Condo investors caught in a bind
The Star 2/4/2004 By Yip Yoke Teng
Instead of the profits they envisaged, investors in Anggerik Villa II in
Kajang are suddenly faced with hefty debts and even the possibility of
bankruptcy.
About 40 of the estimated 200 investors gathered near the condominium
block on Wednesday to highlight their plight to the press. With them was
DAP National Consumer Affairs Bureau secretary Khong Chee Seng.
According to Khong, the investors did not have to pay anything up front
when they bought the units.
All they needed to do was to present their identity cards and sign certain
documents.
“The management company promised that it would pay the instalments of the
bank loan taken by the investor, and had the option of buying over the
unit at market price after six years, and that it would make up the
shortfall if the market price was lower than the purchase price,” said
Khong.
“If the management company sold the unit, the profit from the sale after
deducting all expenses would be shared between the developer and investor
who would receive 80% and 20% respectively,” he said.
He added that the investors were given various perks, including immediate
investor’s profit of about RM10,000 and a two-night stay in the unit each
year.
Although the investors first thought the offer too good to be true, they
were convinced when they saw the terms stipulated in black and white in
the Management-cum- Investment Agreement shown to them together with the
Sale and Purchase Agreement. They thought they were protected by law.
They had a rude shock in the middle of last year when they received
payment reminders and lawyer's letters stating that they had failed to
settle the loan instalments and the bank wanted to recall the money.
“The management company didn’t pay the bank as promised, but the
responsibility will fall on the ones who signed for the loans – these
investors,” Khong said.
He said their loans exceeded RM200,000 each, which raised another issue -
why the units, which varied between 1,000 and 1,152 sq ft in size, could
range from RM88,000 to RM388,000.
The investors have had several meetings with the management company. In
one session, the company offered them a “Smart-Partnership Investment
Scheme”, spelt out in a letter, that suggested three remedial options
which the investors thought were “unreasonable” and “could hardly cover
the bank loans”.
“But there was also another letter from the developer stating that it
would reimburse the total amount of bank loan instalments paid by the
investors,” Khong said.
Photocopies of the relevant letters and documents were shown to reporters
during the meeting.
Most of the investors present were the developer’s former employees and
sub-contractors.
The group is calling on other investors to come forward by contacting
Khong at 017-878 2881 or Albert at 019-223 9623.
Meanwhile, Khong has requested the management company to explain the
situation and suggest possible solutions at a meeting at 7.30pm on April 5
at the Selangor Chinese Assembly Hall.
He will also try to arrange meetings with the bank, as well as the Kajang
Municipal Council to find out the basis on which the Certificates of
Fitness were issued to the condominium in 2002 when some storeys of the
building were not completed.
“We advise all house purchasers to buy only if they want to live there.
“Nothing comes free,” Khong said, adding that the matter would be brought
up in parliament next week. |
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