Relief for developers leaves buyers out in the cold

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Buyers of units such as The Pano, whose completion has been delayed, are stuck with loans they have to continue paying. (The Pano Facebook pic)

PETALING JAYA: When Ida Ong signed the sale and purchase agreement on a new home in October 2017, there was no way she could have predicted the turmoil that the world would be thrust into just two years later.

Although it was scheduled to be delivered in April this year, The Pano serviced apartment project developed by OCR Property has been delayed due to the limitations imposed by movement restrictions, with Ida paying for a loan for a place that she has yet to move into.

This is compounded by the fact that under the terms of her loan, she is now required to start repaying the loan rather than just servicing the interest while awaiting the project’s delivery, with her repayments going from about RM700 a month to RM2,300.

“I’m relatively lucky since I have a job,” said Ida, who works in the property industry herself. “What about others whose property has been delayed and who might not be as fortunate?”

Under the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020, companies and providers were able to apply for extensions in delivering goods and services if their operations had been affected by the pandemic.

In a letter to Ida, the developers stated that this had been the case for her apartment unit, with completion now expected in the first quarter of 2022, citing approval from the housing and local government ministry for the extension.

“If the government will give developers an extension because of Covid-19, which is fair, buyers should get a loan moratorium, too,” Ida said.

With the extension granted, she is also not allowed to claim for Liquidated Ascertained Damages, a typical form of recourse when the delivery of a property is delayed past the planned date.

According to Chang Kim Loong, honorary secretary-general of the National House Buyers Association, this mismatch in policy has seen the organisation receiving a number of similar complaints and queries.

“These problems have been cropping up this year in particular, involving situations where people have signed purchase agreements and expect delivery, but have yet to take possession of their homes and have few options.”

He said there needs to be greater balance in protecting the buyers as well as property developers.

“The government has not taken into consideration the buyers who still have to pay their regular instalments. It must not protect one party and neglect the other,” he said.