Compromise payment plan
NST 05/09/2005

KUALA LUMPUR. Sun.- Fed up with shoddy treatment by housing developers, house buyers have come up with a proposed payment system dubbed the "10-90" model.

Under it, developers can lock in buyers by requiring them to pay a 10 per cent down payment on signing the sale and purchase agreement.

The money will be deposited in an independent account and developers are not allowed to touch it until the project is completed, when buyers will be required to pay the remaining 90 per cent within three months.

National House Buyers Association (HBA) vice-president Brig-Gen (R) Datuk Goh Seng Toh said this was a compromise between the current model and the "ideal" build-and-sell model wanted by house buyers.

The sell-and-build model requires house buyers to pay for their properties via progressive payments as the project reaches different stages of construction.

As for the build-and-sell model, purchasers will pay for their houses only when construction is completed.

Goh said that in the 10-90 models, developers who failed to deliver the houses on scheduled should be allowed an additional grace period of three months.

"If developers still fail to come up with the houses, buyers should be given the option to withdraw their 10 per cent down payment and collect any additional interest incurred," Goh told a Press conference yesterday.

He added that there was a need to depart from the sell-and-build system as buyers often risked like defective houses, late delivery and abandoned projects.

Last year, 227 housing projects, worth RM7.3 billion and involving 50,813 buyers, were abandoned.

Goh said that with the 10-90 models, developers would be compelled to maintain a high standard on their products.

Last year, Prime Minister Datuk Seri Abdullah Ahmad Badawi suggested that the build-and-sell concept be adopted by the housing industry to reduce the number of abandoned housing projects.

This concept is not new in the country, as some developers have opted for this scheme.

However, industry players are against the move, arguing that the country's economy is not ready to al-low for the immediate implementation of the concept.

Real Estate and Housing Developers' Association Malaysia (Rehda) president Datuk Jeffrey Ng Tiong Lip said such a move would curtail new housing and cause property prices to spiral.