Get rid of 1% fee - Ministry to see if administrative charges can be waived

The Star 25/09/2001 By Angela Rao

THE Housing and Local Government ministry will carry out a study to determine if the one per cent application charge imposed by property developers on house buyers before the strata title is issued can be waived.

Deputy minister Datuk M. Kayveas said the fee should only be imposed on purchasers who intended to sell the property before the strata title had been issued.

"The present situation where developers, who   have yet to apply for strata titles, are charging buyers with the percentage for up to ten years is unacceptable," he said after meeting Palm Court Condominium Owners and Resident's Association representatives.

Kayveas said buyers have to pay one per cent of the purchase price as administrative charges for every sale transaction. He said a time frame for the charge has to be identified and fixed and should be reflected in any new Sales and Purchase (S&P) documents in the future.

"This means that if the house buyers want to sell the property before the titles are issued, they have to pay the administrative fees but after that, it will not be necessary," he said. The fee is imposed even for refinancing facilities.

In the case of the Palm Court residents, who only received a Certificate of Fitness (CF) in November 1999, ten years after moving in, they have yet to obtain their strata titles.

In June, a representative of  the developer, Ramal Properties Sdn Bhd had told the residents at a meeting that the company had paid the surveying fees recently and had applied for the issuance of the titles. 

But the buyers have had to pay the administrative fees over the last 12 years as a result of the delay.

"Obviously, the developer does not want to lose this additional and substantial income by applying for the CF and Strata Title, especially since there are 600 units involved," said association vice-president B. Muralidharan. He urged the ministry to step in and expedite the issuance of the titles as well as review the maintenance charges.

Kayveas said developers were not allowed to increase or fix the maintenance charges without consulting the residents.

He said the ministry was in the process of completing a proposal to force developers of condominiums, apartments and flats to hand over the maintenance responsibility to the residents themselves.

"It is about 50% ready and should be approved by the end of the year.

After that, all the developers in this category would have to relinquish maintenance duty to the owners.

"This is basically due to the fact that we have received about 80% per cent complaints on poor maintenance by developers," he said.

Kayveas said the problem arose from the fact that developers were not experienced enough to handle maintenance issues or were cash strapped by their other projects that they did not pay enough attention to the property.

He said once the law was implemented, the present system where residents were allowed to form their own management committees after being issued the Strata Title will no longer be used.

"Once the resident's association has been formed, the developer has to hand over the property to the residents for maintenance with a fund to kick off," he said.