Making changes: A file picture shows visitors looking at some houses for sale at a property fair. The significance of raising the bar will phase out smaller and “fashionable” developers out of the housing development system while ensuring serious players deliver on their promise under a much-regulated regime.
PROPERTY development has captured the imagination of Malaysian businesses across the board in the last decade.
Almost every sizeable company has a property division and almost all businesses with extra cash and land bank are venturing into property development.
Even landowners without capital are joint venturing with developers to ensure they share a bite on this seemingly expanding yet lucrative piece of cake.
One may see companies relocating their operation or headquarters from the prime land, which they were sitting on, to start their claim as a property developer on the land.
To further maximise the return on land and match with the preferred lifestyle of living in urban Malaysia now, the strata format has gained momentum.
Not to mention that the current market trend is to move out from the “nest” after one is financially independent.
With the effective implementation of Housing Development (Control and Licensing) (Amendment) Act 2012 (“HDAA”), Strata Titles (Amendment) Act 2013 and Strata Management Act 2013 (both “Strata regime”) on June 1, the rules of the game are now changed and the barrier of entry has never been higher.
Previously, housing developer has to deposit RM200,000 with the Controller of Housing (“controller”) as a requirement for the developer licence and it is now increased to 3% of estimated cost of construction minus land cost. This will open up a floodgate of consultation until an amicable agreement is reached.
It is also a requirement now under the strata regime to file the schedule of parcels prior to the developer selling any parcel or proposed parcel in the development area which in effect restrict the developer from making any adjustment to the proposed quantum of provisional share units for its later phase development.
The mere act of filing is simple but the upfront commitment in limiting the commercial gain is painful to the developers.
There are also notable amendments to the prescribed sale and purchase agreement under HDAA 2012 especially Schedule H that facilitate the strata residential development.
Under the new Schedule H to be used for housing project with advertising permit and development licence issued after June 1, the developer has to settle the redemption sum owed to its bridging financier if the amount of redemption sum is more than 35% of the purchase price before the purchaser makes payment in excess of 50% of the purchase price.
The purchaser need not make any further payment until the developer complied with the same.
The stipulated manner of delivery of vacant possession in Schedule H now is conditional upon the separate strata title being issued by the authority.
Nonetheless, the developer may apply for certification from the controller before delivery of keys to the purchaser in the event that the strata title is not issued yet, provided always that such non-issuance of strata title is not attributable to the developer’s fault;
The previous 14 days deeming provision for the delivery of vacant possession is now 30 days from the date of service of notice which effectively cut the construction period to 35 months.
The amendment in the schedule of payment postpones 5% of the purchase price to be paid to the developer from previously during construction stage to the date of taking vacant possession by the purchaser.
There are also now improved statutory termination and abandonment provisions under the HDAA 2012 that provides for the situation where the purchaser may terminate the sale and purchase agreement when the housing developer ceases or refuses to work for a continuous period of six months. The housing developer on conviction, shall be liable for a fine ranging from RM250,000 to RM500,000, or a maximum three- year imprisonment, or both.
Homeownership is the undisputed agenda of the day. While the Government is still playing catch up in its effort to provide affordable housing, a regulated regime in private housing development is the better way to go now.
The significance of raising the bar will phase out smaller and “fashionable” developers out of the housing development system while ensuring serious players deliver on their promise under a much-regulated regime.
Indirectly, homebuyer protection in Malaysia has now moved up a few notches.
- The views expressed are entirely the writer’s own.
For more information on
Building and Construction event, please visit www.asiapacificevents.com
No comments:
Post a Comment