Ad­ver­tise­ment by hous­ing de­vel­oper on free le­gal fees

The Star Malaysia - StarBiz - - News - By AN­DREW WONG FOOK HIN

THE pur­pose of this ar­ti­cle is to pro­vide some point­ers and guide­lines to a pur­chaser who wishes to ap­point his own so­lic­i­tor when buy­ing a hous­ing ac­com­mo­da­tion from a hous­ing de­vel­oper.

Hous­ing de­vel­oper may no longer ad­ver­tise free le­gal fees.

It is com­mon for a pur­chaser to be at­tracted to an ad­ver­tise­ment by a hous­ing de­vel­oper of­fer­ing free le­gal fees when buy­ing a home in its hous­ing de­vel­op­ment.

How­ever, since July 1, 2015, any ad­ver­tise­ment made by any li­censed hous­ing de­vel­oper shall not con­tain an of­fer for free le­gal fees.

Among other de­scrip­tions which shall not be con­tained in any ad­ver­tise­ment by a hous­ing de­vel­oper are:

> Pro­jected mon­e­tary re­turn gains and rental in­come;

> Claim of panoramic view;

> Trav­el­ling time from hous­ing projects to pop­u­lar des­ti­na­tions; or

> Any par­tic­u­lars to which a hous­ing de­vel­oper can­not gen­uinely lay proper claim.

Any per­son who con­tra­venes this Reg­u­la­tion 8(1A) of the Hous­ing De­vel­op­ment (Con­trol and Li­cens­ing) Reg­u­la­tions, 1989 shall be guilty of an of­fence, and shall on con­vic­tion, be li­able to a fine not ex­ceed­ing RM50,000 or to a term of im­pris­on­ment not ex­ceed­ing five years or to both.

Like­wise, any per­son who know­ingly and wil­fully aids, abets, coun­sels, pro­cures or com­mands the com­mis­sion of this of­fence shall face sim­i­lar penal­ties upon con­vic­tion.

Pur­chaser has the right to ap­point so­lic­i­tor

It is not com­pul­sory for a pur­chaser to en­gage his own so­lic­i­tor when buy­ing a hous­ing ac­com­mo­da­tion from a de­vel­oper.

How­ever, a pur­chaser has the right to do so.

If a pur­chaser chooses to en­gage his own so­lic­i­tor, his so­lic­i­tor shall be en­ti­tled to be fur­nished by the hous­ing de­vel­oper with a com­plete set of the con­tract of sale (orig­i­nal and du­pli­cate copies), and all an­nex­ures, free of charge, sub­ject to the un­der­tak­ing of the pur­chaser’s so­lic­i­tor to re­turn the doc­u­ments in­tact in the event the con­tract is not ex­e­cuted by the pur­chaser within 14 days from the date of re­ceipt of such doc­u­ments

It is re­quired to in­sert in the con­tract of sale:

> The name and ad­dress of the pur­chaser’s so­lic­i­tors, if any;

> The name and ad­dress the de­vel­oper’s so­lic­i­tors, if any; and

> The name and ad­dress of the so­lic­i­tors ap­pointed by the de­vel­oper to hold 5% of the pur­chase price as stake­hold­ers dur­ing the de­fects li­a­bil­ity pe­riod.

A pur­chaser may not en­gage a so­lic­i­tor if the so­lic­i­tor or his firm has been ap­pointed or em­pan­elled as a mem­ber of the hous­ing de­vel­oper’s panel of lawyers, as such a so­lic­i­tor or his firm shall be deemed to be act­ing for the hous­ing de­vel­oper and he shall not act for any pur­chaser in the same phase of hous­ing de­vel­op­ment.

Where a so­lic­i­tor acts for a pur­chaser in the pur­chase of a hous­ing ac­com­mo­da­tion from a hous­ing de­vel­oper, the so­lic­i­tor shall not re­ceive his re­mu­ner­a­tion from the hous­ing de­vel­oper and each party shall pay for the fees of his own so­lic­i­tor.

As the trans­ac­tion is gov­erned by the Hous­ing De­vel­op­ment (Con­trol and Li­cens­ing) Act 1966, the pur­chaser will only have to pay his so­lic­i­tor a fee of RM300 (if the pur­chase price is RM50,000 or be­low), 75% of the ap­pli­ca­ble scale fee (if the pur­chase price is in ex­cess of RM50,000 but not more than RM250,000), 70% of the ap­pli­ca­ble scale fee (if the pur­chase price is in ex­cess of RM250,000 but not more than RM500,000), or 65% of the ap­pli­ca­ble scale fee (if the pur­chase price is in ex­cess of RM500,000).

A brief sum­mary of the ap­pli­ca­ble scale fee for a pur­chase price of up to RM5,000,000 is as fol­lows:

> For the first RM500,000 a min­i­mum fee of RM500)

> For the next RM500,000 – 0.8%

> For the next RM2,000,000 – 0.7%

> For the next RM2,000,000 – 0.6% – 1% (sub­ject to

If pur­chaser chooses not to en­gage a so­lic­i­tor

Where a so­lic­i­tor acts for a pur­chaser in the pur­chase of a hous­ing ac­com­mo­da­tion from a hous­ing de­vel­oper, the so­lic­i­tor shall not re­ceive his re­mu­ner­a­tion from the hous­ing de­vel­oper and each party shall pay for the fees of his own so­lic­i­tor.

If a pur­chaser chooses not to en­gage his own so­lic­i­tor when buy­ing a hous­ing ac­com­mo­da­tion from a hous­ing de­vel­oper, he may at­tend at the of­fice of any so­lic­i­tor ap­pointed by the hous­ing de­vel­oper to sign the con­tract of sale or to com­plete the trans­ac­tion, pro­vided that the pur­chaser fully un­der­stands that such a so­lic­i­tor will not be act­ing for him.

In such cases, the so­lic­i­tor’s fees will be paid by the hous­ing de­vel­oper, giv­ing rise to the idea of “free le­gal fees”. The so­lic­i­tor act­ing for the hous­ing de­vel­oper is re­quired to ob­tain a cer­tifi­cate signed by the pur­chaser stat­ing that the pur­chaser does not wish to en­gage a so­lic­i­tor to scru­ti­nise the con­tract of sale for him. The cer­tifi­cate by the pur­chaser shall not be valid un­less it is signed by the pur­chaser in the pres­ence of a Com­mis­sioner for Oaths.

The Com­mis­sioner for Oaths shall not be the so­lic­i­tor at­test­ing the pur­chaser’s sig­na­ture or a so­lic­i­tor prac­tis­ing in part­ner­ship with the at­test­ing so­lic­i­tor or an em­ployee of the at­test­ing so­lic­i­tor’s firm. In ad­di­tion to ob­tain­ing the cer­tifi­cate from the pur­chaser, the so­lic­i­tor act­ing for the hous­ing de­vel­oper shall in­form the pur­chaser in writ­ing that he is not act­ing for the pur­chaser.

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