Banks should do their part to help aggrieved buyers

It was reported in the news media last month that some house-buyers were conned into buying housing projects that do not exist. If it does not cause revulsion and anger, it must at least be shocking to know that individuals and groups were allowed to sell and build houses without the basic requirement of the law, that is, a developer licence from the Housing and Local Government Ministry.

A slew of professionals from bankers to architects and from lawyers to engineers and the related local councils allowed dozens of unlicensed developers to sell and build houses to the unwary public. At last count, there were 195 abandoned projects undertaken by such “developers” some of whom had built on land which had not been zoned for housing but was still “agriculture” status.

These startling facts were revealed at a high-powered meeting on abandoned housing projects chaired by the then Chief Secretary to the Government, Tan Sri Mohd Sidek Hassan in April this year.

What is more disgusting is that at every step of the way, such a serious breach of the law could have been prevented. Even before the first blade of grass was cut to make way for housing, the flaws were staring in the face of the approving or financing authorities.

Because of the shortcomings of most of them, thousands of innocent and unwary buyers have been left in the lurch. They not only parted with their hard-earned money as downpayment but are also compelled to service their loans for what would have been a roof over their heads.

Lawyers for the deceitful developers prepared those contracts that were not the mandatory sale and purchase agreements regulated by the housing legislation.

Today, they are left in the quandary. Some continue to pay for their rented premises and continue to make monthly payments for their loans with no sight of their dream homes. HBA has been inundated with calls from victims of those ill-fated projects and crying for the Government, Bank Negara and professional boards intervention.

This whole episode yet again reflects the manner in which the laws of the land are not respected and upheld.

Banks and financial institutions (FIs) are so eager for business that they are indifferent to legalities. Their sales and marketing team has a pre-imposed target to meet until loans are disbursed recklessly. The banks implicated should have, as a matter of course, troubled themselves to find out if their transactions are tainted or not.

Saying that only some banks and FIs are involved does not exculpate other member banks and FIs; it is in fact an admission of culpability. Affected banks and FIs should let the public and the affected buyers of unlicensed housing projects know what they propose to do in the dilemma.

Renouncing your security interests in such cases and withdrawing all impending court cases against them would be a good start.

The Association of Bank Malaysia (ABM) should get its members to cooperate with the purchasers to release their security interest on purchaser's property where the purchaser has paid in full. Truth is they don't care that the purchaser has paid if the developer has not with their arguments of “no legal obligations”.

It is surprising that the alarm bells were not triggered when those developers did not produce evidence of the vital Housing Development Project Account (HDA) as required under the law?

It is therefore astonishing to note that those member banks did not do any additional security checks other than to rely on the sales and purchase agreements. Even for projects that are not within the Housing Development Act, the developer must obtain the requisite approvals and licences before being allowed to commence work.

Thus, the banks must surely have their strict criteria to abide by unless the new breed of bankers are not in the know. The issue of breach of fiduciary duty of care (to customer) will surely arise.

Perhaps, the banks should observe a moratorium on interest and instalment owed by nave and innocent victims till the project is revived.

Banks should take a proactive role to make their utmost efforts to revive such projects. Attempts should be made to delist those purchasers/borrowers who are now blacklisted by the banks and may never qualify for another loan! Not even to buy a second hand motor car.

Perhaps, the affected member banks should exercise their corporate social responsibilities (CSR) in this instance far deserving than others. These affected buyers must be assisted in tangible deeds and not merely words.

Chang Kim Loong is the honorary secretary-general of The National House Buyers Association, a non-profit, non-governmental, non-political organisation manned by volunteers. For more information, click www.hba.org.my or e-mail info@hba.org.my

By The Star

Zelan's share price falls 8.9pc

KUALA LUMPUR: Builder Zelan Bhd's share price fell by as much as 8.9 per cent a day after it said its contract in the UAE for a RM771 million property project was terminated.

The shares, which sunk to an intra-day low of 30.5 sen, closed 2 sen or six per cent lower than the previous day to 31.5 sen.

Zelan on Thursday said the owner of its Meena Plaza mixed development project in Abu Dhabi - Meena Holdings LLC - had given it 14 days' notice of its plan to end the contract via a letter on November 21.

Zelan, which had secured the project in 2008, is taking legal action to challenge the termination.

Zelan, which has been leveraging successfully on its ability to work as a consortium partner to other international players, also has a significant presence in the infrastructure construction sector in the Gulf region.

The Meena Plaza was to be the third building construction project for Zelan in the region.

By Bernama

IGB Corp inks 2 joint venture agreements

KUALA LUMPUR: IGB Corp Bhd has entered into two conditional shareholders agreements with Selia Pantai Sdn Bhd for the establishment of two joint ventures through equity participation of 70:30 basis each in Southkey Megamall Sdn Bhd and Dimensi Magnitud Sdn Bhd.

In a statement to Bursa Malaysia yesterday, it said that the JV was to acquire and develop the three vacant parcels of leasehold land situated in Plentong, Johor into a retail mall and/or mixed development as may be approved by the authorities.

By Business Times

Let the house buyers beware!

A file photo shows a house for sale in Alexandria, Virginia, outside Washington DC. In countries like the United Stat es and Canada, home inspections are a standard practice in the purchasing process. — EPA

To not educate yourself and learn from the mistakes of others only sets you up to be at best, disappointed and at worst, being house poor'

FOR many people, the purchase of a home is the most important financial decision of their lives. Therefore, it makes sense to approach the decision carefully.

The purchase of a home is unlike any other consumer product as it covers a lot of ground including legal, financial, technical and emotional considerations. To not educate yourself and learn from the mistakes of others only sets you up to be at best, disappointed and at worst, being “house poor”.

Caveat emptor! Let the buyer beware! The idea is that buyers take responsibility for the condition of the items they purchase, and should examine them before purchase. How true is this for the property buyers? It works well for buyers of completed units but not if you are buying an abandoned house to call it a home.

What happens if you have paid for your house and discover defects later which cost thousands of ringgit to repair? This would not have happened if you had used the services of a building inspector. His duty and responsibility is to give you a report on the condition of the house, and to check for permitted renovations, against shoddy renovations, before you buy.

The report would have given you room for negotiation with the seller too.

Most people are under the mistaken belief that the local council issuing the Certificate of Fitness for Occupation (CFO) will discover problems such as defects and shoddy workmanship when they issue it. They do not. Their job is strictly to ensure that there are no by-law violations or safety issues. They are not quality assurance officers and nor do they have that authority.

Furthermore, there could be problems with the house that are not necessarily related to by-law violations, yet have serious consequences for the new owner.

We believe that it takes three types of know-how to make a wise decision on a purchase: financial know-how; legal know-how and technical/engineering know-how.

In the first two, consultations with financial or legal experts are not a problem as those professionals, namely “buildings/home inspectors” are already in the market.

However, when it comes to the technical part, there is a lot of tension from the layman's point of view and the vendor's as getting a professional home inspection report has yet to be practiced by house buyers as one important process of the purchase. These building/home inspectors are themselves professionals like architects, engineers and surveyors.

The layman is only guided by his untrained eyes (to inspect), naivety assumptions. When it comes to quality and workmanship, new homeowners' problems are compounded by the fact that there is no degree of benchmark on buildings and its components for the layman to rely on.

In countries like the United States and Canada, home inspections are a standard practice in the purchasing process. Home inspectors conduct inspections of newly built or previously owned homes. Prospective home buyers hire home inspectors to inspect and report the condition of a home's systems, components, and structure.

They typically are hired either immediately prior to a purchase offer on a home, or as a contingency to a sales contract.

In addition to structural quality, home inspectors inspect all home systems and features, including roofing as well as plumbing, electrical, and heating or cooling systems.

After you have known what you are purchasing, the legal issue of sale and purchase contracts are the usual conveyancing routine in buying and selling transactions.

Checks will be made by the lawyers as to the arrears of quit rent and assessments rates at the land office and local council, respectively.

The potential buyers could also made checks at the utilities companies as to outstanding charges for service provided to the property.

Chang Kim Loong is the honorary secretary-general of The National House Buyers Association, a non-profit, non-governmental, non-political organisation manned by volunteers. For more information, check www.hba.org.my or e-mail info@hba.org.my

By The Star

Dijaya MD to take optional retirement?

PETALING JAYA: Dijaya Corp Bhd managing director (MD) Datuk Tong Kien Onn has decided to take optional retirement after more than 25 years with the property development company.

Business Times understands that Tong, 53, will be replaced by Dickson Tan Yong Loong, 31, who is currently the deputy managing director.

Tan is the son of Dijaya founder and major shareholder, Tan Sri Danny Tan Chee Sing, who is the younger brother of the high-profile Tan Sri Vincent Tan, founder of Berjaya group.

It is unclear when Tong would be leaving the company. He was not available for comment.

Tong and his team, under Danny Tan's leadership, have helped build Dijaya to its current size.

Dijaya gained fame for turning a 260 hectares of secondary jungle in Tropicana into a luxurious gated community, known as Tropicana Golf & Country Resort, where the property value has increased by 10-fold.

The company's market capitalisation is about RM1 billion and Danny Tan is aiming to triple that with a slew of property projects lined up for launching.

"It is the close working relationship that both Tong and Danny Tan have since 1983 that has made Dijaya successful.

"Danny Tan has been instrumental in building Dijaya and giving Tong and his management team the opportunity to help achieve his vision for the company," said a source close to the parties concerned.

Tong joined Dijaya in 1991 as senior finance manager, primarily responsible for the group's finance, accounting and treasury functions.

He was then promoted as general manager of finance and administration in 2000 and to a more senior position in the same year, before being appointed as the executive director in 2002.

Tong was appointed to the board of Dijaya on January 18 2002 and managing director on May 10 2007.

He currently sits on the board of Tropicana Golf & Country Resort Bhd, Berjaya Corp Bhd and several other private limited companies.

Dickson Tan, meanwhile, was named to the board of Dijaya on May 20 2009 and made the company's executive director on April 1 2010.

He was designated as deputy MD of Dijaya on October 8 2010 and is currently overseeing group corporate strategy, planning and risk management of the company.

By Business Times

UEM to sell Time by year-end

KUALA LUMPUR: UEM Group Bhd expects to sell its 45.03 per cent subsidiary Time Engineering Bhd, an information communication technology service provider, by year-end.

Government-linked UEM has been mulling over divesting its Time Engineering stake since 2010, which it sees as a non-core asset.

UEM has four core business divisions - expressways, township and property development, engineering and construction, and asset and facility management.

UEM Group managing director and chief executive officer Datuk Izzaddin Idris said the diversified group is currently in talks with local suitors and hopes to complete the sale by year-end.

"We have been trying to sell Time since day one and have been trying to find the right mechanism.

"Once the board of directors meets and approves the sale, we will call you (the media) in due course," Izzaddin told reporters at UEM headquarters here yesterday.

It was earlier reported that a few parties had expressed interest in taking over Time Engineering, but the group said it wanted to grow the business first before selling it.

Time Engineering previously owned a 24.74 per cent stake in Internet service provider Time dotCom Bhd before disposing of it for RM287 million in 2011.

As at 2011, its price tag was said to be at least RM166 million.

UEM chairman Tan Sri Dr Ahmad Tajuddin Ali said the sale is consequential and, once the mechanism is in place, will come into effect.

"Time is just not our core business ... just like Pharmaniaga, which was a very good business. But we sold it off because UEM is not involved in healthcare," said Ahmad Tajuddin.

As at December 2011, the no-longer listed UEM, which is the owner of the cash-cow PLUS highway, owned assets totalling RM26.3 billion with shareholders' fund of RM7.6 billion.

Employing 16,000 workers, UEM is currently busy with the Nusajaya project in Johor, Second Penang Bridge, KLIA2, the 116km Cikampek-Palimanan toll highway in West Java and the Brunei national housing scheme project, which involves the design and construction of 4,000 houses over four years.

By Business Times

New centre for homeless

Kuala Lumpur City Hall (DBKL) has identified a 2.02ha institutional land to build a new centre for the homeless.

Mayor Datuk Ahmad Phesal Talib said they were keen to assist the Women, Family and Community Development Ministry and Social Welfare Department to resolve the homeless issue in the city.

“The ministry and Social Welfare Department do not have a place to build the centre so it is only right we offer them the land.

“The ministry is very responsive to the idea and we are waiting to hold further discussions.

“The temporary relocation centre for Malaysians will be built by the ministry.

“We notice there are a lot of homeless people with jobs but they don’t want to rent rooms or houses because they want to save money. Hence, they take shelter under bridges.

“On the other hand, there are 13 non-governmental organisations (NGO) carrying out soup kitchen programmes,

“With this centre, we can organise the programmes in one place,” he said.

He added that DBKL would also be working with the Immigration Department to round up foreign vagrants.

Through joint operations with the Social Welfare Department and National Anti-Drug Agency, 312 vagrants, beggars and loiterers were picked up as of August.

The areas covered were Jalan Tuanku Abdul Rahman, Masjid Jamek, Jalan Silang, Central Market, Jalan Loke Yew, Jalan Pasar, Sultan Muhammad roundabout as well as areas surrounding Menara Maybank, Mydin Kota Raya, Bank Negara and the National Mosque.

StarMetro has been highlighting the homeless in the city, which is mainly due to the lack of affordable housing, welfare and services.

The city’s bridges, benches, sidewalks, abandoned and dilapidated buildings as well as platforms have become homes to an increasing number of homeless.

According to Social Welfare Department statistics, the number of homeless registered with the department was at 1,387.

At present, Anjung Singgah — a government-run centre — serves as a transit home for the homeless since April. The shelter accommodates up to 76 people, allowing them to stay up to two weeks.

There have been mixed feelings and reviews over the transit home and feed-the-poor programmes by NGOs. Some questioned the effectiveness of the transit home while some are not keen to have soup kitchens as it encourages homeless to continue living on the streets.

By The Star

Malaysia mulls rail link with Asean, Chinese cities

HIGH-SPEED TRAINS: Several options currently being explored for Kuala-Singapore route

MALAYSIA is studying the possibility of linking the high-speed rail (HSR) system from Kuala Lumpur to Thailand, and to other Southeast Asian countries, says Transport Minister Datuk Seri Kong Cho Ha.

“We want to provide connectivity beyond Thailand. But to do this, you would need government to government understanding and we have not come to that yet,” Kong said.

“High-speed trains today are more convenient and is a faster mode of transportation, from city to city , than flying,” he said yesterday, at the signing of a memorandum of arrangement (MOA) between the Ministry of Transport and China’s CSR Group.

It is learnt the government is mulling providing rail connectivity from Kuala Lumpur to Thailand, Laos, Vietnam and several cities in China.

The Land Public Transport Commission (SPAD) is currently doing a study on the HSR to link Kuala Lumpur and Singapore. The study is expected to be completed by the end of the year. If found feasible, SPAD will call for pre-qualification bids by mid-2013.

Kong said several options and alignments are being explored for the Kuala Lumpur-Singapore route.

“The train could either runnon-stop from Kuala Lumpur to Singapore, or start from KL Sentral and have stops at the Kuala Lumpur International Airport, Seremban and beyond that,” he said.

Asked whether the government was eyeing the use of the magnetic levitation (maglev) technology, Kong said no decision has been made.

The MOA involves the building of a RM400 million CSR Rail Centre in Batu Gajah, Perak by CSR Zhuzhou Electric Locomotive
Co Ltd. It was witnessed by Prime Minister Datuk Seri Najib Razak, Kong, China’s Ambassador to Malaysia Chai Xi and CSR vice-president Fu Jianguo.

Meanwhile, Kong said participants at the recent Innotransconvention, the world’s biggest rail industry event in Berlin, Germany have expressed interest to work on railway projects in Malaysia.

Kong, who was at the conference, said Malaysia was also invited
by several European and Asian companies to use their technology.

The companies included Bombardier, Rotem, Alstom, CAF, Ansaldo, Hitachi and CSR.

“There are many things happening in the railway sector here. We have the MRT, the LRT extension, ongoing double tracking works, with the possibility of the HSR being implemented.

“There is also the rapid transit system from Johor Bahru to Singapore.

So there is a lot of potential for rail technology and suppliers,” Kong said.

By Business Times

MAAKL: No tie-up with Listari Marina

PETALING JAYA: MAAKL Mutual Bhd says it has no tie-up with developer Listari Marina (M) Sdn Bhd in a property project or sale of unit trusts.

Referring to the StarBiz article last Friday on Listari Marina’s recent event to publicise a mixed development project in Malacca, MAAKL said a unit trust consultant who had been at the event was never authorised to attend the ceremony on MAAKL’s behalf.

The consultant was not authorised to receive any pledge or mock cheque or to make any commitment for and on behalf of MAAKL, it said in a statement.

It added that it had not received any investment pledge, mock cheque or actual payment from Listari Marina.

“Prospective investors are advised to note that MAAKL is not permitted at law and do not and will not issue any free unit trust.

“All sales of unit trust are and will only be done for valuable consideration, in accordance with our prospectus and the relevant laws and regulations,” it added.

On Friday, StarBiz reported that little-known property developer Listari Marina was building a mixed development at Klebang, Malacca, with a gross development value of RM183mil.

In collaboration with MAAKL, it was reported that Listari Marina would offer purchasers free mutual fund units equal to about 8% to 10% of the property purchase price and also free MAAKL life plus Insurance policy to eligible and qualified purchasers and investors.

By The Star

Delayed project to be ready soon

Close to completion: The Taman Selayang Permata housing development project is 80% completed.

AROUND 20 housebuyers who had initially planned to voice their dissatisfaction over the developer’s delay in completing the Taman Selayang Permata project, received good news instead during a visit to the site.

Some of the buyers, who have waited as long as six years since the signing of the sales and purchase agreement, were relieved when the project development company’s managing director Lin Lih Sen said that the project would be completed in two months.

“Currently, the project is 80% completed. What is left is the landscaping and infrastructure work,” he said.

Lin said the delay was caused by the lack of experienced engineers and consultants.

“We had previously submitted the water supply system layout plans for Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) but it was rejected.

“We revised the plans and only received approval after submitting 13 plans,” he said, adding that it had delayed the project for 39 months.

“We also need to repair the sewage system and once Indah Water Konsortium (IWK) has issued us a support letter, it will help us obtain the Certificate of Fitness for Occupation (CFO) from Selayang Municipal Council (MPS) for the houses,” he said.

The housing development

consists of two projects that include 28 units of three-storey semi-detached houses as well as 84 units of two-and-a-half storey terrace houses.

Work on the terrace houses, costing from RM347,000 to RM534,000, started on July 22, 2005 while construction of the RM687,000 to RM1.28mil semi-detached houses started in August the same year.

Both projects were scheduled to be completed in 2007.

To-date, 77 units of houses from both projects have been sold.

Representatives from the Housing and Local Government Ministry (KPKT) were also present during the site visit.

Selayang parliamentary coordinator Jessie Ooi said a temporary committee consisting of housebuyers who faced the problem of delayed projects had been formed to discuss the issue.

“I will also liaise with the developer and KPKT to provide them full support on the development,” she said.

Temporary committee chairman Ng Chai Nea, who have waited an extra two years since the signing, said she had sold her house and was forced to rent a place while waiting for her new house to be handed over.

“I hope the house will be completed on time as I wish to celebrate the coming Chinese New Year in the new house,” she said.

By The Star

Making all housing more affordable

WHEN I watched Usain Bolt cross the 100m line in an Olympic record of 9.63 seconds during the recent concluded Olympic Games, I saw a young focused sprinter with only one objective in mind; to cross the finish line in the shortest possible time. He amazed the world with his stunning performance again.

This reminds me of our journey in making all Malaysian housing more affordable. It is a race that requires the same amount of focus from all relevant stakeholders including public sector which is the Government, and private sectors, i.e. the property developers, home buyers and NGOs. Furthermore, like in a race where the sprinters have a sight on the direction and goal, all stakeholders in the housing industry should be aligned to the same goal before starting the race.

To understand what exactly drives up property prices, we need to analyse the various factors that influence the price of a housing development in Malaysia. This may help us identify the root cause and provide us with the correct remedies to make Malaysian housing more affordable and sustainable.

Let's begin by looking at what are the major cost components of a property project. Twenty or 30 years ago, land acquisition was only about 5% to 10% of a project cost, but nowadays, it can take up to a sizable 20% to 30% of the whole development budget before any value-added works are carried out on the land itself.

Land prices are ever rising due to scarcity of urban land especially in the major cities. For example, a piece of land that used to cost RM10 per sq ft in Mont' Kiara during the late 80's now can cost up to RM300 per sq ft. With rising land cost “eating” up a significant portion of the development budget, house prices automatically increase as a result.

The next major cost is the holding cost and construction financing cost of the project. The longer it takes to complete a project, the higher the financing costs of the project which will then increase the price of a home.

I mentioned this before in my earlier articles that property projects are sometimes subjected to one, two or more years of gestation period to obtain all the necessary approvals from the relevant authorities before they can be launched. The lengthy approval period will definitely affect the holding costs, and slow down the supply of housing units. If this approval time is not shortened, the rising demand will only further push the prices up. This is the basic market influence of supply and demand.

Another factor that influences the cost of housing, as highlighted by developers surveyed during the recent Real Estate and Housing Developers' Association (Rehda) media briefing, is the unsold and unreleased Bumiputra units.

According to the latest half-yearly property industry survey by Rehda, the number one reason for unsold properties comes from unreleased bumiputra units and has been so for the past two years.

With the requirement to hold on to the unsold bumiputra units, the additional holding cost is inevitably spread out to all the other house buyers in the form of higher priced units. Unreleased bumiputra units may also create a false impression of supply shortage in the market, and these can cause the prices to increase again. While we recognise the need for a bumiputra housing policy, the various states should agree on a transparent, auto-release mechanism to release bumiputra units if unsold beyond 18 months of launch, to make houses more affordable for everyone.

Apart from land cost, holding, and construction financing costs, another cost component that adds to the price of properties is utilities costs. In the past, utility companies would be expected to build substations and water storage towers as well as lay electrical cables and water pipes. Today, all these are required to be completed by developers themselves.

In a roundtable discussion on housing affordability, Housing Buyers Association secretary-general, Chang Kim Loong highlighted that the privatisation of utility companies have turned them into profit-oriented companies. Taxpayers' monies are no longer utilised to provide the basic necessities that they have paid for. This ends up making houses cost more because home owners end up bearing the cost of the infrastructure for these utility services.

In the illustration mentioned at the start of this article, a sprinter must stay focused on the targeted goal of winning the race without mental and physical disadvantages before and during the sprint. Imagine if Bolt needed to run against a headwind and carried a few pounds on his back all along the race. Would he still able to break the Olympic record and become a legend?

In the race to make the price of all housing units more affordable, the issues of high land cost, lengthy approval period, additional utilities expenditure and unreleased bumiputra lots are the burdens that are holding houses back from becoming more affordable. Solve these dilemmas and we will begin to break records.

● FIABCI Asia-Pacific Regional Secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

By The Star

Tips on hiring a home contractor

Home repairs can be expensive but when you lack the knowhow to do it yourself or just don't want to get your hands dirty, getting an expert is a must.

However, we've all heard the horror stories of someone hiring a real bonehead of a workman, or worse a con man contractor that runs off with every penny even before that first brick can be laid!

To help you avoid these situations, the following are some tips to consider when hiring a trusty handyman to work on your house.

Get a licensed contractor

Getting a licensed and insured contractor is considered a “safe bet” in ensuring the repairs you're seeking will be up to standard and professionally done,” says Jamal Aziz, who admits to having done “extensive renovation work” to his house.

“It's also a good gauge to determine if the contractor is properly qualified and knows how to perform the job.

“It's also a big help if the contractor is insured, to cover for any potential damage that might be caused to the house, or if a worker gets injured during the duration of the work,” he says.

Jamal does point out that a licensed and insured contractor can be more expensive.

“Because of their credentials, they can demand top-dollar (ringgit) for their services. That's why a lot of people prefer to get a contractor that might not be licensed (on paper), but is reputable for doing good work at reasonable prices.”

Get good referrals and recommendations

Most times, people tend to hire contractors that have been recommended by a friend or family member.

“The best credential on a contractor's CV is, of course, the good work he's done and the referrals from satisfied customers,” says Frankie Liew, who has been a contractor for over 20 years.

Jamal says it's also important to ask friends or family members how the service was during the repair period.

“Was it professionally done? Were there delays? Was the price reasonable? These are questions you should ask before determining if the contractor is worth hiring.

“However, every job is different. If you can get multiple referrals for one contractor, even better. I have experienced satisfactory work from a particular contractor, but the person I recommended him to did not think too highly of the job that was done.”

Jamal also says if budget is an issue, one could try getting referrals on a few contractors, if possible.

“Some contractors are all-rounders, while others might be good at specific jobs.”

Know what you want

Once you've decided on a suitable contractor, explain to him your terms and conditions.

“You need to be specific on what you want or how you want it done. A contractor might suggest the most expensive items or fittings but if it's not within your budget, you should explain it upfront,” says Tan Chee Meng, who recently renovated his house.

“Also, don't be afraid to ask your contractor any questions that needs clarifying, such as cost, duration of the repairs or if he's done similar jobs in the past. The answers he provides could provide a gauge on the type of contractor he is.”

Have it in black and white

Many people take it for granted that once a contractor has been hired, all the terms and conditions agreed upon would be fulfilled.

“Things can always go awry. Though it can be a hassle for a lot of people, it's sometimes best to have the agreement in writing,” says former legal assistant Sam Cheong.

He says drawing up a contract would help protect both the contractor's and customer's interests.

“The contract should have details such as the tentative duration of the repairs, problems that may arise and how to rectify them. It should also have a clause on what needs to be done if there is a delay that is neither party's fault.”

Get a good deal

The biggest issue that arises when hiring a contractor is cost. The customer wants the lowest possible price while the contractor will try to maximise his profits.

“It's always best to check with friends or people that have done similar jobs to estimate how much it would cost. Obviously, if your contractor is asking for too much or too little, something is wrong somewhere. Unfortunately, most people are happy when it's the latter,” says Cheong.

“If your renovation is unusually cheap, your contractor could be cutting corners,” he warns.

Time of payment can also be an issue. Do you pay your contractor before or after he's completed the work?

“Most contractors usually ask for some kind of a deposit before the work starts. The balance is paid after everything is done. You should not pay everything to him prior to the job,” says Jamal.

“This is because the contractor might end up taking his own sweet time to complete the job or, worst still, run off with your money! I usually pay half before and half after,” he says.

By The Star

MBSB proposes measures

PETALING JAYA: There are measures that the Government can implement such as waiving stamp duty for first home scheme and certain income tax for developers from that portfolio, says Malaysia Building Society Bhd (MBSB) president and chief executive officer Datuk Ahmad Zaini Othman.

“First-time house buyers are an important area and the Government should look at how to encourage first-time houseowners.

“How you encourage developers to provide a certain portion of the scheme to be affordable for first-time houseowners is also important,” he said after launching MBSB Cheeky Savings Club’s “Over the Top”, a reality TV programme for children.

MBSB Cheeky Savings Club, launched in April 2011, aims to increase its account holders to 50,000 in one year from close to 20,000 to-date.

By Bernama

The real estate open book

President of Reapfield Properties David Ong (left) and Kho have come together to share over four decades of experience knowledge in a priceless tell-all guide.

Reapfield CEO Gerard Kho answers questions about the evolution of Malaysia's real estate sector and his book Thrust Real Estate Riches which he co-authored with founder and president David Ong. This e-mail interview was done in conjunction with BookFest@Malaysia 2012. Star Publications (M) Bhd is a media partner.

1. What prompted you to write Thrust - Real Estate Riches and how long did you take to complete it?

We initially took on this writing project as part of a branding exercise but within writing about 10 pages of the book, we got bored with the contents and decided to change direction to one where we made a choice to tell the industry and our customers what Reapfield was doing and has done in the last 28 years to arrive where we are today, but more importantly what we are doing to ensure that we constantly remained competitive. We have shared in this book as much as we could what we did as an organisation. There are lots of practical information anyone running a real estate agency can adopt. Many of the principles about how to grow a business profitably while adding value to people's lives are also inspiring. The book took us 15 months to complete.

2. There are so many books on properties in Malaysia today by investors and those involved in the property sector. How different is your book from the rest?

We write not from the angle that we know all there is to know in the sector, or that we are the best in the industry. We don't provide the fish but we teach people how to fish. We have shared all the “secrets” we use in our organisation to the point that we are a real open book. By sharing everything we know, we walk the talk. Second, we are now forced to find new and innovative ways to run our business so that we are able to share more in our next book.

3. What was the most challenging part of writing Thrust?

The most challenging part was keeping to the timeframe to complete the book and at the same time to be succinct about what we wanted to share. There is a lot more we could have shared but we were limited by time because we wanted to get it published.

4. How have the many years living in Australia shaped the book?

It has helped me see that the real estate business is the same everywhere. Real estate business is never about the property. It is about the people whom we serve. People are all the same everywhere. At the fundamental level, they want to be served something of value and in return for that value, they will reward you with a well deserved “fee.” The thing many of us have done wrong in the past is to focus on sales, sales and more sales. In our pursuit of sales, we have forgotten about people. If we place people first, be it our customers, our own agents, our fellow colleagues in the real estate industry and the industry partners we work with, we will surely be one step closer to creating followers for life. Be it Australia, Singapore, Malaysia or the United States, the real estate industry is all about the people first. The property just happened to be the item of exchange.

5. How has it shaped your views as a real estate professional now that you are back in Malaysia and leading one of the largest real estate company with about 800 negotiators?

People come first. It is not about being number one in the industry. It is about building our people and agents, to be the best, the most productive, to have the highest standard possible and to have ethics. Only then will they be able to service the customers.

The market will continue to evolve and all of us in the profession will need to be humble enough to grow and to learn, to unlearn and relearn constantly. Only when we adopt this attitude can we succeed. There is a huge opportunity for Malaysians to train and nurture the best real estate agents in the world because of the nature and diversity of our people.

6. How different is the Malaysian property sector compared with Australia's?

The pace of real estate transactions is a lot faster here in Malaysia. People are more willing to learn and less sceptical of new ideas.

Though there are many areas we can improve, it is more exciting to be in Malaysia because there are still so many opportunities for the real estate market to grow and for the real estate industry to develop. We are probably what Australia was 10 years ago or so. Look at the number of cranes, the amount of construction and the way people buy and sell properties. The pace signals the optimism. Despite the inefficiencies in any country and system, there is opportunity for growth. It is terribly exciting to be in Malaysia right now as it is just only beginning to boom! We are on the threshold of being a developed nation status! I wouldn't want to be in any other place but a developing nation.

7. How do you see the property sector for the next six months of this year, and in 2013?

The next 6 months may see (the price of) properties in the key areas in Klang Valley moving upwards as the number of properties available for sale continue to fall. These are properties that are priced correctly by motivated sellers. We have noticed increasingly that the asking price of properties are on the rise while the number of listings continue to decline. This will create an upward pressure on prices. Agents in the last three months are finding it difficult to get listings that are sellable. Buyers are willing to purchase properties that are priced correctly In the short term, prices are expected to increase, or at worst, remain stable. There is much optimism. The transaction numbers are less this year compared with same time period last year. This is due to properties not being priced correctly. We have experienced earlier this year a decreased volume of properties transacted, but an increase in the total value transacted. This is attributed to the fact that property prices have increased in that period compared with same period last year.

8. When did you return to Malaysia and what prompted you to make this move?

I returned to Malaysia four years ago. I was offered to help grow the Reapfield group, to streamline the organisation and to bring out the best of it. It was a real challenge for me but it was a great opportunity. Since then, we have almost doubled the fees collected and the number of negotiators.

9. Are there plans for a second book?

Yes, there will be. Writing a book brought clarity to the leaders in Reapfield. It gave us focus. It also allowed us to share with the industry the inner workings of our organisation. Sharing our experiences was one way we could contribute back to the industry in a productive manner. Our wish is for more people in the real estate industry to be more profitable and to build organisations and businesses that last beyond the leader's time. This is part of our succession planning and we want to help more businesses to give priority to this area.

10. As a real estate professional, what, in your opinion are the three most important things a property purchaser should consider besides location in today's fluid and volatile market?

You must consider the following:

● Know how to leverage your limited financial resources to get more into property investment. Have the end in mind;

● Don't buy just because there are great financing schemes that makes it easy for you to buy; and

● Get to know as many real estate agents as possible. They can profit you in your journey in property investment.

Kho will be present at the BookFest@Malaysia on Aug 18 between 3pm and 3.45pm. The launch will be held from Aug 18-26 (10am-10pm) at the Kuala Lumpur Convention Centre. Admission is with purchase of the BookFest catalogue, at RM2.50 per entry or RM10 for multiple entries over the nine days. Catalogues are available at all Popular and Harris bookstore outlets nationwide and at the BookFest entrance. Entrance is free for students who are 18 years old and below and for senior citizens aged 60 and above. For more information, visit bookfestmalaysia.com.

By The Star

Excitement over landmark project

Lancaster House is a mansion at the affluent St James district in London. It is a landmark that has gained prominence in recent years after it was used as a location in the award-winning British movie The King's Speech.

The building has now become the British Business Embassy and an Olympics investment conference is being held there until the Games are over.

While the Olympic Park will see men and women in track suits, the British Prime Minister is hoping to see more people in business suits visiting Lancaster House.

There are good reasons the fact is that Britain is in the longest double-dip recession in 50 years and official figures released recently showed that the number of inward investment projects has fallen for the third year in a row.

An estimated 4,000 top businessmen are expected to watch the games and David Cameron is hoping they will take time off to do some business.

If the athletes are looking at gold medals, the PM is looking at £1bil in new deals.

He is well aware that the Olympics have bankrupted some host cities.

The Olympic Park is located in East London, regarded as the downside of London, and the naysayers have questioned whether the location could be transformed after the security fence of the Games comes down.

But of all the business deals that have been spoken about, the biggest eye opener is the £8bil development of the Battersea power station.

On the day that I arrived in London last Thursday, I switched on the television in my hotel room to watch Cameron talking about the Battersea project, Pink Floyd and Malaysia.

He had spoken about his trip to several countries including Malaysia on an investment tour and he singled out the importance of the development of Battersea which involved a consortium comprising SP Setia Bhd, Sime Darby Bhd and the Employees Provident Fund.

The same day, London Mayor Boris Johnson hailed the project, which he described as a regeneration scheme, where an estimated 16,470 homes would be built.

More importantly, new shops and businesses could create 33,000 jobs 13,000 permanent.

That is the sort of excitement Malaysia has created in London as the city has an unemployment rate of 8.9% but thanks to the Games, there was a 1.2% dip.

The Battersea power station is located on the south bank of the River Thames on a 15.82ha site and represents one of the last few opportunities for an important development in London.

An extension of the Northern Line tube network will see a ride of eight minutes from Westminster and 12 minutes from the City.

The Malaysian consortium, it is understood, managed to beat Chelsea Football Club owner Roman Abramovich to it for the site because the local non-governmental organisations were unhappy with his plans to set up a stadium there along with other mixed development.

Residents in the area feared that the prices of their properties would drop if a massive stadium was built, as it would result in horrendous traffic congestions.

The British press has given positive coverage to the Battersea project.

For the EPF contributors, a property investment project in London not in the other parts of England is a guarantee for getting investment returns.

There are many property buyers but little land or properties for sale because of the strict rules against high-rise buildings in London.

The reality is that land does not grow in London and it has proven to be recession-proof as far as properties are concerned because the City is an international hub.

Well, Cameron like the actor Colin Firth who portrayed King George VI in the movie delivered a fantastic speech to the listeners which comprised of investors and businessmen.

But Cameron will be judged by how many medals he can collect before his term is over. That's what counts finally.

By The Star

MBSB to sell property unit to Ken Holdings for RM56.1m

KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) is selling its 100% stake in its property development unit Gadini Sdn Bhd to Ken Holdings Bhd for RM56.17mil cash.

MBSB said on Wednesday it was selling the 3.97 million shares for RM40.56mil cash.

“Total cash proceeds to be received by MBSB from the proposed disposal will be RM56.17mil,” it said, adding the amount included RM13.61mil which was earlier advanced to Gadini and tax liabilities of RM2mil.

To recap, on Jan 7, 2009, MBSB announced it Gadini had entered into a sale and purchase agreement to disposes of several properties in Johor to Sazean Holdings Sdn Bhd for RM70mil.

Subsequently, Sazean decided to novate all its rights and liabilities under the sale and purchase agreement to Ken Holdings' unit, Ken Property Sdn Bhd.

MBSB then entered into the share sale agreement with Ken Holdings to sell Gadini.

By The Star

CapitaLand sells stake in UMLand

KUALA LUMPUR: Singapore’s CapitaLand sold its 20.75 per cent stake in United Malayan Land Bhd (UMLand) to a private firm, Seleksi Juang Sdn Bhd, that is now making a takeover offer for the rest of UMLand.

It intends to take UMLand private at RM2.50 a share, a 5.9 per cent premium to its last traded share price of RM2.36.

It bought the stake from CapitaLand also at RM2.50 a share, or RM156.45 million in total, in a direct business transaction yesterday.

Seleksi Juang’s shareholders include Datuk Ng Eng Tee, who is UMLand’s major shareholder and deputy chairman and executive director.

By Business Times

Selling a haunted house

SELLING a house, even in a stable property market, can be quite a challenge. But what if the home you’re trying to dispose of happens to be haunted?

It’s not a common occurrence, but once in a while, you (or someone you know) may end up running into a property transaction where the house was the scene of a horrific crime and is now home to some ghostly inhabitants.

According to an article by US-based Realtor Magazine, haunted properties fall within the category of “stigmatised properties,” or real estate that is not defective in any physical manner, but due to psychological or emotional factors, may have a reduced value.

Among the situations covered under the title of “stigmatised” is a property that was the site of a murder, suicide, alleged haunting, or “other parapsychological phenomenon,” it says.

And according to Reuters, stigmatised homes typically sell for 10% to 20% less than comparable homes.

On the local front, all of this is compounded by the fact that most Malaysians are generally quite superstitious, meaning that anything associated with the dead is considered taboo and should be avoided like a plague!

One local property realtor concurs that a haunted house is much more difficult to sell.

“It’s a known fact that it will affect the marketability of the property and may even take a long time to sell it.

“If it’s known in the market that someone was killed there, the price could be affected,” he says.

In a worst case scenario, if your home is haunted, it may never get sold, says VPC Alliance (Malaysia) Sdn Bhd director James Wong.

“There are many abandoned houses in Malaysia that are supposedly haunted and have been vacant for a long time because they are difficult to sell,” he tells StarBizWeek.

If you happened to own a house that has a macabre past and plan to put it on the market. What can you do to increase the marketability of this supposedly haunted dwelling?

Rumours and hearsay

A house could falsely be considered haunted due to rumours or inaccurate stories.

“Sometimes it’s all just a matter of hearsay. No one may have actually experienced anything eerie, but people just keep talking about it,” says Malaysian Institute of Estate Agents president Nixon Paul.

“They may say things like ‘don’t go to that place because it’s haunted,’ and then the story just stops there. Nothing supernatural is really experienced and the house (is stigmatised) due to a malicious rumour.”

Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng points out that people can get easily carried away by stories they read or movies they watch.

“Sometimes movies can have a psychological effect on people. But after they live in the house for a while and nothing bad is experienced, everything is fine.”

Sometimes, the imagination can play cruel tricks on the mind. If you’re convinced that you have spiritual squatters living with you, get an expert to examine the place.

“It’s always best to get to the bottom of things – just to be sure,” says Vincent Liew, a seasoned roof repairman who also does household repairs.

“The sounds you hear could be caused by the wind and the vibrations you feel from loose fittings or a heavy vehicle passing by. If you’re seeing shadows, check to see if they are caused by something external, like an overhanging tree branch or moving curtains, for example. Try recreating the sound yourself.”

If the house you own is looking a little dilapidated, giving it a ghostly appearance, all it may need is some sprucing up or a fresh coat of paint.

KL Interior Design executive designer Robert Lee says “a house looks like it is haunted” because of the lack of maintenance.

“If your house is overgrown with weeds, cut or trim the bushes. If the wall or fence is damaged, fix it. Some properties are so badly neglected, it can actually look abandoned or even haunted. This won’t boost your resale value,” he says.

If, after everything you’ve done and you’re still convinced that the property you have is haunted, then it’s best to get an expert to deal with it.

“Getting help from a priest or a medium can help deal with this,” says Lee.

Disclosure

If, after everything you’ve done and your spooky inhabitants refuse to go away, then the next thing you need to consider is whether to disclose to the prospective buyers that the house you’re selling is indeed haunted.

In certain countries, such as the United States, it is a legal obligation for the seller to disclose information about the property’s history, for example the house may have been the scene of a gruesome crime such as murder.

Fortunately for sellers, no such law exists in Malaysia.

“In this case, the doctrine of caveat emptor (which is Latin for “Let the buyer beware”) applies,” says one industry expert.

“Here, the onus is on the buyer to do research about the property’s history. There is no onus on the seller or agent to disclose anything,” he says.

Kuala Lumpur-based lawyer Dinesh Kanavaji concurs that there is no rule for a seller to disclose that his or her property is haunted.

“There is no legal obligation. But then, which seller would want to disclose that anyway? Of course, morally, you should disclose.

“Either way, a buyer should do the necessary research first if he’s heard things about the house,” he says.

Not a bad thing

To some buyers, a haunted house may be more of an attraction than a deterrent.

“Not everyone is superstitious or cares if a house is haunted. As long as they have a roof above their heads, that’s all that counts,” says one industry observer.

“In a hot property market where prices are sky-high, a haunted house, which would fetch a lower price, is more likely to attract prospective buyers in droves – assuming of course they’re not concerned about sharing their abode with some ghostly housemates,” he adds.

In an article last year, online business portal Business Insider reported that investors sometimes look to buy a haunted house in the hope of gutting the premises, building a new abode and reselling it for a larger profit.

“Other times, adventurous business owners purchase haunted houses in order to transform the properties into bed-and-breakfast, restaurants, or local businesses that will attract curious visitors.”

While many believe that it’s detrimental to own a haunted property, whether residential or commercial, some believe that the impact would be lesser if it’s the latter.

“If it’s residential property, it will have a bigger impact because people are living there. That’s not the case for retail premises because you’re not living there, so it’s not too much of a concern,” says Richard Chan, past president of the Malaysian Association for Shopping and Highrise Complex Management and national committee member of the Building Management Association of Malaysia.

“Of course it does not help if the (commercial) property is haunted, but it’s not detrimental,” he says.

Chan adds that sometimes it’s best to not know what you’re buying into.

“What you don’t know won’t hurt you,” he says.

Another industry observer, meanwhile, believes one has to worry more about the living than the dead.

“It’s better to live next to a cemetery than an unruly neighbour,” he says.

By The Star

EPF buys 5.04% stake in YNH

KUALA LUMPUR: The Employees Provident Fund (EPF) has emerged as a substantial shareholder in YNH Property Bhd with an effective interest of 5.04% in the property company.

The EPF bought 20.74 million of YNH's shares on June 6, circulars issued to Bursa Malaysia showed.

Scotland-based Aberdeen Asset Management PLC had also acquired an additional 588,500 shares of YNH on June 5, increasing its stakes to 12.81%, documents showed.

By The Star

Malaysians in UK shopping spree

GOOD INVESTMENTS: Sime Darby and SP Setia join the likes of AirAsia and Berjaya Group owners to buy key British assets

AT last, it took two Malaysian giants to defeat Russian billionaire Roman Abra-movich's Chelsea for prized assets.

The mighty Barcelona and then German heavyweight Bayern Munich failed to beat Chelsea for the coveted Champions League trophy. Before that, British powerhouse Liverpool was frustrated by the Blues for the English FA Cup.

But Chelsea was denied another prestigious trophy, a non-footballing one though, by Sime Darby Bhd and SP Setia Bhd.

Malaysia's oldest conglomerate and largest property company, respectively, teamed up to shock Chelsea (and 14 other bidders, including British property magnet Godfrey Bradman) and win the tender for the iconic Battersea power station.

Sime Darby and SP Setia are the latest Malaysian investors who find Britain, especially London, extremely attractive as an investment (and playground) location.

Permodalan Nasional Bhd already has three properties in London in One Exchange Square, 90 High Holborn and Milton and Shire House.

Berjaya Group founder Tan Sri Vincent Tan has bought Cardiff City football club. So has AirAsia's Tan Sri Tony Fernandes with his Queens Park Rangers football club.

Tabung Haji is currently shopping for London assets as part of its plans to splash some RM1 billion on overseas investments.

But what makes Britain so compelling? Are Malaysian investors risking themselves too much? Are they paying too much for the assets? Why not invest in assets back home, which are cheaper, given the exchange rate factor?

Property experts say Britain is compelling because there are few barriers to buying and selling commercial and residential assets there. It also has a liquid market with good legal and regulatory infrastructure.

In short, buying and selling properties there are reliable and easy.

When you buy a building there, as the investor and owner of the building, your responsibility is just to make sure the building is there and collect your lease payment. The responsibility for maintaining the building, both inside and outside, rests with the tenant.

Back to the Sime Darby-SP Setia venture.

The RM2 billion price tag for the old power station that once graced the cover of British rock group Pink Floyd's "Animals" album in 1977 is surely hefty. But when comparing with other prime land parcels in London, it appears cheap.

The former parcels have transacted for more than STG1,000 (RM4,900) psf, but the Battersea power station, which sits on a 14.56ha site on the south bank of River Thames, works out to STG235 psf.

Despite the current economic contraction, UK properties remain favourable given the ultra-low interest rate environment, ongoing geo-economic uncertainties and relatively weak British pound.

According to the latest Nationwide House Price Index, British house prices rose 0.3 per cent quarter-on-quarter but were lower by 0.7 per cent year-on-year.

For office spaces, London properties earned an average rent of RM497.95 psf, the highest among 38 key European cities.

So aren't Sime Darby and SP Setia getting (or buying) a great trophy?

By Business Times