House buyers, learn your rights

I RECENTLY moved into our new house in Sungai Ramal Dalam. I bought the property back in 2012 and we received the vacant possession in January this year.

The journey towards moving into this property has not been a smooth one and I thought I should share some of the lessons.

When I first visited the site in 2012, only the show house was available for viewing. All the other units were blocked off because they were still under construction.

So the purchase was under the “sell-then-build” scheme. The developer sells a property that is not yet built, and the buyer pays for something depicted by the show unit, but in reality you don’t really know what you will get. The developer advertised it as a gated and guarded community of just 26 houses, and the show unit was quite decent.

We liked the concept and decided to go ahead anyway, despite a friend expressing doubts about the reliability of the developer because they are just a small company.

Skip forward to January this year: a letter arrived saying that the time had come for me to take the keys, or in jargon-speak, to take over the vacant possession. When I went to the developer’s office in Hulu Kelang, I was told to sign a letter confirming that I agreed to accept the property.

They also told me that the Certificate of Completion and Compliance (formerly called the CF) should be ready within two weeks and I should not do any renovation or move in before receiving it.

It was soon after this that problems started to occur. When I inspected the property more thoroughly, I discovered that the property was not yet satisfactorily completed.

Taps and doorknobs were missing. Some tiles were not properly fitted. The window frames were of different shades. Electrical sockets were not installed. The back garden slopes with a gradient that renders the area more or less unusable.

And the developer has not even applied for permission to build a gated and guarded community, despite advertising it in their sales brochure.

To make matters worse, the CCC did not arrive within the promised two weeks. I only received it last June. Throughout all this, I sent notice after notice to the developer asking them to rectify the defects.

They were extremely slow to respond. It was only then that I realised I should not have accepted the vacant possession without the CCC.

I then found the National House Buyers Association, and met with their secretary-general Chang Kim Loong who happens to be a fellow columnist in this newspaper. I learnt a tremendous amount from him and let me share some of the lessons here. If you are planning to buy a property and you don’t want to face the problems that I am having now, I suggest you read on.

Firstly when you buy a property, you should get the Sale and Purchase Agreement (S&P) checked by someone with proper knowledge, or appoint your own lawyer.

The two lawyers you deal with at the early stages represent your bank and the developer. They don’t represent you and they don’t have your interest at heart. You need your own lawyer.

Secondly, read the S&P yourself, carefully. With the benefit of hindsight, I am amazed at how I simply signed on the dotted line without reading the papers carefully first.

The document contains important information about your rights. And you should read it in greater detail if the developer says to you that the S&P is “just a formality”.

Thirdly, learn your rights as well as the procedures in the purchase.

If only I had taken some time to learn the ropes, I would have known that I should be extremely worried if a developer hands over vacant possession without a CCC (and promises you he will get it done within two weeks). Even more so when they start saying things like “we are all Malays and we should help each other”. Fourth, the sell-then-build scheme benefits mainly the developers and not necessarily the consumers. You are being asked to pay for something that is not even built yet and you never really know what you will eventually get. If the developer is rogue, then what you pay for is not necessarily what you will get.

In my case, the show unit has a concrete wall in the backyard, but my unit has just wire fencing. When I asked the developer, he responded that the S&P does not compel him to build a unit that is exactly the same as the show unit. Since it was a sell-then-build scheme, there is not much that I can do.

Recently Urban Wellbeing, Hou­sing and Local Government Minister Datuk Abdul Rahman Dahlan an­­­nounced that he wants to allow developers to choose between sell-then-build and build-then-sell. He is effectively doing a U-turn because the previous minister wanted to make build-then-sell compulsory.

Of course, developers love the sell-then-build scheme because they get the cash in advance. Risks are transferred to buyers.

Fifth, despite the U-turn policy, the Housing Ministry is actually quite effective in dealing with consumer complaints. I have had a very good experience in dealing with the National Housing Department and the Tribunal for Homebuyer’s Claims (TTPR). The processes to submit a claim through the TTPR are simple enough to understand even for a layperson like me. The TTPR is also very transparent.

My case hearing was conducted in public and if you go to the tribunal’s website, you can find information about the claim that I filed. This transparency allows everyone to learn from the experience of others.

Let me end by saying that buying a house is probably the most expensive purchase you will ever make. You really should learn your rights.

If you find yourself dealing with a situation like I am in now, then you must not let the developer off the hook. Get advice from the brilliant team at the National House Buyers’ Association. Take the developer to the TTPR. And report them to the National Housing Department.

You should not despair because there are mechanisms to help protect you, including those instituted by the Government, as long as you are willing to take the initiative.

Think Liberally by Wan Saiful Wan Jan

Wan Saiful Wan Jan is chief executive of the Institute for Democracy and Economic Affairs (www.ideas.org.my). The views expressed here are entirely the writer’s own.

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Financial planning is all about investing

LOTS of people shy away from financial planning because they think they may be pressured into investing. And when you think investing, what comes to mind are horror stories of people who lost their life savings during the Asian financial crisis and Dot Com Bubble.

We hear tales of greed and chasing the hottest sexiest investment themes that has led them down the path of poverty and for some great debt due to leverage.

Admittedly, in the wealth management business, investments do form a large part of conversations that happen between ourselves and our clients.

For the most part, people speak to financial planners or wealth managers about how to make their money grow faster so they can meet their goals.

How much return can I get? What can I get if I invest in equities? How about properties? How can I start investing in currencies?

When people engage in a conversation about investments, inevitably, we get seduced by the quest to find the highest yielding asset. We steer into instruments we are not familiar with, drawn by the allure of high headline returns.

Think dotcoms. Think gold investments. Think land investments. Think bitcoin. Not necessarily bad investments but the basic concept of risk and diversification fall by the wayside as we chase returns.

But, step back for a moment.

Are you asking the right question? Is financial planning only about finding the next best investment?

While investing will likely play a key role in your financial plan, there are a lot more questions that need to be answered before you can choose the right investment, or if you even need to invest aggressively.

First question, how much do you need? Second question, when will you need it? Third question, how much have you set aside or are prepared to set aside? Last question, what returns are you going to get?

So say, I would like to buy a property in five years, of which I plan to make a downpayment of RM50,000. I have currently set aside RM10,000. I can currently save RM500 monthly.

Let’s assume I have no experience investing and decide to place it in fixed deposit at 3% per annum. Doing my maths, after five years, with interest compounded, all this adds up to only RM43,000. You are RM7,000 short.

In such an example, most people approach an adviser to find out what could yield them higher returns. In the above example, any misadventures in your investments could possibly set you back in your acquisition of your next property.

What if this was your children’s education? You may not want to risk your child entering university two years late. These are things your adviser needs to know as there other alternatives.

Financial management is very much about balancing between these four requirements. While getting higher returns so you can meet your goal is one way, it’s not the only way! You have other options. So, let’s go back to the four questions.

Firstly, you could buy a cheaper property with RM43,000. Alternatively, you could wait another year to purchase that property, giving you more time to save up. Or, you could increase your monthly savings to RM600 at 3% per annum. Lastly, consider investing in something that yields you 7% per annum. So, really, out of four options, only one is about investing.

For the most part, investing plays quite an essential role in most people’s portfolio. However, before you even have that discussion, think about the goals you want to achieve and whether investing is required and what kind of investment performance is needed.

By Ong Shi Jie

For the most part, investing plays quite an essential role in most people’s portfolio. However, before you even have that discussion, think about the goals you want to achieve and whether investing is required and what kind of investment performance is needed, says Ong.

Ong Shi Jie (CJ) is head of wealth management, OCBC Bank (M) Bhd.

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It's not news if it's good, the Western news

The success story of regional integration in Latin America today is seldom heard elsewhere in the world, even as people there experience it daily.

LATIN America has been experiencing a progressive, historic but silent revolution for 10 years now. However, few people in the rest of the world seem aware of it.

The silence is not because these countries had sought to avoid world attention. Rather, the international media dominated by Western news agencies seem to have other priorities.

Often enough significant events and key issues are neglected, bypassed by the saucy, the sensational and the scandalous – all that glitters is not gold, much that matters may never be told.

Without exception, Western news agencies have doggedly promoted the so-called Arab Spring to the point of tedium.

The standard bogeymen of Western storytelling – Saddam Hussein, Muammar Gaddafi, Bashar Assad – are going or gone, so jubilation in Occidental newsrooms may be expected. But there should be limits and other (news) priorities too.

Elsewhere, countries that succeed outside Western norms, dictates and development models may seem unimportant or “politically incorrect”. So they are routinely ignored or underrated.

Worse, the changes said to be wrought by “Arab Spring” uprisings are said to be positive when the exact opposite is happening.

In virtually all these countries, living conditions have deteriorated rather than improved.

But the nine countries of Latin America and the Caribbean that came together in 2004 as the Bolivarian Alliance for the Peoples of Our America (Alba) have been making great strides in every critical area of national development.

Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua, Saint Lucia, Saint Vincent and the Grenadines, and Venezuela have raised standards of living for their people in social, economic and political terms.

Standards in housing, health care, education and employment have risen. These countries have also scored a high 0.721 in the UN Human Development Index, which measures national achievements beyond economic growth and material development.

On Dec 14, 2004, Venezuela and Cuba signed the joint declaration for the establishment of Alba. The alliance is based on humanist principles that place the citizen rather than the state or the corporation at the centre of national policymaking.

This people-centred alliance soon attracted the interest of other countries. Next to join were Bolivia, then Nicaragua, and Dominica, with Ecuador, Antigua and Barbuda as well as St Vincent and the Grenadines joining together – followed by St Lucia.

Grenada and St Kitts and Nevis will be the next members. Other countries attending Alba summits as Participants are Guatemala, Haiti, Honduras, Paraguay, St Kitts and Nevis, and Uruguay.

With a proud record of a decade’s achievements under its belt, Alba marked the passage of its first decade at a forum in Kuala Lumpur on Thursday.

Ambassador Lourdes Puma Puma of Ecuador explained Alba’s background and objectives, including the use of the Sucre (Unified System for Regional Compensation) as a virtual currency in trade among member nations.

There is also a Bank of Alba with regional integration as its core purpose. The bank encourages and offers financial support for projects that promote the social development of all the peoples of the continent regardless of race, religion, politics or other background.

The areas that Alba covers in promoting regional integration are comprehensive and ambitious. There are medical schools and a health sciences university with scholarships, and a pharmaceutical company and a drugs regulatory centre with free access to medication.

There are plans for a new financial architecture and an emphasis on science and technology, without neglecting the arts.

There are also awards and scholarships for literature, culture, research and cinematography.

Alba is also working with the People’s Trade Agreement that lobbies for the social, cultural and environmental rights of the region’s peoples. It also works with Petrocaribe, an alliance of nations over oil purchases, as well as Mercosur, a regional customs union for advancing free trade and the movement of goods, people and currency.

The guest speaker at the Kuala Lumpur forum was Dr Chandra Muzaffar, president of the Interna­tional Movement for a Just World.

Dr Chandra identified the significant distinction between Alba and other regional organisations in the way it places priority on the human being, the individual person, in public policymaking.

This humanist aspect of a caring regional society that Alba seeks to build is widely cherished by the national leaders of its member countries. And despite a priority on economic development, Alba is also conscious of environmental needs and emphasises sustainable development.

In pursuing technology, Alba also seeks independence of telecommunications content in programming. Telecoms and broadcasting community services will also be provided to rural and other marginal areas.

Despite their achievements, Alba countries are still developing nations with much to do to achieve full development status. In the meantime basic needs have not been forgotten, with a food fund that has cut malnourishment to under 5% in four Alba countries and eliminated illiteracy in five countries.

More broadly, Alba seeks a more multipolar world that avoids war as a matter of policy. It much prefers human development that addresses the real needs of real people, particularly the most disadvantaged members of society.

Alba is named after the great 18th-19th century Venezuelan leader and liberator Simon Bolivar, hailed as a Latin American independence hero and a regional beacon of progress and development.

Bolivar is the only person in history to have two countries named after him: Bolivia, and the Bolivarian Republic of Venezuela.

Bolivar’s goals for Venezuela and its neighbouring countries labouring under the Spanish colonial yoke may be summed up in four basic priorities: a popular and participatory democracy for the people, economic independence for real development, fairer wealth distribution and elimination of corruption.

In the Latin America of his time, Bolivar led territories that included Bolivia, Colombia (then including Panama), Ecuador, Peru and Venezuela. As a political and military leader he fought many private and public battles against slavery and for the liberation of his people.

Bolivar died in 1830 at the age of 47. He had paved the way for democracy in many countries in Latin America, but much else remains to be done.

After an era of cruel dictatorships, Latin America is again ready to embrace its history of decency and human achievement. But obstacles remain in the way of Alba countries, particularly when they seek their own way to development.

They prefer a more direct way that impacts positively on the people, particularly the most vulnerable in society such as the poor and the weak. Thus they avoid the customary assistance from powerful transnational institutions that comes with strings, cables and levers attached.

And yet when the UN established the Bretton Woods aid organisations the World Bank and the IMF, they were also supposed to help the poorest without encumbering them. But a problem with institutions is that their practices become institutionalised and worse.

Alba has been established with much goodwill and its achievements have been impressive.

Alba countries deserve support and admiration for their record so far, and encouragement on their promise.

Alba emerged from Venezuela’s rejection of the proposed Free Trade Area for the Americas, which would heighten inequality by enhancing the power of transnational corporations at the expense of the poor.

Neither the World Bank nor the IMF may want to call Alba’s achievements a “miracle”, but they are miraculous nonetheless.

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Behind The Headlines By Bunn Narara

Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia. The views expressed are entirely the writer’s own.

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