/// Banking and Investment News
Can the Developer Confiscate Your Booking Fee? Buyers Beware !
just some of terms used by some
devious developers in their vain
attempts to circumvent or contract
out of the Housing Regulations and
to confuse, mislead and convince
nave house buyers especially the
first-timers.
Collection of any payment by a
housing developer before the
signing of the SPA is an offence.
This is very clear under the Housing
Regulations and it does not matter
what the developer calls it.
I found my dream house. The
developer’s office said the project
was selling like hot cakes. Sales were
on a first come first serve basis’ and
I must pay a deposit otherwise she
would have to give it to someone
else. Or was it a booking fee she
called it?
I begged her to give me one week.
Three days, she said. How very
sweet and understanding of her.
Bank loan? No problem… 85% loan
margin? No problem, she assured
me. If I could not get a housing loan
I could always cancel and get my
money back. I left the developer’s
office feeling on top of the world.
I had secured my dream house
by paying the deposit. My dream
turned into a nightmare when I
could not get a bank loan. I had no
choice but to forgo the house.
As if letting go of my dream was not
bad enough, the developer now
refuses to give me back my deposit.
The lady said her hands were tight
because it’s a management decision.
It was not stated in the option letter’
or booking form’ that my purchase
was subject to the loan approval. On
reading the terms and conditions
in the option letter/booking form,
I now realised that all terms were
inclined in favour of the developer.
What do I do? I just want my money
back. I don’t mind if they keep a
small sum for cost of paper work
and for administrative purposes.
The above scenario is not at all
uncommon.
Many house buyers are unaware of
lending guidelines requiring loans to
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be tagged to net income as opposed
to gross income. Many find that they
are unable to obtain the financing
they want and have to withdraw
from an intended purchase before
the sale and purchase agreement
is even signed. The developer then
refuses to refund the deposit or
booking fee or whatever other
payment which may have already
been paid.
The unfortunate part about this
whole thing is that house buyers
do not have the luxury of a learning
curve in which they can acquire
the necessary skills to avoid getting
themselves into trouble. Very often
by the time they realised that they
have made a mistake, it is already
too late and the result can be
traumatic and financially crippling.
This very noble and seemingly
simple undertaking of buying a
house, in a lot of cases, have gone
terribly wrong.
Can developers collect booking fee
or deposit..
The sale and purchase agreement
(Schedule G, H, I or J) as prescribed
by the Housing Development
(Control and Licensing) Regulations,
1989 (the Housing Regulations)
provides very clearly how the
purchase price is to be paid. The
first 10% is payable immediately
upon the signing of the sale and
purchase agreement (SPA), not
before.
No collection of any payment is
allowed before the SPA is signed.
Deposit, booking fee, advance
payment, administration charges are
are untruthful will not hesitate to
mislead, conveniently telling “white
lies” and make empty promises to
make a quick buck. Some are so well
trained in the art of selling they can
probably sell sand to the man in the
desert.
Ever wondered why the sales office
told you there are only five units left
but three months later there are
more than 10 units still avai