Report developer to police, house buyer is told
PETALING JAYA: A consumer group has urged a Kedah woman who was cheated out of her home to go after the developer and the company’s board of directors.
National House Buyers Association secretary-general Chang Kim Loong said Jayainthy Subramaniam should lodge a police report against the developer as there appeared to be elements of cheating and criminal breach of trust in her allegations against the developer.
Jayainthy told FMT that her house in Lunas, Kedah, had been auctioned by a bank because progress payments she made to the developer, Lunas Garden Sdn Bhd, allegedly never reached the bank.
When she sought to claim the property, she said the bank asked her to pay about RM100,000 in redemption sum, overdue interest and other charges, despite showing evidence in the form of receipts of all payments made to the developer.
Chang said the house buyers’ association usually advised house buyers to make the purchase through a small loan, even if they had sufficient cash.
“You don’t have to take a 100% loan, but take an end-financing loan so that the bank will do all the due diligence and so you can deal with the bank which operates in a highly regulated environment.”
Chang said in Jayainthy’s case, the bank which provided the bridging finance might not have been aware that she had been making progress payments.
He said cash buyers placed themselves at high risk if they do not know how to safeguard their own interest.
However, the Consumers’ Association of Penang said Jayainthy’s problems could have been avoided had the bank carried out their due diligence practices.
CAP’s complaints chief Ravinder Singh said banks must ask housing developers taking loans with them if there are any cash buyers in the midst.
“The bank, upon finding out about cash buyers, must inform them that a redemption sum must be paid for the house to be transferred to their name,” he said.
“In Jayainthy’s case it appears the bank did not take the initiative to do so. And as a result of the bank’s client gone rogue, an innocent cash purchaser suffers. She is not the one who cheated the bank, but the developer did,” he said.
Ravinder said that although the bank was not privy to the property purchase agreement, the buyer was similarly not privy to the developer’s bridging loan arrangement. “Hence, due diligence is important,” he said. - FMT
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