COVER STORY /// 9
The Law prohibits collection of ‘ Booking Fees ’
Contrary to such popular belief , this is prohibited by the Housing Development ( Control and Licensing ) Regulations 1989 (‘ HDR ’). The HDR provides inter-alia :
HDRegulation 11 ( 2 ). “ No person including parties acting as stakeholders shall collect any payment by whatever name called except as prescribed by the contract of sale ” The statutory form of sale and purchase agreement provides that the first 10 % of the purchase price is only payable immediately upon the signing of Sale & Purchase Agreement ( SPA ). The scope of prohibition is wide enough to include estate agents , lawyers and any third parties purportedly acting as stakeholders for the housing developer in respect of collection of the booking fees .
This prohibition , first introduced way back in the early 80 ’ s , is actually a good form of protection designed to prevent an errant developer from treating a booking pro-forma as a binding contract to gain a contractual right to forfeit the booking fee already paid by a purchaser who failed to sign a sale and purchase agreement , when so requested . Stories of fellow purchasers crying foul when they are denied a refund of booking fee , are abound .
There have been wanton cases of such abuse by unscrupulous housing developers . In too many cases , promises by sale representatives that the booking fee is fully refundable if the buyers could not secure a bank loan are not honoured . Vulnerable buyers are left with no options but to forgo the booking fee simply because they feel that the cost and legal quagmire to pursue the matter does not commensurate with the booking fee . It simply is too bitter and cumbersome for those in such acrimonious situations .
PROPERTY360DIGEST E-MAGAZINE ISSUE # 6