Pitfalls of buying a model house
By Salleh Buang
THERE is a strong urge bordering on an irresistible compulsion for people
with money and no patience to buy an existing model house, also called a
show house, built by a housing developer on the occasion of the launch of
a new project, or a new phase of a project.
Buying a show unit means having the advantage of seeing
what you purchased, unlike throwing down a hefty deposit on a house which
has yet to be built - and not knowing for certain whether it will indeed
be built and completed on the agreed date.
And if you also take into consideration the number of
delayed and abandoned projects around the country, buying such a property
might make you feel that you have really made a wise move, because the
element of uncertainty about completion has been removed from the
equation. There is, unfortunately, a dark side to such a
purchase-something that most people
do not realise or anticipate.
For 29 year old Teoh Boay Lian, that small error in judgment on her part
has become a never-ending nightmare. Teoh did not realize when she bought
her bungalow show house for over
half a million ringgit some three years ago that the property had only
been given "a year's permit" by the Seberang Perai Municipal Council.
She was not aware when she signed the sale and purchase
agreement that the developer had not submitted any building plans for the
show unit to the local authority. She subsequently discovered that in the
absence of approved building plans, the show house "could not be issued"
with a certificate of fitness of occupation (CF).
According to her, she was assured by the developer that
when she signed the sale and purchase agreement the CF would be issued
within three months. Now, three years later, the CF has yet to be issued,
and Teoh does not know when, if at all, it can be issued so that she can
immediately move in to her home.
In the meantime, the property is no longer in its
former pristine condition. According to Teoh, cracks have appeared all
over the house, the floors have caved in and the beams are infested with
termites. In short, the condition of the house is rapidly deteriorating
and immediate remedial action is needed to arrest its decay.
Despite all this, Teoh is not too concerned with the
condition of the house. What she wants is for the developer to hand over
the house in good condition with the CF, or failing that to refund her
Most people would regard Teoh's problems as being
merely a personal matter between her and the developer. She had made an
error in judgment in purchasing the show unit possibly without getting
adequate advice, and she now has to pay for her mistake.
I would beg to differ. To me, it is more than a mere
breach of contract. It is also more than just non-compliance or
contravention of the Housing Developers (Control and Licensing) Act 1966,
a law passed by Parliament with the salutary objective of protecting
purchaser's interests or the non-compliance or contravention of our
Beyond all these legal considerations, I think it
raises a more fundamental issue - a question of attitude. It raises a
question of commitment. It also poses a question of professional
standards, a question of readiness in shouldering responsibility and
accepting blame - not just on the part of the developers, but also the
regulators (the local authority and the Housing Ministry), the financiers
(the bank who granted and released the loan) and the professionals who
were directly or otherwise engaged or employed in the transaction.
In time, I would imagine Teoh will resolve her
predicament, one way or another. But the question that begs to be answered
is whether developers, authorities, financial institutions and buyers have
learned anything from the fiasco and in the process, have taken steps to
instill in the housing industry a greater sense of moral responsibility
For the millions of would-be purchases out there, I
hope the answer will be a positive one.