Questions You Should Ask Your Lawyer When Buying Property From A Housing Developer

Transcription

1 Questions You Should Ask Your Lawyer When Buying Property From A Housing Developer by Khairul Anuar bin Shaharudin How to choose the property? Decides what type of property lease hold/ freehold Bumi/ non-bumi: bumi sells to non-bumi(get consent from State Authority); responsibility of seller(not buyer)- Selangor is easier- seller just need to give a valid reason (medical, education) Sell to foreigner (non-resident): special consent needed 3 types: Gated, Guarded, Gated & Guarded Do a background check on the housing developer Not every developer is created equal More than 4 houses- get a developer license, since 2007, even less than 4 houses in a project, if it is for sale- will need the license HAD (housing development control and licensing Act)- check from government website the blacklisted developers Some developers sell landed properties- gated guarded- need Schedule H (Strata), not Schedule G (which is for individual title) Understand the cost of purchasing the property Purchase price 100% Recording : Page 1 of 5

2 Booking fee 2-3% (some are as low as RM500) 10% down payment 90% on a schedule (in Sales and Purchase Agreement) Legal fee- 25% discount required by Legal Profession Act, better to bear it so you have your own lawyer Disbursement- stamp duty, transportation, registration fee, misc Stamp duty: 1% RM100k, 2% RM200k-RM500k, 3%>RM500k Service charge & Sinking Fund What are other benefits when you purchase the property from that particular housing developer Club membership Gated and guarded community/ common facilities Type of property Land Landed property Strata property Gated & guarded property Buying from a developer How to choose a reputable property developer? Recommendations from friends Check the developer s website Read reviews of the developer Visit the completed property- ask the resident or management Protection under Housing Development (Control and Licensing) Act 1966 Schedule G (for landed property) & schedule H (for strata development- including landed property sold at strata) Schedule I (landed property) & Schedule J (strata property) (10:90 concept)- build then sellstart 2015 Issues when buying from housing developer Interest charged Vacant possession Landed property: 2 years Recording : Page 2 of 5

3 Strata property: 3 years Check the property- built according to the spec you get Warranty months Buying a completed unit from a housing developer No Schedule H & G protection Better get a lawyer before buying it Strata property (management of the property) Budget 2014 and its effect Raise the minimum price of property that can be purchased by foreigners to 1 million ringgit from 500,000 ringgit Real property gain tax (RPGT)- For gains on properties disposed within the holding period of up to 3 years, RPGT rate is increased to 30 percent. No more Developer Interest Bearing Scheme (DIBS) Hidden cost Itemize all costs of the purchase price Required by government Cancelling your purchase from a housing developer A) Before signing a Sale & Purchase Agreement Get back full refund of booking fee B) After the signing of a Sale & Purchase Agreement May lose 10% & get penalized if there is no valid reason Valid reason: cannot get loan Q&A Session 1. When the developer ignore the issue of strata title after completion of the project. What is the best recourse of the buyer? Have to go to the Kementerian Perumahan to complain about it Tribunal NGO- house buyer association Court- hire a lawyer 2. All fees to convert bumi property to non-bumi property to be bear by seller usually how much? And is it same from state to state? Recording : Page 3 of 5

4 Repaying the discount for bumi ( Johor 10%; other 5%) Some developers don t want to do it- cannot get allowance from state authority Consent cost- RM300 (not converting) 3. On selling from bumi to non-bumi, on average, how long does it take to obtain state approval or consent? How about extreme scenario? 3 to 12 months 4. Developer is bankrupt and under receivership- who then is responsible for getting the strata title for the house buyer? Receiver- doing whatever the developer supposed to be 5. I received the key to my landed house after 3 years delay. How do I proceed with the LDA as you mentioned earlier? However, if the company choose to go bankruptcy, how do I still proceed with the claims/ court case? The company which go bankruptcy is a subsidiary of a bursa listed company. If all mother company choose to wind up their subsidiary if a project is failure, how does the buyer get protected? Get a lawyer Get other house buyer together Listed company or not is not an issue 6. Currently the house pricing has been increased incredibly high, does that mean our own house value is also higher? Do you think there is any method to protest this increase? The increase is through market force Get the government to press housing developers to build more houses More property, less price The yearly house assessment is increasing: How house assessment is calculated? Rental, if rental is high, local authority increase the rate 7. Some developers charge admin fee on cancellation before signing SNP. Is this valid? It s up to them Recording : Page 4 of 5

5 Notes prepared by Teo Jin Jing. Your feedback on the notes prepared is welcome. Please to Thanks in advance. Recording : Page 5 of 5