-money laundering regime and must submit a suspicious transaction report to the Financial Intelligence Unit at Bank Negara Malaysia when they know, suspect or have reasonable grounds to suspect that property or proceeds are linked to unlawful activity. There is no threshold and no requirement to be certain. Tax evasion and a false instrument are predicate offending; the cash-to-a-third-party structure, the nominee, the third-party payer and the high-risk jurisdiction all feed the suspicion. Report promptly, through the firm's nominated compliance officer if one exists, and keep a copy.

Do not tip off. Telling the buyer, the seller, or the principal that a report has been made is itself an offence. Your note to the principal should be confined to the compliance decision - 'I am not able to continue to act on this instruction' - without announcing what has been filed and with whom.

Do not destroy or tidy the file. Do not backdate, re-write your earlier note, or 'regularise' documents after the fact. If you have already been overruled, the file should show exactly who instructed what, and when you objected.

Consider your own position. Remaining the negotiator of record on a transaction you believe is being documented falsely exposes you personally as well as the firm. The practical options are to withdraw from the transaction in writing (with the reason recorded internally) or, at minimum, to have no involvement in the price, the documents or the payment instructions. Then escalate to the principal registered estate agent in writing if you have not already; if the principal is the problem, the compliance route and the Board both exist for exactly this situation.

The examinable line: you do not need proof, you must not announce the report, and 'my boss told me to' is not a defence for a negotiator who knew.