But what if fate takes a turn for the worse and an investment turns bad? There is only so much care and steps a purchaser can take to ensure that his investment will be a good one.

While most purchasers end up with good or reasonable deals, some end up with duds or encounter numerous hassles in getting defects and other problems rectified by the developers.

Laura Lee was taken up by a housing project in an upcoming area as it was a good address and was undertaken as a joint venture between two public-listed companies.

"What could go wrong?" she asked herself repeatedly before deciding to sign on the dotted line.

Although it looked like there were no glitches as the unit was delivered on time, Lee discovered she had no running water the day she got her keys and the Certificate of Fitness (CF).

Call it teething problems but Lee’s woes were about to get worse. Upon closer inspection, she found the beam in her kitchen lop-sided, as were all the doors in the house.

Seeking advice from a professional body, Lee found that it would not be possible to rectify the beam problem.

"It was also a time when I had urgent family matters to attend and could not find the time to get the developer to rectify the problems," she says.

So her property remained ‘untouched’ for a couple of years and was left vacant. Although Lee is partly to blame for not seeking relief immediately, she considers herself lucky when she contacted the developer recently and they offered to discuss buying back the unit from her.

Rodney Yap was however not so lucky. Taken in by the pricing of an apartment unit and its location, Yap signed the papers and began servicing a housing loan with the interest rate at a high 13%. That was seven years ago and till today, Yap and 400 other Purchasers are still stuck with an incomplete project.

"We were so close," he tells Property Plus.

His unit in the fi rst block was already 95% complete when the developer went into liquidation.

Asking him about recourse gets Yap upset as he says he has none. This is because the property has a commercial title.

"I was taken by the serviced apartment idea and now realise that this does not fall under the Housing Developers Act," says Yap.

But the project has been rescued by another company and they are asking purchasers to fork out an additional 15% of the purchase price to complete the project.

"I have no choice but to pay up, on top of servicing my bank loan of around RM1,000 a month," says Yap, adding that he never thought this would happen as the previous developer was working on another large project in the same vicinity.

That project was also abandoned.

So, what can go wrong? A lot.

But that should actually not deter prospective purchasers from buying a home.

In Lee’s case, there is always the option of selling the property, perhaps at a loss, rather than living with a poor investment choice.

Vincent Ng, chief executive offi cer of Kim Realty, advises house buyers to have a realistic outlook when trying to rid themselves of a property they are not happy with.

"They must realise that they cannot win all the time. We had a customer who had been trying to sell her unit for over a year. No one was interested because she wanted the market rate and the unit faced a construction site and was noisy and dusty. We proposed that she renovate, partly furnish and try to rent it out. We also cautioned her that rental would not match the going rate but at least, she had a better chance to securing a tenant," says Ng.

With ‘problematic’ units, Ng suggests owners try to rent them out instead, but they must accept that they will not be able to fetch market rates.

"The first thing purchasers must realise is that they have made an unwise choice. They must fi rst admit this and take remedial action to minimise their losses. Most often, the purchasers are not willing to lose out and instead, hang onto the units. This causes even further damage as the price will depreciate even further. When they finally decide to let the units go, they try to sell it at cost price or the market rate," he adds.

Ng says the margin of a loss is really dependent on the urgency of the situation and how desperate the owners are. Remedial action can be taken if the defects are minor.

However Ng admits defeat when the problem lies with an unbearable hindrance that is an eyesore, such as a highway or a cemetery beside the unit.

Charlie Chan, chief executive officer of SK Brothers Realty, has a more direct approach.

“For those who have decided to back out on their purchase, they should just forfeit the 10% downpayment. This should cut down the complications that might arise should they keep hanging onto the unit," says Chan.

Furthermore, a property under construction is very difficult to sell.

And many developers are not very helpful when it comes to the transfer of the property because they do not want to upset the bumiputera and non-bumiputera quotas they have to adhere to, Chan explains.

His other suggestion is for purchasers to rent out units they are unhappy with.

"In the market today, putting up a classi fied ad and hoping for a miracle no longer happens. It would be better to employ real estate agents that cover and know your area well."

Another way is for the house buyer to approach the developer as they would have a list of interested buyers and approach these people, suggests Chan.

However, Chan feels that most house buyers would have thought long and hard before arriving at a decision to purchase a property as it is a long-term investment.

Once that decision is made, a major problem is they expect to make a large profit almost immediately.

Chan cautions that some investments may look like bad choices initially, but five to 10 years later, they turn out all right.

Take the example of the SS2 residential area in Petaling Jaya. It used to be surrounded by rubber trees in the early days.

Today, property prices there have increased manifold and buyers who hung on to their units have reaped substantial profits.

Another example is the shophouses in Taman Connaught, Cheras that are enjoying a boom in property prices and rentals now.

Chan emphasises that the property sector is extremely dynamic.

But some buyers are unhappy because they expect immediate capital appreciation.

He says, "Get expert advice before committing to a purchase and do some research about the area. They should know that property is a medium- to long-term investment. Land for development is a fixed commodity but the population keeps increasing. So, prices of property can only move one way… up. At the end of the day, those who are patient reap the most profits. "

For those who have made a poor choice and ended up with a house full of defects or worse, stuck with an abandoned project, what can they do?

Dr G Parameswaran, the Housing & Local Government Ministry’s Monitoring and Enforcement Division director, says purchasers should approach it with their problems.

He assures them that the ministry will try to resolve their woes.

After a complaint is lodged, it will act on it and play the role of mediator or facilitator depending on the situation.

Its role includes getting the different parties together to find an amicable solution.

For an abandoned project, the ministry will try to revive it by getting another developer to complete it.

He advises buyers to check with the relevant authorities, such as the land office and municipal council, on matters pertaining to the land beside the development area.

This will ensure that they know what the environment surrounding their residential development will be like upon completion.

There are times when buyers are faced with technical problems such as structural defects, bad quality and piping problems.

In such cases, Parameswaran says the best thing to do is to refer to the parties that certified the unit fit for occupation.

"The Vacant Possession and CF cannot be issued until the unit if deemed fit for occupancy. If house buyers are not satisfied with the quality of the workmanship, then they should refer to the developers to resolve the matter."

Another matter that buyers must be aware of are their legal rights, he adds.

"If the developer is unable to deliver the unit in accordance with the stipulated date in the SPA, house buyers can always fi le complaints with the Housing Tribunal and seek compensation," says Parameswaran.

The National House Buyers Association (HBA) is a body to which house buyers can turn to.

Chang Kim Loong, its honorary secretary-general, encourages buyers to approach it when they encounter problems or need advice.

If a buyer has been misled, steps can be taken to protect his interests.

"There are three options. The house buyer can lodge a complaint with the ministry that will then take the necessary steps. Another more costly and time-consuming method is to bring the developer to court. This is only encouraged if the buyer wants to terminate the agreement with the developer and seek compensation. Another option is to approach the Housing Tribunal to sort out the matter," explains Chang.

What steps to take?

Errant developers have garnered much limelight in the news lately. While the Housing and Local Government Ministry must be commended for its efforts to track down and act against irresponsible developers, the real victims may be forgotten.

These are the house buyers who have invested much time and money in failed projects.

And what about those that have made a poor choice in the selection of their properties and ended with poor buys? What recourse do they have? Dr G Parameswaran, the Ministry’s Monitoring and Enforcement Division director, says the problems of house buyers range from abandoned projects to late delivery.

"Housing developments are an important component in the construction industry. The ministry recognises its contribution to the economic wellbeing of the country. Therefore, developers have to respect their boundaries and responsibilities. The ministry wishes to see healthy growth to the industry," he adds.

Parameswaran assures that the division will take steps to fi nd solutions to house buyers’ woes.

All a purchaser has to do is to lodge a complaint with the ministry. The ministry will tr y to resolve complaints lodged as soon as possible.

He stresses that it tries to serve the public even if a matter is outside its jurisdiction.

Once a complaint is lodged, it will look into it and refer to the sale and purchase agreement (SPA).

It will also do a site visit and call in the developer and other parties (such as the land offi ce or local council) to find a solution.

"We want to protect the interests of house buyers and are aware of the status of the housing developments. Once the developer has obtained its licence, the ministry is constantly checking up on the development to monitor the progress so that any untoward incident can be prevented," says Parameswaran.

He also urges the cooperation of NGOs such as the National House Buyers Association, Malaysia, to provide support and constructive suggestions to the ministry.

House buyers can contact

 • The division at Level 3, Block B North, Pusat Bandar Damansara, 50782 KL or call 03-2094 7033.

• Tribunal for Home Buyers Claims is at Level 2, Block B South, Pusat Bandar Damansara, 50782 KL or call 03-2092 4488.

Joining forces

The National House Buyers Association (HBA) is set up to provide voluntary and free service to the public and holds a meet thepublic session on Saturdays where a group of professionals offer advice and assistance on queries and problems.

Chang Kim Loong, honorary secretary- general of HBA, advises buyers to refer to the Housing and Local Government Ministry with their complaints and grouses.

He adds that a project is deemed abandoned by the ministry when no development work has taken place for six consecutive months or more after the expected date of completion.

He advises house buyers to form a group of fi ve to 50 people facing similar problems and lodge a complaint with the ministry.

A stronger voice will attract more attention.

According to Chang, buyers should study the Sales and Purchase Agreement (SPA) thoroughly to avoid any untoward incident.

For example, they should study the layout plan so that they are aware how the development will turn out and what the surrounding land is gazetted for.

A plan of the township can also be obtained from the local council.

"It is a sad thing that we do not have proper approved guidelines for construction standards. At the end of the day, when the developer hands over the unit and the house buyer fi nds the workmanship unsatisfactory, it is a very grey area," adds Chang.

When faced with this, he advises buyers to refer to the SPA and engage a professional inspector to provide a report before bringing the developer to court.

Chang cautions that this legal process is not only lengthy, but costly as well.

A shorter and more effective method is to approach the Housing Tribunal.

Depending on the seriousness of the matter, the tribunal can resolve a matter within three months.

The HBA can be reached at 31, Level 3, Jalan Barat, off Jalan Imbi, 55100 KL or 03-2142 2225.

Before purchasing a property

Some useful tips and information to assist buyers before making a purchase:

• Ensure the developer has a licence, advertisement and sales permit that is valid

• The first payment of 10% must be made upon signing the Sales and Purchase Agreement (SPA) and the date of signing and the date of first payment must be the same

• If the developer fails to deliver vacant possession of the building as stipulated by the SPA, it must pay damages calculated on a daily rest, which is 10% per annum of the purchase price.

• For landed properties, the expected date of completion is 24 months from the date of signing of the SPA. For subdivided buildings, the expected date of completion is 36 months.

• Buyers can check on the background of a developer. For details, go to www. kpkt.gov.my