Property Hunter Magazine Property Hunter Magazine Issue 52 - March 2014 | Page 48

/// Contributor Chris Tan Lawyer Specialising in Real Estate Chris Tan is the founder and now Managing Partner of Chur Associates, a boutique legal practice that thrives in delivering business friendly solutions for its clients and having a niche positioning of ‘Everything Real Estate’ serving the entire value chain from the upstream to the downstream. Chur Associates is a boutique legal firm founded in 2004, specialising in designing legal solutions catered to our clients’ needs. Chur Associates’s brand promise is “We Deliver!” To that end, they offer clientsthe necessary means and methods to ensure their requirements are met. Trending Up Legally in View of The Property Boom in Malaysia (Part 1) T hese days, it is easy to detect a smile on those who have invested in real estate for the past 5 to 10 years. The low investment that they have invested has brought these investors handsome returns and such sweet after taste has led them to ask for more. It becomes even obvious when real estate investment seems to be a hot topic for social gatherings among friends and family. Beyond Kuala Lumpur, the list of property hotspots in Malaysia has expanded to cover the Greater Kuala Lumpur (thanks to the MRT and the ongoing highways connections as well as the spillover of the city center), Penang (on both sides of the sea connected by the old and new bridges and possibly an undersea tunnel to the North), Iskandar Malaysia (the obvious influx of foreign interests with theme parks and filming industry as well as the link to the Singapore), Kota Kinabalu (for its well established international flight connection network and its rich tourism resources) to even places like Melaka and Greater Johor given the potential stops in the route of the High Speed Rail from Kuala Lumpur to Singapore. From the above, it’s safe to say that your money is quite safe with real estate and more money will be flowing into this sector as the Country’s last push towards a developed status in 2020, notwithstanding all the cooling off measures introduced and to be introduced in this common journey. Given such destiny, we observe some new dealing patterns trending up in the process of buying and selling of real estate and along with it some much needed clarifications. You can get in touch with him at Facebook: Chur Associates Email: [email protected] Trend No. 1: Trading of Real Estate as a Commodity while leveraging on the Bank’s financing Not every investor takes the effort to understand what real estate is all about. The simple strategy is to pay a low down payment with the help of discount and rebate thrown in by the developer as well as the ready leveraging and then looking for a buyer to sell as soon as the property is ready. The details are not relevant to them for as long as there is money to be made. Wastage normally happened when there is abundance. However, as the road forward is getting more challenging, keeping your bottom line intact is important. Most of the time, this happened in the secondary sale in the market when there are banks involved on both ends. The complexity of the property redemption process from the bank seems to be beyond the logic comprehension of the transacting parties. Payment of the balance purchase price to redeem the property from the Seller’s bank is as good as payment to the Seller. Therefore, the Seller cannot claim for any late payment interests on the redemption sum paid in the event that the transaction cannot complete in time. Similarly, payment to the Seller’s solicitors of the differential sum between the balance purchase price and the loan amount procured by the Buyer is as good as payment to the Seller. Therefore, Seller has no claim of late payment interests in the said differential sum is it has already been placed with the Seller’s solicitors. While the author makes reasonable efforts to present information which he believes to be reliable, the author makes no representation that the information or opinions contained in this article is accurate and complete. Readers are advised to seek specific professional advice before acting on the views. 48 www.PropertyHunter.com.my Based on the above together with the unique practices of the respective banks, the Seller has always been left wondering about payment while it could actually been paid but pending release due to some technicalities yet to be complied with.