Pay 10% of housing cost as deposit, proposes group

08/05/2004 The Star  By Jonathan Chew

Kuala Lumpur: The National House Buyers Association (HBA) has proposed a variant to the 'build-and-sell' concept, where buyers will pay 10% of the housing cost as a deposit for development of the project.

The developer will have no access to the payment, which would be held either by the developer's lawyer as the stakeholder or in a trust account, said HBA secretary-general Chang Kim Loong.

He said in the event the developer does not complete the project in accordance with the time frame permitted, the buyer would have the right to rescind the contract and have the deposit returned together with any interest accrued.

"The financing for construction is the responsibility of the developer and the buyer is only to seek his financial to seek his financial requirement to buy the completed house when it is ready for occupation," he told reporters at the HBA office here today.

Also present was HBA committee member Brig-Jen (Rtd) Datuk Goh Seng Toh, HBA adviser Datuk Seri Yuen Yuet Leng and HBA legal adviser Yong Yung Choy.

Chang, said this in response to recent comments made by developers that the 'build-and-sell" concept was not economically viable at the moment.

He acknowledged that an absolute 'build-and-sell" concept, as first suggested by Prime Minister Abdullah Ahmad Badawi, would be too big a paradigm shift and industry players may not be receptive to it.

"However, we see this concept as a fair, equitable and practical variant of the absolute build-then-sell concept.

"With this system, we believe more people will be attracted to buy houses and this will also benefit developers," he said.

Chang, refuted arguments made by developers that adopting the concept would reduce the production of housing and lead to higher prices.