House Buyer's Guide

Source: Reapfield

House Buyer's Guide

(Excerpt obtained from the Ministry of Housing and Local Government)

Some important aspects for House Buyers

Before you decide to buy a house, you must ascertain that the housing developer:

• has obtained a valid Developer’s Licence; and
• a valid Sales & Advertising Permit

Know the category of housing

The Sale & Purchase Agreement (S & P) for landed property must state completion within 24 months, e.g. bungalows, semi-detached and terrace houses.

S & P Agreement for subdivided buildings such as condominium, flats, apartment and townhouse must state completion within 36 months.

Buyers are advised to obtain free brochures from the developer for full information on the project including particulars of the licence, permit, etc.

Land Title

• Separate individual title;
• Strata title

Status of Land

• Freehold
• 99 years lease
• Malay Reserve

Obtain Information from Housing Developer

• Free brochure on the housing project
• Note specifications on building materials
• Sample sale & purchase agreement
• Building area
• Location of house to be constructed
• Expected date of completion
• Note condition of site such as hilly, former mining land or swampy land
• Reference No. of approval of building plans by local authorities.

Rights and Interest of Buyers under Sale and Purchase Agreement

The sale & purchase agreement must comply with the standard agreement as in Schedule G & H of the Housing Developers (Control & Licensing) Regulations 1989.

First Payment

The buyer must sign the S & P Agreement at the time of the first payment of 10% of the purchase price to the developer. Ensure that the date of the 1st payment and the date of the S & P Agreement having been signed.

Architect’s Certificate

Every notice requesting for payment shall be supported by a certificate signed by the developer’s architect or qualified engineer.

Interest on late payment

If the buyer or end financier of the buyer fails to settle the instalment within 14 days after receipt of the written notice, the buyer shall be liable to pay interest to the developer calculated from day to day at the rate of 10% p.a. on the unpaid instalment.

Determination of Agreement

You are reminded that failure to pay any of the instalments and interest due for any period exceeding 28 days, the developer may terminate the S & P Agreement. The Developer shall send notice in writing by A.R. Registered Post of his intention to terminate S & P Agreement.

Maintenance & Management Fee

The buyer shall contribute towards maintenance charges such as refuse removal, upkeep of public drains and grass-cutting on the road reserves as from the date of delivery of vacant possession for landed property and as from the date of issuance of strata titles and the formation of the Management Corporation.

Payment of quit rent, assessment, etc.

As from the date of S & P Agreement, the buyer shall be responsible for the payment of quit rent, rates, assessment and other charges on the subject property.

Vacant possession of the building with water and electricity ready for connection must be delivered within 24 calendar months from the date of the agreement (for landed property) and 36 months (for subdivided buildings)

Application for certificate of Fitness for Occupation

At the time of delivery of vacant possession, the developer must have applied for CFO from the relevant authorities (Form E of UBBL)

Entry into Occupation

The buyer is only entitled to enter into occupation of the property upon issuance of CFO by the relevant authorities.

Renovations may only be carried out upon issuance of CFO and approval of the plans by the relevant authorities.

Payment of Damages

If the developer fails to hand over vacant possession of the building/parcel within the prescribed time (24 months from the date of the S & P Agreement for landed properties and 36 months fro sub-divided properties), the developer shall pay immediately to the buyer liquidated damages to be calculated from day to day at the rate of 10% p.a. of the purchase price.

Claim for damages & time limit

The buyer may claim damages from the developer before the expiry of 6 years from the date of vacant possession in accordance with the Limitation Act 1953.

Defect Liability Period

With effect from 1 August 1996, the defect liability period shall be 18 months from the date of delivery of vacant possession.

Formation of Management Corporation

A Management Corporation shall be formed by the buyers upon issuance of separate strata titles for the parcels and transfer into the buyers’ names.

Among other functions, the Management Corporation shall be responsible to insure and to maintain the building.

Enquiries & Complaints

You may contact:

Control & Enforcement Section,
Ministry of Housing & Local Government,
Block K, Level 4, Pusat Bandar Damansara,
50782 Kuala Lumpur.

Tel: 603-2094 7033
Fax: 603-2094 9720

This section is a division under the Ministry of Housing & Local Government and is responsible for the implementation and enforcement of the provisions of the housing Developers’ (Control & Licensing) Act 1966 (Act 118).

Prepared by:

Control & Enforcement Section,
Ministry of Housing & Local Government,
Block K, Level 4, Pusat Bandar Damansara,
50782 Kuala Lumpur.

Translated by:

Housing Developers’ Association Malaysia for distribution to developers.