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Tuesday, 25 November 2014

House buyers, learn your rights

I RECENTLY moved into our new house in Sungai Ramal Dalam. I bought the property back in 2012 and we received the vacant possession in January this year.

The journey towards moving into this property has not been a smooth one and I thought I should share some of the lessons.

When I first visited the site in 2012, only the show house was available for viewing. All the other units were blocked off because they were still under construction.

So the purchase was under the “sell-then-build” scheme. The developer sells a property that is not yet built, and the buyer pays for something depicted by the show unit, but in reality you don’t really know what you will get. The developer advertised it as a gated and guarded community of just 26 houses, and the show unit was quite decent.

We liked the concept and decided to go ahead anyway, despite a friend expressing doubts about the reliability of the developer because they are just a small company.

Skip forward to January this year: a letter arrived saying that the time had come for me to take the keys, or in jargon-speak, to take over the vacant possession. When I went to the developer’s office in Hulu Kelang, I was told to sign a letter confirming that I agreed to accept the property.

They also told me that the Certificate of Completion and Compliance (formerly called the CF) should be ready within two weeks and I should not do any renovation or move in before receiving it.

It was soon after this that problems started to occur. When I inspected the property more thoroughly, I discovered that the property was not yet satisfactorily completed.

Taps and doorknobs were missing. Some tiles were not properly fitted. The window frames were of different shades. Electrical sockets were not installed. The back garden slopes with a gradient that renders the area more or less unusable.

And the developer has not even applied for permission to build a gated and guarded community, despite advertising it in their sales brochure.

To make matters worse, the CCC did not arrive within the promised two weeks. I only received it last June. Throughout all this, I sent notice after notice to the developer asking them to rectify the defects.

They were extremely slow to respond. It was only then that I realised I should not have accepted the vacant possession without the CCC.

I then found the National House Buyers Association, and met with their secretary-general Chang Kim Loong who happens to be a fellow columnist in this newspaper. I learnt a tremendous amount from him and let me share some of the lessons here. If you are planning to buy a property and you don’t want to face the problems that I am having now, I suggest you read on.

Firstly when you buy a property, you should get the Sale and Purchase Agreement (S&P) checked by someone with proper knowledge, or appoint your own lawyer.

The two lawyers you deal with at the early stages represent your bank and the developer. They don’t represent you and they don’t have your interest at heart. You need your own lawyer.

Secondly, read the S&P yourself, carefully. With the benefit of hindsight, I am amazed at how I simply signed on the dotted line without reading the papers carefully first.

The document contains important information about your rights. And you should read it in greater detail if the developer says to you that the S&P is “just a formality”.

Thirdly, learn your rights as well as the procedures in the purchase.

If only I had taken some time to learn the ropes, I would have known that I should be extremely worried if a developer hands over vacant possession without a CCC (and promises you he will get it done within two weeks). Even more so when they start saying things like “we are all Malays and we should help each other”. Fourth, the sell-then-build scheme benefits mainly the developers and not necessarily the consumers. You are being asked to pay for something that is not even built yet and you never really know what you will eventually get. If the developer is rogue, then what you pay for is not necessarily what you will get.

In my case, the show unit has a concrete wall in the backyard, but my unit has just wire fencing. When I asked the developer, he responded that the S&P does not compel him to build a unit that is exactly the same as the show unit. Since it was a sell-then-build scheme, there is not much that I can do.

Recently Urban Wellbeing, Hou­sing and Local Government Minister Datuk Abdul Rahman Dahlan an­­­nounced that he wants to allow developers to choose between sell-then-build and build-then-sell. He is effectively doing a U-turn because the previous minister wanted to make build-then-sell compulsory.

Of course, developers love the sell-then-build scheme because they get the cash in advance. Risks are transferred to buyers.

Fifth, despite the U-turn policy, the Housing Ministry is actually quite effective in dealing with consumer complaints. I have had a very good experience in dealing with the National Housing Department and the Tribunal for Homebuyer’s Claims (TTPR). The processes to submit a claim through the TTPR are simple enough to understand even for a layperson like me. The TTPR is also very transparent.

My case hearing was conducted in public and if you go to the tribunal’s website, you can find information about the claim that I filed. This transparency allows everyone to learn from the experience of others.

Let me end by saying that buying a house is probably the most expensive purchase you will ever make. You really should learn your rights.

If you find yourself dealing with a situation like I am in now, then you must not let the developer off the hook. Get advice from the brilliant team at the National House Buyers’ Association. Take the developer to the TTPR. And report them to the National Housing Department.

You should not despair because there are mechanisms to help protect you, including those instituted by the Government, as long as you are willing to take the initiative.

Think Liberally by Wan Saiful Wan Jan

Wan Saiful Wan Jan is chief executive of the Institute for Democracy and Economic Affairs ( The views expressed here are entirely the writer’s own.

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