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Information pays

25/10/2003 Published in NST-PROP A Buyer Watch Article by National House Buyers Association

 

Buyers who invest in the knowledge of how to purchase properties can avoid pitfalls

 

Caveat emptor, or "Buyer beware"! This is the axiom in commerce that means buyers alone are responsible for assessing the quality of their purchases before making payment.

 

How true is this in the property sense? It works well for buyers of completed units, but not if you buy based on plans, where construction has yet to be completed and there is nothing for you to inspect or assess yet.

 

But while, caveat emptor does not apply to "yet-to-be-built" properties, another maxim that is pertinent is: "Investment in knowledge pays the best interest".

 

Nobody is born with the knowledge on  how to buy properties, but once it is acquired, the world of homeownership can be entered with greater confidence.

 

In the quest for enlightenment, there is some homework for you to do, and these are some sources of information you can turn to:

 

A housing developer's headquarters or its branches

Here, you can:

a) Ascertain whether a developer has a valid developer license as well as a permit to advertise and sell properties, which is issued by the Ministry of Housing and Local Government. After that, you should check with the ministry on the validity periods of both documents; and

b) Check the financial status of a developer; its directors and its audited financial statements.

 

It is compulsory for a developer to display such information at its headquarters and branch offices as stipulated under Section 7(b) of the Housing Development (Control & Licensing) Act. Take note that the law does not include temporary sales booths.

 

From a land Office/State Registrar's office

Background that can be gleaned from these two Government departments include:

a) A land's proprietor;

b) The land's usage and any restrictions in interest it might possess;

c) The land title, and whether the tenure is freehold or leasehold, and if the latter, the date of its 

expiry; and

d) Whether the land is mortgaged to a financial institution

 

From the local authorities

Details that can be viewed include:

a) A project's approved plans;

b) Its approved overall layout plan;

c) Its approved building plan; and

d) The developer's submission of Borang "E", which is the application for Certificate of Fitness for Occupation

 

From the Ministry of Housing and Local Government's website (www.kpkt.gov.my)

From the comfort of a home or office PC, you have access to:

a) A developer's details;

b) A project's details;

c) Progress details;

d) Statistics; and

e) A host of frequently asked questions on purchasing and related problems.

 

The website requires a fair bit of navigation to get the information, but to be fair, the site's administration has done a good job of keeping the information up-to-date.

 

A word of caution though: When it comes to sizing up a developer, you may not be able to undertake a comprehensive background check, especially since it is common practice for many outfits to form a new private limited company for every project they undertake. As such, one big name may have many subsidiaries, which you will need to know to assess the group's reliability.

 

From the Ministry of Land and Cooperative Development's website (www.ktpk.gov.my)

The only thing that might be of interest to you here is a guidebook on management corporation which can be downloaded to acquaint yourself with the manner in which stratified properties will be run after issuance of strata titles.

 

Information service

Despite the availability of all the above-mentioned resources, there are still a lot of purchasers who don't have he confidence to make an informed purchasing decision.

 

Gauging from the number of queries we at the HBA have been receiving, answers to a multitude of questions are still lacking.

 

In this digital age, it is high time the authorities create a convenient one-stop portal containing guidelines, warnings, black-listings and other important information for all to see.

 

Once buyers are armed with this powerhouse of knowledge, they will be able to make acquisitions with conviction and accelerate the flow of transactions, which is good for the overall economy.

 

So far, the failure of various Government agencies, authorities and ministries to provide such a portal has made the public rely largely on word-of-mouth, gut instinct and face value in order to assess whether a developer will deliver a property in the manner, style and timeliness as promised.

 

Help from HBA

 

To help buyers ask the right questions before purchasing their homes, we at the HBA have published a "House Buyers Guide Book" containing nuggets of valuable information. In it, we explain to you your rights as buyers, and your need to be vigilant to avoid future pitfalls.

 

We also participate in seminars and dialogues, hold regular meetings with many groups of disgruntled house-buyers, help in the formation of pro-tem committees and resident associations as well as conduct house-buying workshops, one of which was held in Kuala Lumpur last Sunday.

 

By adopting a pro-active attitude, we hope to inspire a population of informed and astute buyers who will not fall prey to errant developers.

 

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