Confused about SoHo, SoVo and SoFo properties and how they differ from serviced apartments, apartments, and condominiums? Let us explain it to you.
We’re sure you’ve come across terms like SoHo, SoVo, and SoFo when property hunting. These developments are usually located in prime hotspots, near MRTs, or next to a shopping mall. Best of all, they’re usually sold at attractive prices. All these, plus its condominium-style amenities, appeal to young families and millennials looking to buy their first home.
How did the terms SoHo, SoVo, and SoFo come about?
Back in 2007, the government passed the Strata Titles Act to cover stratified landed development under the Housing Development Act (Control and Licensing) (Amendment) 2007. Basically, this meant developers could build smaller units in high-density areas, resulting in SoHo, SoVo and SoFo units with affordable real estate prices.
Is SoHo commercial or residential?
The biggest difference between SoHo, SoVo, and SoFo units compared to regular residential developments is the commercial land title. All of these developments are built on commercial land. This is the key reason why SoHo, SoVo and SoFo units are situated in prime locations. However, SoHo, SoVo and SoFo aren’t truly official government names – it’s more of a marketing term created by developers.
What does SoHo mean?
The Small Office Home Office (SoHo) works as either a home or office, as its name suggests. Because it is normally used for residential purposes, SoHo units have everything a home requires including a living room, bedrooms, and full fitted bathrooms. However, these units tend to be a little smaller (400 sq ft to 800 sq ft) compared to typical apartments but come with facilities and amenities akin to condominiums.
Some SoHo homes for sale include Scott Garden Jalan Klang Lama, Kuala Lumpur (775 sq ft; RM350,000), Soho Suites KLCC (813 sq ft; RM913,000) and Queensville Permaisuri, Cheras, Kuala Lumpur (526 sq ft; RM 360,000). There’s also the upcoming D’immersione, Solaris Mont Kiara, Kuala Lumpur (769 – 1,581 sq ft; RM 986,616 – RM 2,087,663)
What does SoVo mean?
The Small Office Virtual / Versatile Office (SoVo) is usually used for commercial purposes, although there are a few developments that double the space as a home too. As it’s primarily an office space, a SoVo comes equipped with telecommunication and infrastructural facilities for a small company or burgeoning start-up. Like the SoHo, some SoVo units do have lifestyle facilities and amenities within the building.
What does SoFo mean?
The Small Office Flexible Office (SoFo) offers enhanced flexibility when it comes to your space whether as a place to stay or an office SoFo. SoFo units usually offer different types of layouts or come with internal partitions for buyers to customise the space according to their preferences (spaces for extra beds, for instance). Also, some SoFo developments allow you to enlarge a space by combining two adjoining units together. SoFo units also generally come with the facilities and amenities you’d expect from a condominium.
What do I need to know before purchasing a SoHo, SoVo, or SoFo?
a. Loan Terms
In general, SoHo, SoVo or SoFo are commercial properties. While this depends on the bank, your maximum loan margin of finance is normally lower compared to the usual 90% for residential loans, plus there might also be a shorter maximum loan tenure (25 – 30 years). However, being a commercial property means owners aren’t restricted by the same residential property loan limitations of 70% maximum margin of finance for your third property onwards. Again, loan terms for SoHo, SoVo, or SoFo properties depend on the property developer and their agreement with the bank.
b. Utility bills
As SoHo, SoVo or SoFo are commercial properties, the utility bills, commercial assessments, and quit rent are higher than residential units. Take your electricity bill, for example, Tenaga Nasional Berhad (TNB) charges RM 21.80 for the first 200 kWh per month, but commercial properties pay 43.5 sen/kWH for the first 200 kWh (1 -200 kWh) monthly or RM 87 for 200 kWh of use. Take note that TNB and Indah Water Konsortium utility bills for some SoHo units can be converted from commercial rates to residential rates, but this is on a case-by-case basis. You will have to apply individually or as part of a joint management body (JMB) or management corporation (MC).
c. Is SoHo under HDA?
While you do sign a sales and purchase agreement for SoHo units, it’s not the same case for SoFo and SoVo units as they aren’t regulated under the Housing Development (Control and Licensing) Act 1966 (HDA).
Instead, you will sign a non-standard sales and purchase agreement with the property developer, drafted by the developer’s lawyer which is not regulated by the HDA. Check the clauses in this non-standard sales and purchase agreement before signing it, as any dispute relating to your new SoFo and SoVo unit must be settled in court based on this agreement.
As for SoHo units, any disputes can be forwarded to the Tribunal for Homebuyer Claims as they are under HAD jurisdiction.
While SoHo, SoVo, or SoFo units are attractive for their great location and price, it’s important to consider the property’s loan terms and utility rates (commercial or residential). Do check with the property developer before considering to purchase a SoHo, SoVo, or SoFo unit, especially the clauses in the non-standard SPA signed for SoFo and SoVo units.