Then again, looking at the amount of
effort some developers have
invested in their marketing
strategies, Shanker
complains, “...if only
these developers put
as much effort into
the building as they
did into producing a
brochure, then perhaps
we will have better quality structures!” He
elaborates on the whole ritual of a property
launch, including “garnishing” of the
marketing and sales materials, especially
brochures and showunits. Embellishment of
showroomunits and elaborate launch events
attract awestruck potential buyers/investors.
Often precipitating unnecessarily high
expectations and dreams.
ASK, INQUIRE AND PROBE
“I agree that if a developer has the capacity to
put up such a great ‘show’, he should look into
the details of his development project and
deliver what was stated in the brochure.
But from themarketing point of view,
I can possibly note what the developer is
attempting … becausewhatever you’re selling,
you’re bound to ‘dress it up’ before you sell it,
to obtain the best deal and to secure the sale.”
Nevertheless, Shanker agrees that the
developer has to produce that which he
had promised. “You really do not have to
scrutinise the S&P agreement as it is a
stock standard document. What you need
to look at closely and in detail at are the
attached documents like the building
plans. Carefully examine the attachments
first and don’t complain later. When
attending a launch, look carefully at the
finer points and the fine print. Open your
eyes wide, ask questions nomatter how
illogical theymay sound. Clear all doubts
whatsoever. Query and question the
developer to understandwhat you are
APRIL 18, 2014
Please email your feedback and
queries to:
X
CUT AND KEEP
>Vital considerationpoints to avoidbeing short-changedbymisleading
real estatebrochures
PART 2
HOUSINGDEVELOPMENT (CONTROL AND LICENSING) REGULATIONS 1989
PU(A) 58/1989 (Ref -
58-1989)
Sec 5: Advertisement and sale permit.
(1) No advertisement or sale shall bemade by any licensed housing
developer without an advertisement and sale permit having first
been obtained from the Controller.
(1A) Any advertisement and sale shall be in accordance with the
advertisement and sale permit as approved by the Controller.
(2) An applicant for an advertisement and sale permit shall submit his
application in the formprescribed in Schedule D and shall supply
the following:
(a) a copy of the approved building plans;
(b) two copies of the proposed advertisement including the brochure
containing particulars as prescribed under paragraph (1) of
regulation 6 of these Regulations; and
(c) such other relevant particulars or information as may be required
by the Controller.
(3) Any misleading statement, false representation or description of the
particulars or information required under paragraph (2) of this
regulation shall be an offence under these Regulations.
(4) The Controller may, in his discretion, grant an advertisement and sale
permit with or without attaching any condition or conditions thereto
or refuse to grant a permit. An advertisement and sale permit issued
under this regulation shall be in the formprescribed in Schedule E.
(5) No advertisement and sale permit shall be issued nor shall any
advertisement or sale bemade for any housing development in
respect of which-
(a) the licensed housing developer is not the proprietor of the
land upon which the housing development is proposed to be
carried out:
Provided that this provision shall not apply if the proprietor of
such land has executed an agreement with the licensed housing
developer to the effect that-
(i) the proprietor agrees to the sale of the land for the purpose of
the housing development concerned; and
(ii) the proprietor agrees to abide by the provisions of regulation
10 of these Regulations;
(b) the land upon which the housing development is proposed to be
carried out is charged for an amount exceeding fifty per centum
(50%) of themarket value of the land (inclusive of annual interest
on such amount) and such charge is to any person, body or
persons, company, firmor society other than a bank which is in
possession of a licence issued under the Banking and Financial
Institutions Act 1989 [Act 372 ], the Islamic Banking Act 1983 [Act
276 ], the Bank Simpanan Nasional Berhad Act 1997 [Act 571 ], the
Bank Kerjasama Rakyat Malaysia Berhad Act 1978 [Act 202 ] or the
Bank PertanianMalaysia Act 1969 [Act 9 ];
(6) An advertisement and sale permit shall be required in respect of each
housing development and any advertisement in relation to the same
development, which differs from that for which the permit was first
granted, may bemade but subject to such variation being submitted
for the prior approval of the Controller.
(7) The fee payable for a permit under this regulation shall be five
hundred ringgit per year or part of a year.
Sec 6: Particulars to be included in advertisement.
(1) Any advertisement (other than those conveyed by means of
broadcast sound receivers or through television receivers) made by
any licensed housing developer shall include the following particulars:
(a) the housing developer’s licence number and validity date;
(b) the advertisement and sale permit number and validity date;
(c) the name and address of the licensed housing developer and his
authorised agent, power of attorney holder or project
management company if any, as approved by the Controller;
(d) the tenure of the land if the land is leasehold, its expiry date and
encumbrances, if any, to which the land is subject;
(e) the description of the proposed housing accommodation;
(f) the name of the housing development, if any;
(g) the expected date of completion of the proposed
housing development;
(h) the selling price of each type of housing accommodation;
(i) the number of units of each type available; and
(j) the name of the Appropriate Authority approving the building
plans and the reference number.
(2) A licensed housing developer shall issue a brochure in respect of the
housing accommodation to each purchaser free of charge.
Refer to and/or register complaints with:
• National House Buyers Association -
/
•Ministry of UrbanWellbeing, Housing and Local Government -
/
• The Advertising Standards Authority (ASA) of Malaysia -
/
you are prepared to spend a huge sum,
and I mean a lot of money, youwill
never get the same thing which you
saw in the embellished showroom.”
The problem is enhanced through the
buyer’s unrealistic expectations. “People
should know that the artist’s impression,
images, layout plans and blueprints may
not necessarily reflect reality.” Showunits
are consciously ‘dressed-up’ to awe. One
should take note of the empty-shell units
withwires hanging out, usually erected
next door, to gauge what the buyer will
actually be receiving.
“The developer often spends amillion
plus ringgit to embellish the showroom.
He then leverages this investment to sell
another 200 units to generate substantial
profit. While buying a onemillion ringgit
apartment, buyers often forget they
will need another million to embellish
the interior.”
In short: The real falls short of the
ideal because the average buyer cannot
afford/invest the additional amount
to embellish and achieve that dream
interior. One should stop comparing
the showroomwith the empty-shell
after purchase.
COMMON SENSE
Have you ever wonderedwhy some
people purchase property, then demolish
everything in it (sometimes even the
structure), only to re-build it again?Why
buy a brand newhouse, one which the
developer has taken pains in constructing,
designing and decorating? “If I were the
developer, I would just produce an empty
shell with infrastructure and basics; bare
cement floors, unpaintedwalls, plumbing
without accessories and fixtures, wires
ready to be connected etc. - so buyers can
kit-out the home the way theywant to. This
way, prices can be reduced as developers
would not have towastemoney on fittings
and accessories, only to have them
demolished. You can also help save the
environment by using less materials.”
Suggestions by Andy Low:
increase awareness among buyers
against developers marketing ploys
and gimmicks
be aware of the difference
between “approved plan” and
“proposed plan”
do not sign the S&P agreement or
pay a booking fee without verifying
the approved layout plan and
building plan. Match the “approved
plan” with the artist’s impression
printed in the brochures
verify the common facilities
attached in the schedule in the
S&P agreement
seek independent legal advice from
a non-developer’s panel lawyer
before signing the S&P agreement
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B
UYERS
often realise to their own
chagrin, that there are two sides
to a coin. Often, even a third side.
Juxtaposing the hyperbole, touched-
up visuals of real estate brochures and
heavily embellished showunits, against the
fundamental reality of what buyers actually
end upwith -
the
Sun
examines home buyers’
expectations and reiterates the “Caveat
Emptor” principle
.
EXPECTATIONS VS REALITY
Siva Shanker is the president of theMalaysian
Institute of Estate Agents. He deals mostly
with property agents and industry personnel
related to the secondarymarket and sub-sales
(property sold by owners and agents). At
times, evenwith those whoworkwith
developers directly. “Unfortunately, we are
marketing people, not the quality-controllers.
It is easy to blame the salesman instead of the
‘manufacturer’ per se, as property buyers and
investors normally deal with the sales guy, the
agent or the developer’s staff,” Shanker says.
An owner of property himself, Shanker
agrees that
some developers have gone
overboard in over-hyping their sales
brochures andmarketingmaterial
. He
also
commends themany developers who
have produced great work across their
property development portfolios
. “Some
come upwith goodwork across all their
projects and then suddenly they produce one
slip-shod job. Maybe they accidentally used
the ‘wrong’ contractor or building supplier –
there could bemany reasons.”
The Latin phrase
Caveat Emptor
becomes relevant during property
purchase. Themeaning “
let the buyer
beware
” plac
es the burden on buyers
to reasonably examine property
before purchase, and take
responsibility for its condition
.
It is based on the principle that the
seller of a product cannot be held
responsible for the quality unless it is
guaranteed in a warranty.
actually purchasing.”
Punctiliously examine the small
clauses and disclaimers
!
From the legal aspect, Low&Partners
managing partner Andy LowHann Yong
informs, “It is not easy to claimagainst a
developer for “discrepancies” (found in the
brochure compared to the “end-product”)
due to fine printed disclaimers and exclusion
clauses.The home buyer will have a stronger
case if themisrepresentation is material and
part of the contract signed. For example,
buildingmaterial used is inconsistent when
compared to the specification in the S&P
agreement.” Low adds that there have been
cases where the court ruled in favour of the
purchaser (ref Cheong Bee Yong vMBF
Finance Bhd&Anor [2001]1 CLJ 668). “The
court held that
the brochurewas worded
in such away that it must be regarded as
an ‘undertaking’ for the developer to pay
whatever expenses that arose before the
issuance of the CF (Certificate of Fitness)
as the purchaser had relied on the
brochure to purchase the unit
.”
With legal action proving expensive and
time consuming, Low advises that purchasers
contact other similarlymisled purchasers
in combining their legal efforts and sharing
the costs. “Home buyers can also collect
evidence including brochures, written
letters fromdevelopers, and seek
independent legal advice.”
THE BUYER’S MIND
Shanker details the usual thought process of
the typical regular buyer. “This person goes
into a property showroom, has a look, goes
next door to check out the bare unit. In his
mind, he believes he can transform the bare
unit into the fitted-out showroom…at a
fraction of the cost. Perhaps the developer
has given himan ‘impression’, which
influences the buyer to believe it. I can tell
you that it can never be done. Unless
Promises, promises
