| 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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