Buying property can be your biggest investment in life. A young couple would be buying cars first, as it is necessary to get around, as public transport is rather unreliable in Kuala Lumpur. The next investment will be on the accommodation.
The investment can be the biggest in the lifetime. As such, it has to done right. An investor or buying need to be conversant with the legal implication of the purchase. These are the tips from one of the practising lawyers in the property business..
a. The concern about SPA or sale and purchase agreement is on the "sub-sale". This is because the newly developed properties have their SPA standardized. It may be true as far as the SPA is concerned, however we had seen many of the developers had defaulted leaving the buyers to pay for the uncompleted property. It is good to check the status of the develop, as I personally loss my investment due to low quality of finished products.
b. Payment term. The normal term is full payment must be made to the seller within 3 months. Normally an extension of 1 month will be provided with interest of 8-10%.
c. Condition Precedent. This is condition for the delivery of the property, if the house is still under construction, then the seller must get the CCC or certificate of compliance, previously known as CF or certificate of fitness for occupation.
d. Tenure - The buyer need to check if the property is freehold or lease. For freehold, the loan can be processed after the SPA. However for leasehold, the the consent of the authority must be obtained for the transfer, only then the loan can be processed.
d. As it is - The buyer needs to check for the physical condition of the property, any crack or leak will be the responsible of the new owner. This is in contrast to the new property where the defects will be taken care by the developer for 2 years.
e. Power of Attorney - This is another area where the buyer can be cheated. The PA gives the right of the holder to sell the property. However there are cases of where this had been misused.
Always take the prudent care to ensure your investment is protected. There many other issues to be reviewed on tp of the legal issues.
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