1. VACANT POSSESSION
Delivery of vacant possession is when the property is ready to be handed to you. This usually happens between 24 – 36 months from when you made the initial down payment for the property and signed the sales and purchase agreement. For multi-storey (strata titled) development, developers are obligated to handover VP, and complete all common facilities within 36 months from the SPA date. By this time, construction work usually has ended and the building is complete and ready to be lived in.
In the event where developer fails to adhere to the timeline, you will be compensated for 10% of purchase price per annum.
When the property is about 70 per cent complete, you will receive a letter from the developer to set a date for when you can take delivery of vacant possession. When the property is finally completed, you will need to turn up at their sales office to formally collect the property. On the same day you collect the property, you will also receive a copy of the certificate of completion and compliance (CCC).
2. CERTIFICATE OF COMPLETION AND COMPLIANCE
Formerly known as the Certificate of Fitness of Occupation (CFO), the CCC is a document released by the local authority council that declares a particular property is completed and safe to be occupied. Also known as Borang F, Perakuan Siap dan Pematuhan, this document is endorsed by a registered member of the Malaysian Board of Architects.
Legally speaking, the CCC is a requirement stated in the sales and purchase agreement. So, when you take possession of the property, make sure that your house has already been granted a CCC.
3. HANDOVER THE KEYS
When you meet the developer to take delivery of vacant possession, you will need to sign several documents to mark your acceptance of keys to your new property. Once you sign the documents and write down the date, the defect liability period for your property begins.
Part of this set of documents will include a simple list of the lighting fixtures, appliances, electrical sockets and other built-ins.
4. DEFECT LIABILITY PERIOD
After obtaining VP, you should do a thorough on-site inspection as soon as possible, as the house is empty and will be easier to make reparations. Check the ceiling, doors, windows, piping, tiles, installations if they conform to the descriptions in your SPA. You could visit when it is raining, so that it’s easy to see any leakages.
The defect liability period is like the “warranty” period, it covers any defective material, poor workmanship or irregularities from the SPA on the developer’s own cost. It lasts around 18 – 24 months. Usually, the developer will provide a defect complaint form that lists the common areas in the house.
Don’t be afraid to point out every single little flaw (like loose electrical sockets, misaligned flooring, cracked tiles), because once the defect liability period has passed, you will bear the cost for any problems discovered afterwards.
If the defects are not dealt with after 30 days, you may send a notice of complaint with estimated costs, and wait another 14 days.
If there still is no response, you may proceed to repair the defects and charge the cost through the stakeholder lawyer, who holds 5% of purchase price in Housing Development Account.
5. MANAGEMENT OFFICE
The shared common areas and well-being of the condominium estate or gated community will be managed by a management office selected by the developer and before the residential committee is set up.
Contact them for assistance on the monthly maintenance fees, sinking fund collection as well as the rules and regulation of the property. Generally, upon signing the property handover form for a condominium, an invoice for the first three months of property maintenance will be included.
After delivery of VP, you will need to start paying maintenance fees and sinking funds. Maintenance fees include upkeep of common properties and amenities for the occupiers, like air conditioning, clubhouse, landscaping, swimming pool, guard house, security guards, and common corridors.
Sinking fund is collected for big-ticket expenditures to upgrade or renew the common properties for your building, such as:
• Repainting the building
• Purchase of movable asset for use as common properties
• Renewal or replacement of fixtures and fittings
• Other expenditure deemed necessary by the management
You will need to pay taxes on your property as well:
• Annual Quit Rent
• Twice-yearly assessment tax imposed by the state government
• If you bought your new property for investment purposes, do take note that a 26% tax will be levied on the rental income
• 5% Real Property Gains Tax imposed if you sell off your property within 5 years from the date of SPA
6. APPLY FOR UTILITIES
Some developers plan ahead and ask you to apply for various utilities even while the property is being built. Others may only ask you to do it after.
In any case, it is best to get these done as soon as possible. Typical utilities applications include:
• Tenaga Nasional Bhd’s new account application
• Syabas water supply application (Kuala Lumpur, Putrajaya and Selangor)
• Gas Malaysia’s natural gas supply application
• Telekom Malaysia UniFi (or other internet provider) new account application
7. LOAN SERVICING
If you received a couple of notices telling you about progressive payment in the period between SPA and VP, it is a normal industrial practice for developers to request for the release of payments from your mortgagee bank once they have reached certain stages of construction. The progressive payments notice is only to keep you notified of updates.
8. SPACE PLANNING
Now that major issues with the developer and the management are sorted out, you can start working on the interior of your new house. Renovation is best carried out when the house is still empty. Remember to leave a deposit cheque with the management office before you carry out any deliveries or renovation work.
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