Buyer Guide
The ministry of Housing and Local Government, which overseas a large portion of matters pertaining to the property industry, has come out with guideline for house buyers. Martin S checks out some of the important aspects prepared by the Monitoring and Enforcement Section of the Ministry which was explained to the public at length by its officials during MAPEX 2004
Firstly, before you decide to buy a house you must ascertain that the housing developer:
• has obtained a valid Developer’s license; and
• a valid Sales and Advertising Permit
Know the Category of Housing and Time for completion:
The Sale and Purchase Agreement (S & P) for landed e.g. bungalows, semi- .detached and terrace houses must state completion within 24 months from the date of signing the S&P.
The S&P Agreement for subdivided buildings such as condominiums, flats, apartment and townhouse must state completion within 36 months from the date of signing S&P.
Buyers are advised to obtain free brochures from the developer for full information on the project including particulars of the license, permit, etc.
Land Title:
Ascertain if the housing developer is the proprietor of the land. If he is not the proprietor, he has to execute an agreement with the proprietor to the effect that the proprietor agrees to the sale of the land for the purpose of the housing development concerned and he is a party to the contract of sale of the housing accommodation. Check if there are any registered interests e.g. lease, charges, easement, etc. Check if separate individual titles have been issued and liase with the financial institution that you intend to take your loan.
Tenure of Land:
• Freehold
• 99 years lease (check the expiry date of the lease)
• Malay Reserve
Obtain Information From Housing Developer:
• Free brochure on the housing project
• Note specifications on building materials
• Sample Sale & Purchase agreement
• Building area
• Location of houses to be constructed
• Expected date of completion
• Note condition of site such as hilly, former mining land or swampy land
• Reference number of approval of building plans by local authorities
Rights and Interest of Buyers under S & P Agreement:
The Sale & Purchase Agreement must comply with the standard agreement as in Schedule G & H of the Housing Developers (Control & Licensing) Regulations 1989. Buyers must read and understand the contents of the Sale & Purchase Agreement before signing it.
First Payment:
The buyer must sign the S & P Agreement at the time of the first payment of 10 percent of the purchase price to the developer. Ensure that the date of the first payment and the date of the S & P Agreement are the same. Developers are prohibited from collecting any payment in whatever form without a S & P Agreement having been signed.
Architect’s Certification:
Every notice requesting for payment shall be supported by a certificate signed by the developer’s architect or qualified engineer.
Interest on Late Payment:
If the buyer or end financier of the buyer fails to settle the installment within 14 days after its due date, the buyer shall be liable to pay interest to the developer ;calculated from day to day at the rate of 10 percent on the unpaid installment.
Determination of Agreement:
You are reminded that failure to pay any of the installments and interest due for any period exceeding 28 days, the developer may terminate the S & P agreement. The developer shall send notice in writing by A.R. Registered Post of this intention to terminate S & P agreement.
Maintenance & Management Fee:
The buyer shall contribute towards maintenance charges such as refuse removal, upkeep of public drains and grass-cutting on the road reserves as from the date of delivery of vacant possession for landed property and as from the date of issuance of strata titles and the formation of the Management Corporation.
Payment of Quit Rent, Assessment, Etc.:
As from the date of S & P Agreement, the buyer shall be responsible for the payment of quit rent, assessment rates and other charges on the subject property.
Vacant possession of the building with water and electricity ready for connection must be delivered within 24 calendar months from the date of the agreement (for landed property) and 36 months (for subdivided buildings)
Entry into Occupation:
The buyer is only entitled to enter into occupation of the property upon issuance of CFO by the relevant authorities. Renovations may only be carried out upon issuance of CFO and approval of the plans by the relevant authorities.
Payment of Damages:
If the developer fails to hand over vacant possession of the property within the
prescribed time (24 months from the date of the S&P Agreement for landed properties and 36 months for sub- divided properties), the developer shall pay immediately to the buyer liquidated ascertained damage to be calculated from day to day at the rate of 10 percent per annum of the purchase price.
Limitation:
The buyer must claim liquidated ascertained damages from the developer before the expiry of 6 years from the date of completion stated in the S&P Agreement in accordance with the Limitation Act 1953.
Defect Liability Period:
With effect from 1st August 1996, the defect liability period shall be 18 months from the date of delivery of vacant possession
Formation of Management Corporation:
A Management Corporation shall be formed by the buyers upon issuance of separate strata titles for the parcels and transfer into the buyers’ names.
Among other functions, the Management Corporation shall be responsible to insure and to maintain the building.
For Enquiries and Complaints, you may contact:
Monitoring & Enforcement Section Ministry of Housing & Local Government Block B, Level 3, Damansara Town Centre 50782 Kuala Lumpur
Tel No – 03 : 2092 4488 or 2099 8381
Fax No – 03 : 2092 5909 or 2092 5807
Website: www.kpkt.gov.my
E-mail : enforcement@kpkt.gov.my
Prepared by:
Control & Enforcement Section,
Ministry of Housing & Local Government,
Block K, Level 4, Pusat Bandar Damansara,
50782 Kuala Lumpur.
Note: The ministry says that this is only a guide and cannot be used as reference material or evidence in court
