In the early stages of its development, 95% of IJM Land Bhd’s Seremban 2 purchasers were from Seremban or neighbouring areas. Over the years however, as infrastructure development and amenities improved, many people from the Klang Valley had chosen to settle down here.
“The buyers’ profile has changed over the years. Now around 20% of buyers are from the Klang Valley who are working in Bangi, Cyberjaya, Kuala Lumpur and even Petaling Jaya,” IJM Land Bhd central region senior general manager Datuk Hoo Kim See told TheEdgeProperty.com.
“With the improved infrastructure, amenities and road network, Seremban 2 has become a place for work, play and stay and is especially suitable for families,” said Hoo, who himself moved from KL to Seremban 2 in 2000.
The 22-year-old Seremban 2 initially spanned 2,300 acres and was a joint venture between IJM Land and the Negeri Sembilan state government. It serves as an extension to the congested Seremban town.
The satellite town is currently 90% completed with 13,000 homes and over 1,000 commercial properties.
“But with an additional 1,500 acres purchased in 2000 for the development of Seremban 2 Heights, it has now expanded into a 3,800-acre township with a mix of offerings,” Hoo said.
Upcoming launches
The developer will be offering more mid-range landed homes and a project known as Safira Apartment in Seremban 2 this year.
It has launched the final phase of Rimbun Vista (Rimbun Vista 2), two months ago and has seen 75% of the 187 double-storey superlink homes of 22ft by 70ft and 22ft by 80ft, taken up.
This low density guarded development is located near the North-South highway with easy access to the Ainsdale and Seremban tolls. It features a four-acre central park with basketball court and 1.5km jogging and cycling path.
“An upcoming project Rimbun Harmoni is slated to be launched in August. The site is situated on elevated ground offering a good view of the hill park,” he said.
Rimbun Harmoni comprises 228 units of double-storey terraced homes measuring 20ft by 70ft and 22ft by 70ft, with selling prices from RM528,000 onwards.
Another double-storey terraced housing project offering over 105 homes measuring 22ft by 65ft will be launched this year, but the names and unit prices have yet to be determined.
IJM Land also plans to launch Safira Apartment by year end offering 242 apartment units with a built-up size of 820 sq ft. The indicative selling price starts from RM250,000.
Safira Apartment is located close to the Seremban district administration centre, the State Court Complex, a health clinic and the Seremban district police headquarters as well as the Fire and Rescue Services headquarters.
Hoo said the affordable pricing and its location where various government agencies are, have attracted the attention of buyers.
Seremban 2 comprises 18 residential communities, seven schools, a 15-acre city lake park, a sports complex and commercial business parks.
Accessibility in and within Seremban 2 is via a six-lane dual carriageway that eases traffic flow even during peak hours.
There is also a 30-acre adventure hill park where residents could enjoy panoramic views of Seremban 2.
Nearby amenities include malls like Mydin, Aeon shopping centre and NSK Hypermarket. Food and beverage choices, government and private hospitals are within 15 to 30 minutes’ drive.
“All the infrastructure developments (parks, schools and roads) were planned from day one in our master plan and this is what makes Seremban 2 a success,” he said.
Property transactions in Seremban 2 were slow in the first five years, but once the early phases were delivered and the infrastructure was completed, sales increased significantly.
The population in the self-contained township has also increased to 62,000 people now. Community activities are regularly held to bring the residents together. For instance, the IJM Run which will be held in August 13 has attracted 8,000 participants this year within two months’ of registration compared to 1,000 participants five years ago.
Capital appreciation
Seremban 2 purchasers have seen the value of their properties double or triple over the years. According to Hoo, the double-storey semi-dee units known as Acacia that were sold at RM350,000 in 2008 are now going for RM1.1 million.
Meanwhile, Kalista Residence condominium units of 926 sq ft have seen their price climb 28% to RM320,000 from RM250,800 during launch in 2013.
The higher-end projects including the two-storey Sri Carcosa bungalows are now asking for over RM2 million. The cheapest selling price back in 2006 was around RM600,000.
In terms of rental, Hoo said there is strong demand from students from the universities and colleges in Nilai and people working in the neighbouring industrial areas. “The rental yields are between 4% and 6%, depending on property type,” he added. For example, a double-storey Saujana Duta semi-dee unit is fetching a monthly rental of RM4,500, generating 4% yield.
The three-storey shop offices in Biz Avenue could be rented out for RM8,000 and above, generating 10% to 14% yield while rents for the double-storey shop offices at Uptown Avenue are around RM4,000 to RM5,000, generating 8% to 10% rental yield.
“We expect prices to rise further in the future. However, it still depends on market sentiment, inflation and economic growth,” he opines.
Hoo also believes the KL-Singapore High Speed Rail which will have a transit station in Seremban will boost the growth of the township further.
Monday, July 17, 2017
Saturday, July 8, 2017
Common problems in a sub sale transaction
A typical transaction for a sub-sale and purchase agreement (SPA) of an immovable property (whether a landed property or strata titled property) in the secondary market is normally divided into three stages:
The pre-SPA stage.
During the pre-SPA stage, the investigations carried out at this stage are basically on the property and the vendor.
When a vendor sells his property, it is reasonable to believe that he wants to receive the proceeds of sale in the shortest possible time. On the other hand, when a purchaser buys a property, he wants to get early vacant possession of the property, or get vacant possession within the contemplated completion date of the transaction.
At the pre-SPA stage, it is prudent for the real estate agent to conduct due diligence on the property and the vendor with the assistance of a solicitor, so that the agent may advise his vendor client and also provide the relevant information to the purchaser.
Since the agents and negotiators are in the front line before the solicitor prepares the draft SPA, it is prudent for them to investigate the property and the vendor.
These are some of the issues and decisions that may affect the purchaser and the vendor’s decision to go through with the transaction.
Who is the registered proprietor of the property?
If the property is still in the developer’s name, the original purchaser (aka the vendor) may write to the developer to do a direct transfer of the property from the developer to the second purchaser. However, if the developer does not agree to do a direct transfer in favour of the second purchaser, then a Memorandum of Transfer will be signed between the original purchaser and the developer. At the same time, the original purchaser will sign a Memorandum of Transfer with the second purchaser.
After both Transfers have been duly adjudicated and stamped, both Transfers will be sent to the land office/registry for simultaneous registration, firstly from the developer to the first purchaser, and then from the first purchaser to the second purchaser.
Some developers accept requests for direct transfer, but others will not. If the property is subject to a restriction in interest, then generally the developer may not agree to do a direct transfer to the second purchaser as the developer would have obtained a blanket consent to transfer the property to the first purchaser.
Where the property is subject to a restriction in interest, the developer will firstly transfer the property to the first purchaser. After the first purchaser has been registered as proprietor, then only can he sell to the second purchaser subject to obtaining the consent of the State Authority. This type of transaction will exceed the normal completion period of three months.
The owner of the property is deceased.
When a person dies and has left a will, then the executor of the estate of the deceased person has to apply for a grant of probate to enable him to deal with the property of the deceased person.
When a person dies without leaving a will, then the administrator of the estate of the deceased person has to apply for grant of letters of administration to enable him to deal with the property of the deceased person.
When the owner is deceased, we need to find out if the executor or administrator has been duly authorized by the court to deal with or sell the property of the deceased owner through the grant of probate or the grant of letters of administration respectively.
The executor or administrator of a deceased’s estate has the capacity to enter into a sale and purchase agreement to dispose of the property of the deceased owner.
Without the grant of probate or the grant of letters of administration, there is no authority to sell, and the SPA will not be signed. Parties are to ensure that all the legal formalities have been duly complied by the executor or the administrator of the estate of the deceased owner so that the completion date of the SPA to be eventually signed may be ascertained.
Who has custody of the title to the property?
Where the property has not been transferred to the vendor, it will be desirable to inquire whether the developer or the vendor has the custody of the title.
If the title is found to be lost or missing, then it may not be advisable to sign the SPA. It may take a few months from the time of application to obtain a new title from the relevant authority.
If the parties proceed to sign a conditional SPA despite the lost or missing title, then the process of completion of the SPA will exceed the normal completion period.
The identity of the vendor.
If the vendor is a foreigner, and if his name in his identity card and in his passport differs, then the purchaser’s financier may require various documentation to be executed by the vendor to declare and state that the person named in the identity card and in the passport are one and the same person.
If such a discrepancy is discovered from the beginning, then it should be rectified immediately to avoid delays in the disbursement of the purchaser’s financier’s loan.
To ascertain the correct and property identity of the vendor is important to ensure that there are no unnecessary delays in the completion date of the SPA.
Check the title for the correct express condition where the category of land use is “building”.
Where the property being sold is an office unit, it is important to ensure that the express condition stated in the title does not state “untuk rumah kediaman’ (for residential purpose). The correct description is “untuk pejabat” (for commercial purpose).
In one SPA transaction, the vendor wanted to dispose an office unit. After the purchaser had placed a deposit to buy, he discovered that the express condition in the title stated ‘untuk rumah kediaman’ when it should state ‘ untuk pejabat ‘. This could be due to an inadvertent mistake on the part of the relevant authority. The purchaser and his solicitors objected.
The SPA had to be drafted in such a way to indicate that the vendor was given a specific period of time to rectify the error on the title, failing which the SPA would be terminated. There is thus an element of uncertainty which would extend the completion period of the transaction.
Property held on leasehold tenure.
If it is a leasehold property with a restriction-in-interest endorsed on the title against the transfer and the charge of the property without the consent of the State Authority, then it is imperative for the vendor to apply and obtain the consent to transfer from the State Authority before the purchaser may proceed to buy the property from the vendor.
Generally, the application for the consent to transfer is approved by the State Authority. However, if the vendor is a bumiputra and the purchaser is a non-bumiputra, then there could be a risk that the State Authority may not approve such application. If further appeals are not entertained by the State Authority, then the sale and purchase agreement will become ineffective and will be terminated.
Where the property of the vendor is caveated.
If a land search on the property reveals that a private caveat has been entered on the vendor’s property, then obviously the purchaser will not proceed with the signing of the sale and purchase agreement, unless the private caveat is first removed.
On the other hand, if the preliminary land search shows that there are no caveats on the property, then the parties will proceed with the signing of the sale and purchase agreement.
However, if after the sale and purchase agreement has been signed, and another land search subsequent thereto reveals that a caveat is lodged on the vendor’s property, then if the vendor fails to withdraw the caveat, then the sale and purchase agreement may be terminated and in such an event, the vendor will have to refund all monies paid towards the account of the purchase price to the purchaser and pay compensation to the purchaser, as the case may be.
Developer in liquidation.
There have been instances where after a housing project has been completed, but before the strata titles are transferred to the original purchasers, the housing developer company has gone into liquidation.
In such an event, a liquidator may be appointed and requested to act on behalf of the wound up housing developer company in handling the documentation pertaining to the execution of the memorandum of transfer in favour of and for the benefit of the original purchasers.
When an original purchaser does not intend to obtain registered ownership of his property but desires to sell it, then he has write to the liquidator to seek its consent to a direct transfer in favour of the second purchaser.
Upon receipt of such a request, the liquidator will conduct a verification of ownership exercise, and upon being satisfied that the legal formalities and requirements have been complied with by both the original purchaser (currently in his capacity as vendor) and the second purchaser and are found to be in order, and after payment of an administrative fee by the original purchaser to the liquidator, then the process of execution of the direct transfer by the liquidator in favour of the second purchaser may commence and proceed accordingly.
In the above situation, it will be prudent for a due diligence to be undertaken before the original purchaser decides to sell and the second purchaser decides to purchase the property so as to avoid or expect unnecessary delays in the intended sale and purchase transaction.
- The pre-SPA stage;
- The formation of the SPA stage;
- The completion of the SPA stage.
The pre-SPA stage.
During the pre-SPA stage, the investigations carried out at this stage are basically on the property and the vendor.
When a vendor sells his property, it is reasonable to believe that he wants to receive the proceeds of sale in the shortest possible time. On the other hand, when a purchaser buys a property, he wants to get early vacant possession of the property, or get vacant possession within the contemplated completion date of the transaction.
At the pre-SPA stage, it is prudent for the real estate agent to conduct due diligence on the property and the vendor with the assistance of a solicitor, so that the agent may advise his vendor client and also provide the relevant information to the purchaser.
Since the agents and negotiators are in the front line before the solicitor prepares the draft SPA, it is prudent for them to investigate the property and the vendor.
These are some of the issues and decisions that may affect the purchaser and the vendor’s decision to go through with the transaction.
Who is the registered proprietor of the property?
If the property is still in the developer’s name, the original purchaser (aka the vendor) may write to the developer to do a direct transfer of the property from the developer to the second purchaser. However, if the developer does not agree to do a direct transfer in favour of the second purchaser, then a Memorandum of Transfer will be signed between the original purchaser and the developer. At the same time, the original purchaser will sign a Memorandum of Transfer with the second purchaser.
After both Transfers have been duly adjudicated and stamped, both Transfers will be sent to the land office/registry for simultaneous registration, firstly from the developer to the first purchaser, and then from the first purchaser to the second purchaser.
Some developers accept requests for direct transfer, but others will not. If the property is subject to a restriction in interest, then generally the developer may not agree to do a direct transfer to the second purchaser as the developer would have obtained a blanket consent to transfer the property to the first purchaser.
Where the property is subject to a restriction in interest, the developer will firstly transfer the property to the first purchaser. After the first purchaser has been registered as proprietor, then only can he sell to the second purchaser subject to obtaining the consent of the State Authority. This type of transaction will exceed the normal completion period of three months.
The owner of the property is deceased.
When a person dies and has left a will, then the executor of the estate of the deceased person has to apply for a grant of probate to enable him to deal with the property of the deceased person.
When a person dies without leaving a will, then the administrator of the estate of the deceased person has to apply for grant of letters of administration to enable him to deal with the property of the deceased person.
When the owner is deceased, we need to find out if the executor or administrator has been duly authorized by the court to deal with or sell the property of the deceased owner through the grant of probate or the grant of letters of administration respectively.
The executor or administrator of a deceased’s estate has the capacity to enter into a sale and purchase agreement to dispose of the property of the deceased owner.
Without the grant of probate or the grant of letters of administration, there is no authority to sell, and the SPA will not be signed. Parties are to ensure that all the legal formalities have been duly complied by the executor or the administrator of the estate of the deceased owner so that the completion date of the SPA to be eventually signed may be ascertained.
Who has custody of the title to the property?
Where the property has not been transferred to the vendor, it will be desirable to inquire whether the developer or the vendor has the custody of the title.
If the title is found to be lost or missing, then it may not be advisable to sign the SPA. It may take a few months from the time of application to obtain a new title from the relevant authority.
If the parties proceed to sign a conditional SPA despite the lost or missing title, then the process of completion of the SPA will exceed the normal completion period.
The identity of the vendor.
If the vendor is a foreigner, and if his name in his identity card and in his passport differs, then the purchaser’s financier may require various documentation to be executed by the vendor to declare and state that the person named in the identity card and in the passport are one and the same person.
If such a discrepancy is discovered from the beginning, then it should be rectified immediately to avoid delays in the disbursement of the purchaser’s financier’s loan.
To ascertain the correct and property identity of the vendor is important to ensure that there are no unnecessary delays in the completion date of the SPA.
Check the title for the correct express condition where the category of land use is “building”.
Where the property being sold is an office unit, it is important to ensure that the express condition stated in the title does not state “untuk rumah kediaman’ (for residential purpose). The correct description is “untuk pejabat” (for commercial purpose).
In one SPA transaction, the vendor wanted to dispose an office unit. After the purchaser had placed a deposit to buy, he discovered that the express condition in the title stated ‘untuk rumah kediaman’ when it should state ‘ untuk pejabat ‘. This could be due to an inadvertent mistake on the part of the relevant authority. The purchaser and his solicitors objected.
The SPA had to be drafted in such a way to indicate that the vendor was given a specific period of time to rectify the error on the title, failing which the SPA would be terminated. There is thus an element of uncertainty which would extend the completion period of the transaction.
Property held on leasehold tenure.
If it is a leasehold property with a restriction-in-interest endorsed on the title against the transfer and the charge of the property without the consent of the State Authority, then it is imperative for the vendor to apply and obtain the consent to transfer from the State Authority before the purchaser may proceed to buy the property from the vendor.
Generally, the application for the consent to transfer is approved by the State Authority. However, if the vendor is a bumiputra and the purchaser is a non-bumiputra, then there could be a risk that the State Authority may not approve such application. If further appeals are not entertained by the State Authority, then the sale and purchase agreement will become ineffective and will be terminated.
Where the property of the vendor is caveated.
If a land search on the property reveals that a private caveat has been entered on the vendor’s property, then obviously the purchaser will not proceed with the signing of the sale and purchase agreement, unless the private caveat is first removed.
On the other hand, if the preliminary land search shows that there are no caveats on the property, then the parties will proceed with the signing of the sale and purchase agreement.
However, if after the sale and purchase agreement has been signed, and another land search subsequent thereto reveals that a caveat is lodged on the vendor’s property, then if the vendor fails to withdraw the caveat, then the sale and purchase agreement may be terminated and in such an event, the vendor will have to refund all monies paid towards the account of the purchase price to the purchaser and pay compensation to the purchaser, as the case may be.
Developer in liquidation.
There have been instances where after a housing project has been completed, but before the strata titles are transferred to the original purchasers, the housing developer company has gone into liquidation.
In such an event, a liquidator may be appointed and requested to act on behalf of the wound up housing developer company in handling the documentation pertaining to the execution of the memorandum of transfer in favour of and for the benefit of the original purchasers.
When an original purchaser does not intend to obtain registered ownership of his property but desires to sell it, then he has write to the liquidator to seek its consent to a direct transfer in favour of the second purchaser.
Upon receipt of such a request, the liquidator will conduct a verification of ownership exercise, and upon being satisfied that the legal formalities and requirements have been complied with by both the original purchaser (currently in his capacity as vendor) and the second purchaser and are found to be in order, and after payment of an administrative fee by the original purchaser to the liquidator, then the process of execution of the direct transfer by the liquidator in favour of the second purchaser may commence and proceed accordingly.
In the above situation, it will be prudent for a due diligence to be undertaken before the original purchaser decides to sell and the second purchaser decides to purchase the property so as to avoid or expect unnecessary delays in the intended sale and purchase transaction.
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