New clause on end-financing in S& Ps soon

The Star 22/05/2001By Clarence Chua

Kuala Lumpur: It will soon be mandatory for sales and purchase agreements to have a clause telling purchasers to consult their end-financiers before buying a house.

Deputy Minister of Housing and Local Government Datuk Peter Chin said amendments had been drafted to include such a clause because many house buyers had signed the sales and purchase agreement without having the finances to pay for their houses.

"The buyer will face hardship if a loan cannot e secured but if he consults an end-financier, like the bank on his financial status, he would know whether he has the means to buy the property.

"He could then get a letter from the bank and show it to the developer. If he is eligible he can sign up for the house. This is to avoid future disputes," he told reporters after launching the Real Estate and Housing Developer's Association Directory yesterday.

He said this when asked whether it was sufficient for developers to be only morally obliged to tell buyers they could get an extension on making the progressive payments of units that were already under construction.

In an article yesterday, The Star had quoted House Buyers Association (HBA) secretary-general Chang Kim Loong as saying that many buyers were unaware that they had to settle their dues immediately after they sign the sales and purchase agreement.

He said that they could end up paying interest for settling the progressive payments late, adding that developers were not obliged to tell the buyers that they could ask for an extension of time.

"We have had a series of discussions with Rehda and other representatives. We think that a formula can be worked out to the satisfaction of both developers and house buyers," said Chin.