Purchasing a home to most of us is the most important decision in our life. You dream of the years of enjoyment and the comfort of being a house owner. The process of purchasing a home can either be enjoyable or a nightmare. Spending all your free time visiting show rooms, property fairs, browsing the ads, and checking sites, applying for a loan, looking for a lawyer, dealing with all the paperwork can be extremely stressful and frustrating.
Suddenly, you will be dealing with a whole team of unfamiliar faces related to your house purchase.
One of the first steps that you will help ease your mind is to familiarize yourself to the key players at this time of your life.
This article is meant for buyers of 'buying-off-plan" housing units. Here is a list of key players who will become part of your life for sometime, some more obvious than others:
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 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.
In your sale and purchase agreement, the licensed housing developer is called the "vendor" and the land owner, the "proprietor". The sellers do not actually build the house for you, but purchase the land or enter into a joint-venture with the land owners, apply for permits / licences and manage the construction and develop the site. In most cases, you do not actually get to meet the sellers themselves but their sale representatives which could be real estate agents or staff employed by the company. Ensure that whatever you have negotiated with the sales representatives are in black and white in written form to protect your interest.
Although, this has never been the priority of potential house buyers, it is wise for house buyers 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 sale and purchase agreement, 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 typed property (apartment, condominium, town houses etc) buyers should also get a copy of the Strata Titles Act, 1985 (Amended 2001) for your role and obligation as a parcel owner. Keep up with changes or amendments to laws that might affect you. Know well the Ministries that oversee the relevant laws to know where complaints should be forwarded to.
For buyers of completed units, the terms and conditions of the contract of sale is open to negotiation between the contracting parties.
Appropriate Authority means any authorities eg. Local Council, Land Office, 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.
If the Vendor has taken credit facilities to finance the project, the land would be charged and thus, '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 their registered address or you can find them 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 to be disclaimed/discharged from foreclosure by the bridging financier in the event 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 pay such redemption sum directly to the bridging financier either in one lump sum or progressively thereof.
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 is 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.
This is probably the first time in your life that you will be needing the service of one. 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 if you have opted to appoint 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.
Architects play an important role in the building of your new home. You do not actually get to meet them in person except for seeing their signatures in the completion of every stage of the construction and when the project is certified completed.
Contractors & Trades Contractors
Contractors are employed by the housing developers to build and complete the project. Usually house buyers never pay attention to them except when there is complaint on defects or shoddy workmanship.
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.