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Getting to know you
01/07/2003Published in Malaysian Business - Housing & Property By National House Buyers Association

 

THE process of purchasing a home can either be enjoyable or a nightmare. Suddenly, you will be dealing with a whole team of unfamiliar faces relating to your house purchase. If you are buying your housing units off-the-plan, one of the first steps that will help ease your mind is to familiarise yourself to the key players involved in the process:


THE BUYER


That means you, the purchaser, without which there will be no sale. Know that you are called different names in different documents. In the sale and purchase agreements (SPA) stipulated in Section 11 of the Housing Development (Control & Licensing) Regulations, you are known as the `purchaser'. Under Part VI (Tribunal for Homebuyer Claims) of the same Act, you are known as the `homebuyer', which only also includes first subsequent purchaser. If you are a purchaser in a building intended for
subdivision, under the Strata Titles Act you are one of the `parcel proprietors'.


THE SELLERS


In your SPA, the licensed housing developer is called the `vendor' and the land owner, the `proprietor'. The sellers purchase the land or enter into a joint-venture with the land owners and manage the construction. In most cases, you meet the seller's sale representatives, who could be real-estate agents or employed staff. Ensure whatever you have negotiated with the sales representatives is in black and white to protect your interest.


The Laws


Although, this has never been the priority of house buyers, it is wise to be familiar with the legal aspects of acquiring property. You should get a copy of the Housing Development (Control & Licensing) Act, 1966 (Amended 2002), within which your purchase from a licensed housing developer is governed. If you have never seen the stipulated SPA, look into Schedule G (for land and building) and Schedule H (building intended for subdivision) for the terms and conditions that apply to you, too.


Strata-type property (apartment, condominium, town houses etc) buyers should also get a copy of the Strata Titles Act [1985] for your role and obligation as a parcel owner. Keep up with changes or amendments to laws that might affect you. For buyers of completed units, the terms and conditions of the contract of sale is open to negotiation, subject to the Contracts Act.


THE APPROPRIATE AUTHORITY


This means any authority for the time being authorised under any written law in force in West Malaysia to approve subdivision of land, building plans, the issue of documents of title and to enforce any other laws related thereto; and includes any corporation or private agencies licensed by the appropriate authority to provide electricity, telephone, sewerage services and other related services.


THE BRIDGING FINANCIER


If the vendor has taken credit facilities to finance the project, the land would be `encumbered'. The bridging financier is the bank and/or financial institution that provide the credit facilities. Your contract of sale would have the name of the bridging financier and its registered address, or you can find out from the developer's advertisement on `encumbrance' section. There is a redemption sum on each unit if the land is encumbered that the vendor has to pay in order for your unit not be foreclosed by the bridging financier in case the vendor defaults on the loan.


Where you are concern, the vendor is obliged to give you a copy of the redemption statement and undertaking letter from the bridging financier, and should authorise you to progressively pay such redemption sum directly to the bridging financier.


THE END FINANCIER


This is the lender who will be lending you the money to buy your house. Most financing are typically repaid in 15 or 30 years. That's how long your relationship will be with your financier, too. Understand that your contract with your financier, although related to your property purchase, is an entirely separate one. Should the housing project that you have signed on fail to be delivered, you will still be committed to the loan contract, unless you have clauses to safeguard against fail projects.


THE LAWYERS


Compared to the other housing related professionals, you will probably be talking to a lawyer face to face. Understand that there will be a team of lawyers - the licensed housing developers' panel of lawyers, the financiers' panel of lawyers and your own. Most people are intimidated with busy lawyers and are afraid to ask question or waste their time. Remember, you are paying for their services. Find out beforehand what the lawyers are supposed to do for you.


THE VALUERS


The end financier will have to inspect your property, which you offer as collateral for loan purposes. The valuation report is usually done by the bank's approved valuers. The inspection is only for the bank's internal administrative purposes.

 

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