Developers must bear installation costs for utilities
NST-PROP 24/04/2004 By Nicholas Mun

Buyers who have been requested to pay installation costs over and above the deposits for the connection of water and electricity supply to their new houses can refuse to do so as these sums should be borne by developers.

According to National House Buyers Association secretary-general Chang Kim Loong, such costs must be borne by the developer as provided for under the standard Sale and Purchase Agreement (SPA) set out in the schedules of the Housing Development (Control and Licensing) Act 1966.

"Very often, you find vendors/developers saying that the contractors of the utilities companies were the ones demanding the 'additional payments' to facilitate the installations. It may be a case where developers may be merely attempting to pass the buck to naive and unsuspecting buyers," he said.

Chang, however, said the nominal stamp duty should be borne by buyers and not by developers.

"This 'hasil setem' which is rated at a nominal RM10 is imposed on contracts between two or more parties, which in this case is the Supply Contract between the owner and Puas Bhd and the Electricity Contract with Tenaga Nasional Bhd. As such, the stamp duty must be borne by the owner," he explained.

A lawyer who spoke on condition of anonymity shared Chang's views, saying that the stamp duty is payable to the Government and is not a sum that a developer profits from.

He explained that buyers' reluctance to pay for it may stem from their reading of the SPA which states that the buyer is only liable to pay 'within 14 days' the deposits for the installation of water, electricity and gas meters, and that the Vendor shall bear all other costs, if any.

"The stamp duty is Government revenue, so buyers shouldn't quibble over it, especially when it is such a small amount," he added.