KUALA LUMPUR: Homebuyers are advised to educate themselves about their rights and the protections available to them to avoid losses.
This advice came after a stop-work order was issued to the J Satine condominium project in Wangsa Maju here after videos and pictures showing cracks in the building went viral, raising concerns about structural integrity.
Real estate expert Professor Dr Rohayu Abdul Majid from Universiti Teknologi Mara commended Kuala Lumpur City Hall for prioritising safety by halting the project.
She said homebuyers had legal and financial protections, depending on the contract they signed and the regional laws.
She encouraged homebuyers to consult a real estate lawyer to gain a clearer understanding of protections for their contracts.
"Options may include escrow accounts, secured payments, bank guarantees, consumer protection laws and even government intervention or civil litigation.
"Buyers should review their Sale and Purchase Agreement (SPA) for terms regarding construction timelines, penalties for delays and the developer's obligations.
"Understanding termination rights is also essential, as these may allow for agreement termination if delays are prolonged," she told the New Straits Times.
Elaborating on the escrow accounts, Rohayu said it acted as a layer of financial security for homebuyers.
"In many countries, developers are required to use escrow accounts where buyer payments are stored and only used for agreed construction purposes. If the project halts, buyers can recover their funds.
"Performance bonds or bank guarantees also offer financial safeguards, allowing buyers to seek compensation if the project isn't completed as promised."
She said professional advice was crucial, urging homebuyers to engage a lawyer specialising in real estate to interpret their SPA and discuss potential legal actions, including claiming Liquidated Ascertained Damages or seeking contract termination.
Rohayu said homebuyers could request updates from the developer and should maintain records of correspondence related to the project.
"Keeping records will be useful for future reference, especially if legal action becomes necessary."
Forming or joining a buyers' group could enhance bargaining power, she said.
"Such groups allow buyers to share updates, negotiate collectively with the developer and explore the best strategies for addressing concerns."
She said City Hall played an important role in ensuring projects were carried out on schedule.
"These regulations force developers to meet certain standards and impose penalties or fines if the project halts without valid reasons.
"Besides that, regular audits and inspections of construction projects can ensure smooth development progress.
"These financial audits and evaluations identify any potential issues or delays early on, enabling corrective measures to be taken."