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Clarify house buyers' fees

 03/12/1999  NST Editorial Voice

Problems aplenty await the prospective buyers in search of a house. They crop up and get into headaches and heartaches of various kinds. Initially, he has to negotiate through the maze of basic issues such as affordability and the locality of the dwelling that is within his means. These determinants restrict his options. Even when he has found the house he can afford to buy and in a location from which he can commute to work, he has to entangle the web of legal fees he should actually pay to obtain the documents of ownership.

House buyers, unless they are conversant with the rules governing conveyancing, do not really know their rights. This innocence is invariably exploited, resulting in so many instances where the purchaser pays lawyer's fees, some or much of which he is not legally obliged to pay. Most pay up; The most recent caught the attention of the Bar Council which through its Conveyancing Practice chairman declared on Wednesday that solicitors acting on behalf of developers are not allowed to charge property buyers for the issue of Sale and Purchase agreements.

The complaint was simple. The buyer was asked to pay RM150 by the developer's solicitors for "printing and photostating" costs of preparing the Sale and Purchase document. The council responded by warning solicitors that it was unlawful to charge separate fees for preparing the agreement, over and above he scale of fees they were entitled to. The Bar's advice has been swift and would be welcomed by not only the complainant but also by al house buyers. But we access the council has only addressed a specific complaint, not the larger issue of the legal fee obligations of the house buyer.

We, as well as some buyers, know that in the sale and purchase of houses, the developer is legally bound to absorb the solicitor's fees and all other costs in preparing and executing the S & P agreement. The purchaser, to protect his rights, has only to pay fees of his lawyer. Why then is the Bar Council's silent about many advertisement placed by developer that enticed buyers with the lure legal fees are "waived" or "free" legal services? Surely such inducements are tantamount to no more then pulling wool over prospective buyers' eyes.

Surely then the Bar Council, elected by the legal fraternity which is bound by a code of ethics, would be beholden to educate buyers on their legal fees obligations, not to mention their rights in purchasing a house. This is a long existing lacunae in the rules that the govern sale and purchase agreement.

We have a standard S&P document. Perhaps the time has come for appendices to be dovetailed to it. One should spell out the specific fee obligations of the vendor and purchasers. It should explain the cost of the transaction of houses, of which in the market are two. The first,  and most common, involves a developer and the buyer of a unit in a housing project in various stages of planning or development. The second negotiation brings together the vendor of a completed and often lived-in dwelling and a purchaser. The legal obligations as well the cost, involved in the two transactions differ for the vendor and the purchasers. The other appendix should be the scale of fees,  including the cost of various disbursements solicitors could charge. Both would help the buyer to verify the legal fees he should pay.

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