Buyers, beware of overhang projects

REFERRING to the letter “Bitter experience of buying from developer” ( The Star, Feb 20), it looks like buying those overhang units will have hidden costs like charges for valuation of the property for bank loans.

I own a serviced apartment in Subang Jaya. The development was abandoned for several years and after its rehabilitation, the occupancy rate was low due to the bad reputation of the developer. I was not able to rent out my unit for several years due to the poor occupancy rate, which resulted in low collection of maintenance fees. This led to poor maintenance of the building, lifts breaking down and inadequate security.

Thus, it is safer to buy from the secondary market as the projects with overhang units may have a low occupancy rate, which makes these places unsafe because security facilities can be inadequate due to low contributions from a small number of occupants.

Maintenance may also be poor, which may lead to lifts breaking down and so forth, and the buyers may have difficulty renting out the units.

Perhaps the value of the units may have declined due to the overhang of the projects, so banks may want to get independent professional assessments by valuation companies for the benefit of the buyers and themselves as well.

Buyers must be careful and check the rate of occupancy of the projects before they make any commitments to buy.

However, it is safer for buyers to purchase from the secondary markets as they will be able to assess the actual condition of the property. THOMAS FOO Subang Jaya