“A GUIDE TO BUYING A HOUSE”

1. “A GUIDE TO BUYING A HOUSE” GURDEV SINGH Director Policy and Strategic Planning Division National Housing Department 18 October 2012

2. CONTENT • Main Players in the Housing Industry • A Guide to Buying a House : Introduction • Ways to Purchase • Residential versus Commercial Buildings • Tips for House Buyer : Before • Before You Choose a House • Before You Purchase a House • Common Mistakes to Be Avoided

3. MAIN PLAYERS IN THE HOUSING INDUSTRY Federal Government State Governments Players In The HousingIndustry Private Sector Local Authorities & Other Agencies

4. A Guide to Buying a House: Introduction Three ways to purchase property: By resale through agents; Direct resale by owners; or Direct sale by housing developers. Residential versus Commercial Buildings • Residential: • License is required - Act 118 applies only in Peninsular Malaysia. • Act 118 applies to residential buildings, service apartments and SOHOs • Commercial: • Licenseis not required: • Buyer is not protected – will have to take up civil action in court against the developer. • Commercial buildings – SOFO, SOVO and Hotel suites.

5. Tips For House Buyer: BEFORE Before you CHOOSE a house Before you PURCHASE a house ? Check & Ensure Do research i.e. Must Have: Location Affordability – maximum budget Space – bedrooms, kitchen Design, specifics and style Noise Accessibility Outside space Pets • Housing developers license and advertising & sale permit: • Valid – http://ehome.kpkt.gov.my • Type of house • Landed • schedule G, Act 118 • Completion date: 24 months from the S&P date • Subdivided (stratified) • Schedule H, Act 118 • Completion date: 36 months from the S&P date • Land status – District Land Office / State Land Registrar • Freehold • Leasehold - number of years left? • Malay reserve • Transfer of title – no hidden charges / encumbrances Found Ask around – no hidden problems

6. Tips For House Buyer: BEFORE Cont… Before you PURCHASE a house 1 Housing developer’s license & expiry date Ref. number of approved building plan & name of the Local Authority 2 The advertisement & sale permit & expiry date 10 4) Brochure Information 3 9 Number of units Name and address of: The licensed housing developer; Agents or the authorised person (if any); Those holding power of attorney (if any); The project management company (if any) 8 Selling price of the house 7 Expected date completion 6 Name of housing project 5 Location description Specification of building materials Size area of building Amenities/services 4 Land status Freehold Leasehold encumbrances

7. COMMON MISTAKES TO BE AVOIDED • Doing it alone • Complex transaction • Dependable team – lender, lawyer, insurer, referrals and advice from family and friends • Buying at first sight • Fit your family’s needs and budget • A list of your needs and wants • Look around – neighborhood and the community • Ensuring your accessibility to housing loan • Pre-approved loan – how much? Credit rating • Overbuying • Monthly expenses & debts < 35% your income before tax • Misplacing your trust • Do not get influenced by the agent / developer • Relying on oral agreements • Get it in writing

8. COMMON MISTAKES TO BE AVOIDED • Skipping the fine print • Ask for the document in advance • In doubt? – ask friends / lawyer • Forgetting or betting on resale • House cost > 50% from the neighboring houses • Bank loan and insurance coverage • check with the bank • Sufficient purchasing capability • Adequate insurance coverage • Verify information with the National Housing Department (NHD) • In doubt? – http://ehome.kpkt.gov.my • Tel: 05-8891 5000 • perlesenan@kpkt.gov.my

9. COMMON MISTAKES TO BE AVOIDED • Paying booking fee deposit without signing the sale and purchase agreement when purchasing from a developer • No collection of booking fee / deposit prior to signing S&P • If you sign and transaction fails ?? • The S&P agreement should follow schedule G or H • S&P as per schedule (G – landed, H – stratified) in Act 118 • Read and understand the S&P agreement • Get your lawyer to explain • Do not sign loose sheets of the paper if given separately • Check the development progress of your house • Visit the site often • % of progress = % of claim made by the developer • Delay ? – report to our Private Housing Monitoring Division, NHD immediately • Tel: 03-8891 4168 • lailiangkoong@kpkt.gov.my • jpn@kpkt.gov.my

10. THANK YOU Enquiries: Contact: Director Policy and Strategic Planning Division National Housing Department Ministry of Housing and Local Government E-mel: jpn@kpkt.gov.my Telefon pejabat: 03-8891 4301

11. Additional information

12. NATIONAL HOUSING DEPARTMENT (NHD) BACKGROUND The NHD was established in 1976 to replace the Malaysian Housing Trust which existed since the 1950s. VISION To emerge as an excellent organisation in planning, implementation and monitoring of the housing sector. MISSION To ensure an adequate supply of quality houses for all citizens especially those from the lower income group [those who have monthly household income of less than RM2,500].

13. FUNCTIONS OF NHD • Formulating policies, legislation and procedures on the development and sustainability of the housing sector at the national level; • Planning and implementing the People’s Housing Programme (PHP); • Undertake research on housing issues as well as to collect the necessary information regarding the housing sector; • Managing the housing loan trust fund; • Processing and issuing licenses as well as sale & advertisement permit to private housing developers;

14. FUNCTION OF NHD Cont… • Facilitating and coordinating efforts pertaining to rehabilitation of abandoned housing projects; • Conducting investigations on public complaints as well as enforcement in accordance with Housing Development (Control and Licensing) Act 1966 [Act 118] and Regulations; • Coordinating issues and matters pertaining to the resettlement of squatters throughout the country; • Providing facilitation and coordinating efforts pertaining to the Building and Common Property (Maintenance & Management) Act 2007 [Act 663].