Booking Fee Refundable? TPC – Practice Q14


Can I get back my booking fee (earnest money)? When a purchaser offers to buy a property from a vendor (seller) in a subsale. He puts his booking fee (usually RM5K or RM10k) or about 5% of property value.


This question has a Yes and No answers. It depends on the condition set in the booking of the deal. Below are two scenarios.

YES Scenario: When a booking fee is given based on a condition. That condition is unmet, the booking fee is refundable. Common example is when it is subject to loan approval, and the loan is rejected, the booking fee is refundable.

NO Scenario: When a booking fee is give without condition. That it is unconditional, it means it is already a contract. A contract is formed, any breach means compensation is a form of discharging a contract (by frustration). Common example is when I pay booking fee to watch a movie, but I failed to present when the movie is shown. I won’t be entitled to refund (unless specifically stated).

When the buyer changes his mind, the booking fee is forfeited to the seller. Only when the loan is conditional to the agreement, that there is no contract. The booking fee is refundable.