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Getting to know you
01/07/2003Published in Malaysian Business - Housing & Property By National House Buyers Association
THE process of purchasing a home
can either be enjoyable or a nightmare. Suddenly, you will be dealing with a
whole team of unfamiliar faces relating to your house purchase. If you are
buying your housing units off-the-plan, one of the first steps that will
help ease your mind is to familiarise yourself to the key players involved
in the process:
THE BUYER
That means you, the purchaser, without which there will be no sale. Know
that you are called different names in different documents. In the sale and
purchase agreements (SPA) stipulated in Section 11 of the Housing
Development (Control & Licensing) Regulations, you are known as the
`purchaser'. Under Part VI (Tribunal for Homebuyer Claims) of the same Act,
you are known as the `homebuyer', which only also includes first subsequent
purchaser. If you are a purchaser in a building intended for
subdivision, under the Strata Titles Act you are one of the `parcel
proprietors'.
THE SELLERS
In your SPA, the licensed housing developer is called the `vendor' and the
land owner, the `proprietor'. The sellers purchase the land or enter into a
joint-venture with the land owners and manage the construction. In most
cases, you meet the seller's sale representatives, who could be real-estate
agents or employed staff. Ensure whatever you have negotiated with the sales
representatives is in black and white to protect your interest.
The Laws
Although, this has never been the priority of house buyers, it is wise to be
familiar with the legal aspects of acquiring property. You should get a copy
of the Housing Development (Control & Licensing) Act, 1966 (Amended 2002),
within which your purchase from a licensed housing developer is governed. If
you have never seen the stipulated SPA, look into Schedule G (for land and
building) and Schedule H (building intended for subdivision) for the terms
and conditions that apply to you, too.
Strata-type property (apartment, condominium, town houses etc) buyers should
also get a copy of the Strata Titles Act [1985] for your role and obligation
as a parcel owner. Keep up with changes or amendments to laws that might
affect you. For buyers of completed units, the terms and conditions of the
contract of sale is open to negotiation, subject to the Contracts Act.
THE APPROPRIATE AUTHORITY
This means any authority for the time being authorised under any written law
in force in West Malaysia to approve subdivision of land, building plans,
the issue of documents of title and to enforce any other laws related
thereto; and includes any corporation or private agencies licensed by the
appropriate authority to provide electricity, telephone, sewerage services
and other related services.
THE BRIDGING FINANCIER
If the vendor has taken credit facilities to finance the project, the land
would be `encumbered'. The bridging financier is the bank and/or financial
institution that provide the credit facilities. Your contract of sale would
have the name of the bridging financier and its registered address, or you
can find out from the developer's advertisement on `encumbrance' section.
There is a redemption sum on each unit if the land is encumbered that the
vendor has to pay in order for your unit not be foreclosed by the bridging
financier in case the vendor defaults on the loan.
Where you are concern, the vendor is obliged to give you a copy of the
redemption statement and undertaking letter from the bridging financier, and
should authorise you to progressively pay such redemption sum directly to
the bridging financier.
THE END FINANCIER
This is the lender who will be lending you the money to buy your house. Most
financing are typically repaid in 15 or 30 years. That's how long your
relationship will be with your financier, too. Understand that your contract
with your financier, although related to your property purchase, is an
entirely separate one. Should the housing project that you have signed on
fail to be delivered, you will still be committed to the loan contract,
unless you have clauses to safeguard against fail projects.
THE LAWYERS
Compared to the other housing related professionals, you will probably be
talking to a lawyer face to face. Understand that there will be a team of
lawyers - the licensed housing developers' panel of lawyers, the financiers'
panel of lawyers and your own. Most people are intimidated with busy lawyers
and are afraid to ask question or waste their time. Remember, you are paying
for their services. Find out beforehand what the lawyers are supposed to do
for you.
THE VALUERS
The end financier will have to inspect your property, which you offer as
collateral for loan purposes. The valuation report is usually done by the
bank's approved valuers. The inspection is only for the bank's internal
administrative purposes.
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