What is the difference between a reservation form and a contract?

What is a reservation form?

A reservation form is the short document you sign to hold one named unit while the purchase is being prepared. It records the unit, the price agreed, the amount you have paid to hold it, and how long the unit stays off the market. It is a booking, not a sale: it does not transfer the unit, and it does not carry the full terms of the purchase.

What is the sale contract?

The contract is the sale itself. It sets out the price, the payment plan and its dates, the finishing level the unit is delivered in, the delivery year and the grace period attached to it, the maintenance terms, and what follows if either side does not perform. It is the document that binds you and the developer, and it governs the purchase from the moment both sides sign it.

Which document comes first?

The reservation form comes first. You sign it to take the unit off the market and to fix what you have agreed before the contract is drawn up. The contract follows, once the details of the purchase are settled. A reservation can be made before the contract exists; the contract cannot be written before the reservation identifies the unit.

What does each document record?

The form records one unit and one payment: which unit, the amount paid, what that amount is counted against, and the conditions attached to holding the unit. The contract records the whole purchase: the total price, every instalment and its date, the delivery year, the finishing level, and each side's obligations if something goes wrong. The form is a page or two; the contract is the document you keep.

What happens to the amount I paid when the contract is signed?

It is set off against the price written in the contract. It is not lost in the move from the form to the contract; it is counted as part of what you owe. The contract should record it as a payment received, so the balance you owe is measured from the full price less the reservation amount and any later instalments.

Does the contract repeat the terms of the form?

It should. The reservation form is the record of what you agreed, and the contract is where those terms become the purchase. Read the contract against the form: the unit, the price, the plan and the delivery year should match the form. Where they differ, raise the difference before signing rather than after; the contract is the document that will be enforced.

What should I check in each document?

In the form: that the unit and its number are the ones you saw, that the price is the price you agreed, that the amount and what it is counted against are written down, and that the developer named is the developer of the project. In the contract: the total price, the instalments and their dates, the delivery year and its grace period, the finishing level, and the maintenance terms. Ask for both in writing and keep a copy of everything you sign.

Where do I read the conditions for my unit?

In the reservation form for that unit, in the contract that follows it, and in the developer's own terms for the project. The contract is where the conditions of the purchase are written, and it can later be recorded in the real estate registry. The reservation itself is dealt with on its own page. Ask the sales team to put the terms in writing before you pay.