Some Important Aspects for House Buyers
Before you
decide to buy a house, ensure that:
- The housing developer has a license and it is still valid.
- The housing developer has an advertisement and sales permit
and it is still valid.
Determine the House Type
For landed property such as bungalows, semi-detached houses and
terrace houses, the expected date of completion is 24 months from
the date of signing of the Sales and Purchase Agreement.
For subdivided building such as condominiums, flats, apartments
and townhouses, the expected date of completion is 36 months.
Buyers are advised to obtain from the housing developer the
complimentary brochures with all the pertinent information about the
project such the development's licence number, and advertisement and
sales permit.
Land Status
Please ensure whether it is:-
- Freehold land - it is in perpetuity
- Leasehold land – check the number of years left
- Malay Reserve
* The status of the land can be checked at the Land Office or
the State Land Registrar.
Brochure Information
Brochures are given free by the developers. Please ensure the
brochure has the following information:-
- The Housing Development’s License number and the expiry date;
- The advertisement and sales permit number and the expiry date;
- Name and address of:
- the licensed housing developer
- authorised agents (if any)
- those holding power of attorney (if any)
- the project management company (if any)
- Land status
- Freehold
- Leasehold – number of years left
- Encumbrances – whether the land has been mortgaged to the
bank for a loan
- Location description
- building material specification
- size of building
- amenities/services
- Name of housing project (if any);
- Expected date of completion;
- Price of each type of house;
- Number of units for each type;
- Reference number of the approved building plan and name of the
local authority.
::: The rights of buyers must be understood as contained in the
Sales and Purchase Agreement as per schedules G and H of the Housing
Development (Control and Licensing) Regulation 1989.
First Payment
The first payment of 10 per cent must be made upon signing of the
Sales and Purchase Agreement. Please ensure the date of signing of
the SPA and the date of first payment are the same.
Be aware that the housing developer is not allowed to collect any
form of payment without a Sales and Purchase Agreement being
signed.
Architect Certification
Make sure any demand by the developer for instalment payment is
supported by a certificate duly signed by an architect or a
certified engineer.
Interest on Late Payment
If the buyer or end financier for the buyer fails to pay the
developer the progressive payment/instalment within 21 working days
from the date of the written notice of payment from the developer,
the buyer will be charged an interest of 10 per cent per annum on
the instalment not paid.
Termination of the Sales and Purchase Agreement
Be aware that failure to make the progressive payment or interest
charged on late payment for a period of more than 28 days will give
the developer the right to terminate the Sales and Purchase
Agreement. The developer must serve the notice in writing by AR
registered post of its intention to terminate the SPA.
Infrastructural Maintenance Fee
Buyers must pay the cost of maintaining the infrastructure from the
date of vacant possession till the date the responsibility is taken
over by the local authority or management corporation (in the case
of a subdivided building).
Infrastructure is defined as:
- For land and building - Road, driveway, drains, sewerage,
pipelines and sewerage tank for the housing development
- For subdivided building - Road, driveway, drains, sewerage,
pipelines and sewerage tank for the building
Maintenance and Management Fee
From the date of vacant possession the buyer shall be responsible
for paying for services such as:-
- For land and building
- Refuse removal, upkeep of drains and grass-cutting on the
road reserves.
- The buyer is responsible for such payment until such
responsibility is taken over by the proper authority.
- The buyer must pay a six months’ deposit upon being handed
vacant possession for the services to be rendered. After six
months, if the services are still not taken over by the relevant
authority, any subsequent payment shall be payable on a monthly
advance.
- For subdivided building
- Payment is for the cost of maintaining and managing the
common area and payment starts when vacant possession is handed over.
- The buyer shall pay one (1) month’s deposit and three (3)
months’ advance in respect of the maintenance service charges
and any payment thereafter shall be payable on a monthly advance.
- Maintenance fee must be paid to the developer from the date
of vacant possession up until the formation of a management
corporation under the Strata Title Act 1985.
- Once the management corporation is formed under the Strata
Title Act 1985, maintenance services will be handled by the
management corporation and the buyer must pay the maintenance
fee to the management corporation and not to the developer.
*Reminder:- Maintenance fee must be paid as long as the buyer owns a parcel in the said maintained building.
Sinking Fund (For subdivided building only)
The buyer shall upon the date he takes vacant possession of the said parcel contribute to the sinking fund an amount equivalent to 10 per cent of the service charges.
The buyer shall pay one (1) month’s deposit and three (3) months’ advance in respect of the service charges to the sinking fund and any payment thereafter shall be payable on a monthly advance.
Payment of Quit Rent, Rate Assessment, etc
From the date of vacant possession or date of assignment, whichever
is earlier, the buyer is responsible for the quit rent, assessment,
rate payment and other charges relating to the property bought.
Vacant Possession
Vacant possession on the building complete with water and
electricity connection must be handed over within 24 calendar months
from the date of signing of the SPA for landed property and 36
calendar months for subdivided building.
Regulation and Rights of House Buyers during the Handing over of
Vacant Possession Ensure the property is free from any encumbrances
before accepting notice of vacant possession.
If the developer leases the land or the property, the developer
must settle the balance payment before handing over vacant
possession.
Conditions that must be followed by housing developers:-
- Certificate from the developer’s architect stating that:
- the building is completed
- water and electricity are ready for connection
- The developer has applied for:
- the issue of the Certificate of Fitness for Occupation (CFO)
through Form E *
- the local authority has issued a notice stating that Form E
has been checked and accepted by the relevant authority.
* Form E is an application from the developer’s architect to the
relevant authority for the issue of the CFO.
The buyer is entitled to enter into occupation of the property
only upon issue of the CFO by the relevant authority and renovation
may be carried out only upon issue of the CFO and approval of the
plan by the relevant authority.
While inspecting the building, any defect is recorded and handed
over to the developer to be rectified. Make sure you obtain a copy
of the report.
The buyer is entitled to claim for late delivery from the
developer.
Damages
If the developer fails to deliver vacant possession of the building
as stipulated by the SPA, it must pay damages calculated on a daily
rest, 10 per cent per annum of the purchase price.
Defect Liability Period
The defect liability period is 18 months after the date of vacant
possession.
Creation of Management Corporation for Subdivided Building
A management corporation will be created once the strata title of
each individual parcel is issued to the owners.
Other functions of the management corporation include insuring
and maintaining the building.
For further enquiries or complaints, you may contact:
Monitoring & Enforcement Division,
Ministry of Housing
& Local Government,
Level 3, Block B North, Pusat Bandar
Damansara,
50782 Kuala Lumpur.
Tel: 03-2094
7033
Fax: 03-2092 5049
| This is a
division under the Ministry of Housing & Local Government
and it is responsible for the implementation and enforcement
of the provisions of the Housing Developers (Control &
Licensing) Act (Act 118)
|
| Note: CPRealEstate.com.my does not guarantee the accuracy of the information provided and holds no responsibilities for any mistakes made. |
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