The Key Players in the Life of
a New House Buyer
04/11/2006 By National House Buyers Association
Published in Iproperty Magazine
Purchasing a home to most of us is the most important decision in our life.
You dream of the years of enjoyment and the comfort of being a house owner.
The process of purchasing a home can either be enjoyable or a nightmare.
Spending all your free time visiting show rooms, property fairs, browsing
the ads, and checking sites, applying for a loan, looking for a lawyer,
dealing with all the paperwork can be extremely stressful and frustrating.
Suddenly, you will be dealing with a whole team of unfamiliar faces related
to your house purchase.
One of the first steps that you will help ease your mind is to familiarize
yourself to the key players at this time of your life.
This article is meant for buyers of 'buying-off-plan" housing units. Here is
a list of key players who will become part of your life for sometime, some
more obvious than others:
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 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 sale and purchase agreement, the licensed housing developer is
called the "vendor" and the land owner, the "proprietor". The sellers do not
actually build the house for you, but purchase the land or enter into a
joint-venture with the land owners, apply for permits / licences and manage
the construction and develop the site. In most cases, you do not actually
get to meet the sellers themselves but their sale representatives which
could be real estate agents or staff employed by the company. Ensure that
whatever you have negotiated with the sales representatives are in black and
white in written form to protect your interest.
The Laws
Although, this has never been the priority of potential house buyers, it is
wise for house buyers 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 sale and purchase agreement, 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 typed property (apartment,
condominium, town houses etc) buyers should also get a copy of the Strata
Titles Act, 1985 (Amended 2001) for your role and obligation as a parcel
owner. Keep up with changes or amendments to laws that might affect you.
Know well the Ministries that oversee the relevant laws to know where
complaints should be forwarded to.
For buyers of completed units, the terms and conditions of the contract of
sale is open to negotiation between the contracting parties.
Appropriate Authority
Appropriate Authority means any authorities eg. Local Council, Land Office,
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.
Bridging Financier
If the Vendor has taken credit facilities to finance the project, the land
would be charged and thus, '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 their
registered address or you can find them 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 to be disclaimed/discharged from foreclosure by the bridging financier
in the event 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 pay such redemption sum directly to the bridging
financier either in one lump sum or progressively thereof.
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 is 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
This is probably the first time in your life that you will be needing the
service of one. 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 if you have opted to
appoint 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.
Architects
Architects play an important role in the building of your new home. You do
not actually get to meet them in person except for seeing their signatures
in the completion of every stage of the construction and when the project is
certified completed.
Contractors & Trades Contractors
Contractors are employed by the housing developers to build and complete the
project. Usually house buyers never pay attention to them except when there
is complaint on defects or shoddy workmanship.
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.
