Show support for BTS, banks urged
NST-PROP 15/07/2006 By Hana Kamaruddin

Banks and financial institutions in the country have been urged to play a bigger role in supporting the Build-Then-Sell (BTS) mode of housing delivery, now that the Government has approved the 10:90 variant of BTS to run in tandem with the existing Sell-Then-Build (STB) system.

At a dialogue session with managers from banks and financial institutions in the country at Institut Bank-Bank Malaysia in Kuala Lumpur recently, the National House Buyers’ Association (HBA) said banks could also “encourage” builders who come to them for financing to adopt the 10:90 variant.

At the briefing by HBA vice-president Datuk Goh Seng Toh, secretary-general Chang Kim Loong and other officials, the association pointed out that the 10:90 variant will be a “safer bet” for banks as they will be dealing with developers with good financial positions and track records.

Developers will also become more committed to the industry, as they will have to use more internal funds for a project.

The collateral of a bank will also not be affected, Goh said, as the sale of units in a project will not be completed until Certificates of Fitness for Occupation (CF) or the Certificates of Completion and Compliance (CCC) are issued.

Another issue raised was problems arising from the present STB practice, such as the revival of abandoned projects.

Chang said under BTS, “banks will be able to revive and take over abandoned projects much quicker, and without having to deal with so many parties”.

Added Goh: “With 10:90, the financier will be able to operate in a more secure environment, because it will have absolute control over loan disbursement and full control of the collateral.

“End-financiers will also be more secure as they will only be financing completed properties with titles, as the system requires developers to have obtained all ownership papers on delivery of vacant possession to buyers in exchange for the balance of the purchase price.”