Not heard of this ruling that money is needed to be deposited. What is normally done is developer apply for project financing once the bookings reach a certain % , appprox. 2/3. Malaysia is a sell then build market. So the money come in through progress billings and that is used to fianace the project. What needs to be wary is money come in through progress payments goes elsewhere and not into the project itself. After multiple abuses, there's no cash flow, no payments for contractors for the ongoing projects resulting in abandoned developments.
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Puteri Cove by RF
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Not heard of this ruling that money is needed to be deposited. What is normally done is developer apply for project financing once the bookings reach a certain % , appprox. 2/3. Malaysia is a sell then build market. So the money come in through progress billings and that is used to fianace the project. What needs to be wary is money come in through progress payments goes elsewhere and not into the project itself. After multiple abuses, there's no cash flow, no payments for contractors for the ongoing projects resulting in abandoned developments.
because funniman help me a lot when i asked for information about KL property.
are you sure i didn't help you? go look back my posts.
now you calling me hypocrite. you .. best.
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actually, my opinon of rnf is neutral. they should be ok since they have an reputation to maintain. what you bought in is a bit high risk due to the high pricing and it's banking on the mrt (as in, mrt location not confirmed.). but as long as you like it, hey who cares what others say. if the mrt is as everyone speculate, rnf will huat.
Bro, no need to quarrel with boys.
I am no big time investor, at least I thought I was then. But when you go international, I realise I am no bigger than a speck in the real world of property investment. Humbly, I am afterall a very small part time investor.
Here..
http://www.hba.org.my/HBA/Speeches/hda_protect.htm
The exact term is "Malaysia Housing Developer's Act"
Quote from link:
9 OPEN / MAINTAIN HOUSING DEVELOPMENT ACCOUNT
9.1 Section 7A of the Act (a new provision inserted by Act 703 with effect from December 1, 1988) requires the developer to open and maintain a Housing Development Account. Under this provision, unless the developer is implementing a “Build & Sell System”, he is required to open and maintain a Housing Development Account with a bank or a financing company for each housing development undertaken by him. The deadline for opening the account was August 31, 1991.
9.2 If a housing project is developed in several phases, the developer is required to open and keep an account for each phase of the project. The developer is required to put into the account all payments received by him from the sale of the housing accommodation in the project. The developer is not allowed to withdraw from the account except as authorized by the Housing Developers (Housing Development Account) Regulations 1991.
9.3 Section 7A was enacted specially to solve the problems of the 80s - developers who siphoned off funds from projects (currently in progress) to other “ventures” including for personal use and gratification. The Ministry stated that the Regulations had been largely successful in putting a stop to this unhealthy practice.
http://www.hba.org.my/HBA/Speeches/hda_protect.htm
The exact term is "Malaysia Housing Developer's Act"
Quote from link:
9 OPEN / MAINTAIN HOUSING DEVELOPMENT ACCOUNT
9.1 Section 7A of the Act (a new provision inserted by Act 703 with effect from December 1, 1988) requires the developer to open and maintain a Housing Development Account. Under this provision, unless the developer is implementing a “Build & Sell System”, he is required to open and maintain a Housing Development Account with a bank or a financing company for each housing development undertaken by him. The deadline for opening the account was August 31, 1991.
9.2 If a housing project is developed in several phases, the developer is required to open and keep an account for each phase of the project. The developer is required to put into the account all payments received by him from the sale of the housing accommodation in the project. The developer is not allowed to withdraw from the account except as authorized by the Housing Developers (Housing Development Account) Regulations 1991.
9.3 Section 7A was enacted specially to solve the problems of the 80s - developers who siphoned off funds from projects (currently in progress) to other “ventures” including for personal use and gratification. The Ministry stated that the Regulations had been largely successful in putting a stop to this unhealthy practice.
Bro Funniman should share with us, your portfolio so that we can learn mah....hehe.....problem with international is that the taxes for non-residents are high, and hence, leverage becomes crucial in reducing the taxes.
My only contribution is:
Buy only what you know, do not buy what just cos someone say is good
Buy only what you can afford, do not buy when you have to rent it out to pay for your mortgage
Buy small units, luxury units can come later.
Lastly buy WSIWYG, do not buy cos sales girls are sexy.
That's my 2 sen worth.
My only contribution is:
Buy only what you know, do not buy what just cos someone say is good
Buy only what you can afford, do not buy when you have to rent it out to pay for your mortgage
Buy small units, luxury units can come later.
Lastly buy WSIWYG, do not buy cos sales girls are sexy.
That's my 2 sen worth.
I agree with most of what you said, except for "do not buy when you have to rent it out to pay for your mortgage". Thought that's the underlying reason for investing in properties? Getting someone to pay for your mortgage.
I would also like to add my thoughts: If you are a conservative investor, buy in areas with gd local support, not in areas where upper middle-class locals are generally priced out. It ensures ease of sale & rent, should you need to do so. On the flip side, returns may be correspondingly lesser, but more resilient.
The key word is "have to rent out"
Haha I see I see but I feel it's the bank's job to determine that (assuming most owners continue to be gainfully employed).
Lower risks, lower returns. Higher risk, higher returns. For me, as property is a long-term investment, I gravitate towards 'lower risks, lower returns' and the properties I have bought reflect that mind set.
Eat moderately, health check regularly and never be too greedy. I am also a layman.
The above kong simi?
Sure la...individual projects must have individual accounts. If not, how to do project accounting?
But is is only for receivables...no mention of deposits for the projects.
It doesn't need rocket scientists to come up with progress payments to siphon out money especially with contractors.
Ya..seems like it is upstream A tai chi. Mai chap siao. -just a layman. :p
Funny leh, if this so-called Housing Development Account was supposed to be implemented by 31 August 1991, but between 1991 and 2012, I've heard of several cases of developers (in Johor at least) abandoning their projects and absconding with their clients' money with very little or no recourse of recovering the money already paid by their purchasers. How is it so?
Aiyo, just do a GOOGLE Search and you'll find out lah. Why must still spoon feed?
Source: http://www.propertyguru.com.my/property-news/2012/3/3176/abandoned-projects-in-johor-due-to-greedy-develope
Even when I purchased my subsale house in JB in 2009, my JB lawyer even advised me to purchase those ready built ones if I were to buy a new house instead.
But to be fair, even Singapore also has "black-sheep" developers. The slight advantage is that the law in Singapore gives it a better chance for swindled purchasers to seek for an eventual recourse, although not to the full satisfaction.
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