A teacher, who took out a government loan to buy a home in the controversial Majestic Heights project, was shocked to find herself saddled with loan repayments of over RM400 a month when work on her unit had not started.

The teacher, who bought a RM69,900 unit in Phase 2B of the project, said the Treasury's Housing Loan Division disbursed two payments totalling RM55,920, or 80% of the purchase price, in February 1999.

"At that time, I thought the project was proceeding well and it was all right for the funds to be released.

"I only realised things were not quite right in March this year on receiving a copy of the Treasury's instruction for deductions from my pay from this month onwards," she said.

She said it was surprising that the division had released 80% of the loan in the absence of appropriate documentation.

"I also want to know why the payments were made in two lump sums instead of in stages as per the schedule of payments, which is the usual practice," she added.

It is understood that the teacher's lawyer had requested in January 1999 for the release of RM10,485, or 15% of the loan, representing payment for completion of stage 2(f) of the project.

The request was accompanied by a copy of the architect's Nov 9, 1999 letter certifying that the block concerned was completed "up to" stage 2(f).

The Malaysian Board of Architects had since ruled that the certification was not in order.

When contacted, a Treasury officer said the 80% was released because the division had received a copy of the architect's letter.

"We thought all the earlier stages were also completed and released the full 80% when it should only have been 25%--the 10% due on signing of the sale and purchase agreement and 15% for stage 2(f) alone.

"The lawyer should have realised the mistake and refunded the money to us instead of keeping quiet," he said.

The division, he said, would be writing to the lawyer to see if the money had been paid to the developer and to ask for a refund.

He added that deductions from the teacher's salary would only be made for the 25% that should have been released.

Other purchasers of the project facing problems with their loans can contact call Lim ( 016-4210738), Lean ( 012-4766235) or Ciah ( 012-2820619).