Buyers have to pay four months’ service charge now

02/12/2002 The Star By Foong Pek Yee
 

PETALING JAYA: Property buyers will now have to pay four months of service charge upfront, of which three months are in the form of advance payment and the remainder as deposit under the Housing Developers (Control and Licensing) (Amendment) Act 2002 which took effect yesterday. 

The subsequent monthly service charge must also be paid in advance and the ruling applies to properties which had their sale and purchase agreements signed yesterday and thereafter. 

Monthly service charges are imposed on flats, apartments and condominiums and some landed properties which have common areas. 

A statement issued by Housing and Local Government Ministry legal adviser Shamsulbahri Ibrahim and advocate and solicitor Teh Sek Hock said the new ruling was among amendments made to the S & P agreements. 

It said it was common for developers to encounter problems over the collection of service charges from buyers and this was the reason for the three months’ service charge to be paid in advance by buyers. 

It said service charges are defined as money meant for the general maintenance and management of the common property and also other services that the developers have agreed to provide. 

Besides the service charges, buyers also have to pay to a sinking fund or special accounts to meet major liabilities such as painting and repainting of common property, acquisition of movable property for use in relation to the common property or the renewal or replacement of any fixtures in the common property. 

Prior to the amendments, developers had the liberty of imposing the number of months of advance payment, with some up to six months or more while there were those who did not collect any such advance payment. 

The Act specifies that all notices for payments of service charge must be supported by a service charge statement in which the relevant particulars of the services to be rendered and the relevant amounts to be paid for such services are clearly stated. 

The Act also allows developers to appoint a qualified person or agent to provide the maintenance and management services. 

Developers have to provide buyers with copies of the annual audited accounts for the sinking fund.