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Ministry warns public on illegal housing developer

Published on: Monday, December 23, 2013

Kota Kinabalu: The Ministry of Urban Wellbeing, Housing and Local Government has issued a warning to the public about a suspected illegal housing developer offering attractive home ownership scheme via social media.

The warning, which was published by the National Housing Department (NHD), urged the public to be cautious and to scrutinise any offers made by private developers prior to making purchases.

"The media had made several coverage about a certain developer who promoted its affordable home scheme through social media such as Facebook and even invited local artists to act as their promoters," said NHD Director General Dato' Mohd Padzil Hashim.

The scheme, which is already expanding its operation to include Labuan and Sabah, called itself an Islamic concept and purchasers who have signed the sale and purchase (S&P) agreements will be given RM500 cash monthly for 36 months or until the house is completed.

However, in order to be eligible for the houses, purchasers need to make RM99,000 private loans from the developer and payments should be made to lawyers appointed by the company. They also need to pay a non-refundable RM500 booking fee.

The RM500 cash incentive is aimed to ease the burden of home buyers because repayment for the personal loan would be between RM1,000 and RM1,200 monthly.

It is opened only for Muslim home buyers and offers a four-bedroom and three- bathroom bungalow at a low price of RM99,000, but warned the price would go up next year to RM109,000.

According to its Facebook promotion page, interested buyers are given the freedom to choose any place in the country where they want their houses built. The company also promised to pay home buyers RM99,000 if it violated any of the terms agreed upon by both parties.

Those who are ineligible to get housing loans from the bank will need to fork out an additional RM3,000 before they are qualified to apply for the personal loan offered by the company.

In order to cement the public's confidence, the company also requires all home buyers or their representatives to attend free Al-Quran classes and prayer seminar organised by the company.

"The department would like to clarify that this manner of sales is not in accordance with the rules and regulations under the Housing Development Act (Control and Licence) 1966 (Act 118).

"Therefore, purchasers are advised to be prudent with such schemes because the agreement is not guaranteed and the rights of home buyers are not protected under Act 118," he said in a statement.

Padzil reminded the public to ensure a few things prior to buying houses.

"Ensure the developer's licence and marketing licence are genuine and valid, ensure the planning and floor plans have been approved by the local authorities and the land's status is gazetted under housing area and approved by the Land and Survey Department," he said.

He added that a standard S&P agreement would include Table G (Land and Building), Table H (Building that had been divided), Table I (Build and Sale for Land and Building) and Table J (Build and Sale for Building that had been divided).

"The department had held a meeting with relevant agencies such as the police, Bank Negara Malaysia (BNM), local authorities, Construction Industry Development Board (CIDB) and others on August 26 to discuss possible actions to be taken against developers and cooperatives involved in this activity," he said.

Padzil urged the public to forward any information to the department's Enforcement Unit at 03-8000 8000 if they received suspicious housing scheme offers.

Potential home buyers also can check the details of developers by going to the department's website at http://ehome.kpkt.gov.my.