Over the years, there has been no shortage of complaints from Malaysian homebuyers on the deviations found in their end-products i.e. the completed unit of apartment or condominium or landed residential house as well as their surrounding habitat – when compared to what is represented in the sales brochure, flyers and even plans attached to the standard SPA signed between them and the property developer. Find out how you can avoid this from happening to you.
What details property developers are supposed to supply homebuyers?
It is mandated in the Preamble of Schedule G (landed property) of the standard Sale and Purchase Agreement (SPA) that housing developers have to provide the approved layout plans (to be annexed as the First Schedule) and approved building plans (to be annexed as the Second Schedule) to prospective homebuyers. This requirement is in accordance with the Housing Development (Control and Licensing) Act 1966 or HDA and Housing Development (Control and Licensing) Regulations 1989, sub-regulation 11(1).
Similarly, Schedule H (Stratified Property) requires an attachment of the approved:
- Site plan
- Layout plan, 3
- Floor plan of said parcel,
- Storey plan of said building (delineation of the said land comprising the parcel)
- Accessory parcel plan
- Common facilities plan (to be collectively annexed as the First Schedule) and approved building plan (to be annexed as the Second Schedule).
This mandatory requirement has been entrenched within the Housing Development Regulations and the statutory SPA but has seemed continuously unchecked by the regulatory body i.e. the Housing and Local Government Ministry and its enforcement agencies.
Why is it important for these approved drawings to be made part of the SPA’s obligation and condition?
The importance of these plans/ drawings document is best described through the following scenarios.
Development of open spaces / green lung
Homebuyers ought to be aware that modern living these days involves more than purchasing a piece of subdivided land or an apartment/condominium unit within a strata scheme. What one is actually purchasing is a concept of living style which apply to all ends of the market, from low and medium cost to high end, which means its surrounding environments such as open parks/field, green lungs, community hall and clubhouse, i.e. all common property and facilities are actually an inseparable part of the neighbourhood you bought.
From time to time, you will read in reported news about residents of a housing scheme taking the developer to task for developing some green lung/common open spaces which they deem to be their communal common property, something which the developer would contend otherwise and that these green open spaces are part of their land reserved for future development.
How can you tell whether the developer has the right to do so?
Say there is a piece of green lung, an open field – located next to your house in which you do your daily jogging and which serves as a playground for your kids. Now imagine that suddenly after a few years, plans are underway for it to be transformed into a towering condominium block! Having a new development appear right at your doorstep is not an uncommon sight in some housing schemes.
Say you paid an RM10,000 premium a few years ago, for fronting a green lung (unintended for development) – and it has now subsequently turned into a retention pond. The nightmare continues as this area is infested with rodents, serves as a breeding ground for mosquitoes, and has the occasional drain water ponding and smelly water discharge.
This is when the approved layout plan annexed in the First Schedule will lend credence to the disputing arguments.
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What should be included in the approved building/development proposal?
The layout plan (provided it’s an approved copy by the local authority) is the approved development proposal which contains, among others, the following vital information:
In planning terms, density refers to the number of houses or apartment units allowed to be constructed within a proposed development. For example, 60 units of apartments per acre have been approved for a scheme where such density quota has been used up, i.e. the exact unit of apartments per acre has been constructed.
The property developer is not allowed to build extra units even if there is ample land left in the scheme. The tabulation on the approved layout plan will be able to clarify the exact density and unit approved by the authority for development.
2. Use of land and building
An approved plan will show the development mix approved by the local authority. When a scheme has been approved for a purely residential neighbourhood, for example, a developer is not allowed to build an office block in an approved scheme of 50 units of semi-detached homes and 100 units of terrace houses without first applying and obtaining approval from the authority for such a deviation.
Thus, a mixed development comprising office towers, and shop houses in a residential scheme will need to be tabled for the local authority’s approval before they can be developed and the same shall be required to be reflected in the approved plans.Discover properties for sale
3. Provision of open and green spaces
The approval governs how these open spaces are allotted for the designated community activities such as playgrounds for children, communal parks and halls, places of religious worship, etc are to be used. Hence once these communal facilities such as an open park are designated for public use, they cannot be converted to say another block of condominium or office tower. Thus, the importance of the layout plan comes to bear.
By the same token, if these open spaces have been designated as green lungs, communal parks, halls and facilities and even utility reserves for roads, drains, water retention and electrical works, etc, then it is prohibitive to be developed.
So, you should get inquisitive when you intend to buy a landed property next to an open land marked “future development” either in the brochure, architectural model and development plan of the scheme at the showroom if you want to avoid a condominium tower built right at your doorstep as the worst scenario illustrated above.
Homebuyers should also find out more about plot ratios and how to calculate it.
Advice for prospective homebuyers
As the first line of your standard checking procedure, ask the sales staff for the approved layout plan from the relevant authority and that they ought to have no reason to turn down your request as such approval would have been obtained by now, or else they would not have been allowed to launch a sale, for such an approval forms part of the requisite condition for their sales permit. Why should such approved plans be shrouded with secrecy unless one has ulterior motives to hide?
The approved plans or drawings attached to the schedules must be a duplicate copy of the actual approved plan bearing the appropriate authority’s seal and signature of approval normally in the form of a stamp. Stamps like “Di Luluskan oleh Majlis Bandaraya Subang Jaya” should be visibly available on the top right-hand corner of each of such plans.
Then run through these approved plans against those represented in the advertised medium and your expectation to ensure indeed they are duly “approved” for the development you have been led to believe. This will allow you to make an informed decision.
You ought to practice similar steps for the same plans that shall be annexed in the first schedule of the SPA, before signing on the dotted lines in the contract. When in doubt, please check with your own appointed independent lawyer.
This article is written by Datuk Chang Kim Loong, the Honorary Secretary-General of the National House Buyers Association: www.hba.org.my, a non-profit, non-governmental organisation (NGO) manned by volunteers. He was also a Councillor with the then Subang Jaya Municipality Council (now conferred Subang Jaya City Council status) from 2008 – 2018.