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Deposit Refund before signing S & P from the developer?

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asked on Sep 1, 2005 at 04:48
by   Ying
I have paid RM10k to book a commercial sector from a developer in Selangor on 20th April 2005. The official receipt given by the developer, stated the booking lot unit and the total amount of booking fees only. No other terms and conditions being mentioned on the receipt. The staff told me verbally that the S&P will be signed in June or July only. Truly, the developer's lawyer contacted me to sign the S&P in July, but I didn't sign the document until todate. This is because after placing the booking fees, I regreted to purchase the unit due to:
1. unstrategic location.
2. I am not able to secure the bank loan unless I have a joint account with another buyer.
3. My business is not doing well now.

So, I called and wrote letter to the developer asking for refund since I have not signed the S&P. I gave them the following reasons:

1. My business is not doing well now and
2. I am not able to secure the bank loan.

The developer rejected my request and want to forfeit my deposit.

Subsequently, I proposed to the developer, to refund the deposit to me when they find a new buyer for the unit. The developer told me verbally that they will forfeit my deposit and asked me to wait till I received the reply from their lawyer, then only appeal to the management.

My questions:

1. Am I eligible to ask for the refund of booking fee?
2. When I placed the deposit, I remember the staff told me if I could not secure bank loan, I can ask for refund, but now they have changed their decision.
3. I even told them, they can charge certain percentage of penalty and return me the balance? Am I have the right to say this statement?
4. Which party can I file a complain on this issue? or do I need to seek a lawyer's help.

For your information, until now there is no development on the site yet, only fencing. The project is expected to complete in year 2007. I have come to know that there are a few buyers who are seeking for refund too. However, I don't know them

Your response to the above questions are very much appreciated.

Thank you and have nice days
ying
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10 Answers

answered on Sep 1, 2005 at 11:47
by   stranger
I am happy to share my thought with you in your matter.  However, there are many other factors that may be important to decide whether you are likely to win in a law suit, that I am contemplating now.

The interesting point is that you made a booking and pay for the booking fee on 20Apr05,  but only asked to sign the sales and purchase agreement in July, i.e. a lapse of over 2 months.  The crucial question, I believe, is whether you have a binding agreement with the developer at the time of booking made. A sub-issue is that whether the essential terms of the agreement were settled at that time. I have reservation that you and the developers had agreed of a forfeiture of your deposit for failure to execute the agreement. At best, the developers may argued there was an implied term.

Perhaps the best arguments you may made in this matter are:
1.   The booking made was only a tentative measure for further negotiation subject to the forthcoming sales and purchase agreement. This means it is only conditional to the signing of s&p.
2.   There has been an unreasonable delay on the developers' part in furnishing you with the s&p agreement.  The delay in the agreement would have caused a late delivery of the property because the delivery is stated from the date of agreement signed.

In reality, developers would likely to squeeze you as much as they can. They tend to wear you down by going slow in responding to your many contacts to them. If you cause too much pressure from them, then they may propose to find you a little refund. Time is not on your side. It seems to be your advantage to make up your decision earlier. If you decide to assert your preceived right, then the early you assert it the better you are. It is more likely to be counter-productive to tell the developers you are not doing well in your business and not able to secure a bank loan. You are more likely to give the impression you are weak and would allow them to bully you. In animal kingdom, the wounded prey does hasten the confidence and accelerate the attack by the predator.

Many people think the delivery time is only start from the agreement date.  There are decided court decisions indicate that the correct starting date is the date of paying of booking fee.

If in doubt, best to have your independent professional advice to assess your legal position.
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answered on Sep 1, 2005 at 16:36
by   Ying
Dear Stranger;

Thank you for your reply.

I am very firm not to purchase the unit.  Your suggestion is I engage a lawyer to solicit this issue?

Thank you
ying
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answered on Sep 1, 2005 at 18:56
by   stranger
It is generally regarded lawyers are better equipped to provide solutions to your legal needs. Of course you may get different opinions from a lawyer to another lawyer. It is for you to decide which opinion you think would be acceptable to you. As I understand most lawyers providing some free time in discussing with prospective clients over their opinions and enable the prospective clients to decide whether they would want them to handle their cases.
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answered on Sep 1, 2005 at 19:20
by   Ying
Dear Stranger;

I have consulted two lawyers pertaining to this issue:

1.  One lawyer told me - it is at the developer's mercy to return the money to me.  This is because the commercial sector is not covered by the Housing Law and is not under the proctection of Ministry of Housing.  

2.  Another lawyer told me, I have the right, don't let the developer bully me.  The most is the developer take some administrative fees and return me the balance.  Coz the developer still possess the unit.

3.  I called the Kementerian Hal Ehwal Pengguna, they told me they don't handle commercial sector and I asked me to refer to Majlis Perbandaran.

I am really confused, which methods is best work for me now?  To engage a lawyer and for the court case also involved money, would the expenditure higher than the booking fees of RM10k.

do you know any party can help me.

thank you.
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answered on Sep 1, 2005 at 22:53
by   stranger
Firstly, I do not pretend I am competent in handling your case. I suppose I have had more frustration with incompetent lawyers than most people that led to do the incredible thing in seeking the knowledge myself. I do know your frustration and sense of helplessness. I hope I can help you more if I have the capacity.

If you can settle your differences with your developers amicably, then it would be well and good. If this is impossible and you need to have a force that can compel the developers to answer your charge, then court is the obvious answer. You can represent yourself in court. If you cannot do this, then obviously you would need others to do it for use. This means it would involve with some payment. It is not unreasonable for you to weigh up the advantages and disadvantages of taking the legal route with consideration of many factors you feel relevant, especially on cost. I suppose it is your prerogative to make the decision for yourself. I have no capacity to do it for you.

Personally, my feeling is that there is a good argument for the refund of deposit. Details as discussed earlier. Though there is legislation to protect residential property and this may not extend to commercial property, I still have difficult to see the view that you are not protected at all.  I also would not start with talking about the deduction for administrative charges etc. The main contention is that there is no binding contract is in existence. At the time of the booking document signed, the terms of contract would not agreed upon and the agreement was subject to the signing of the sales and purchase agreement. You have not agreed to the terms of the s&p and no contract has been formed.  The long delay in offering you their proposed agreement is an added point to your advantage.

It is not absurd to say that all lawyers are the same and they are competent. I personal have seen a "senior" lawyer with 9 years experience and being a partner of a mid-size "reputable" law firm can make the silly mistake than a housing purchase is not entitled to damages (i.e. compensation) when the developers wrongfully terminated the contract.

I have no magic bullet that if you get any particular lawyer to act on your behalf and then you will get what you desire.  If you decided to seek opinion from other lawyers, perhaps it is wise to ask them to define the issue(s) and the relevant governing laws. With this information, the competency can be assessed easier.

When facing a crisis, it is always easier and comfortable to rely on God to answer to our prayers, though the reality points to that self help is often a more viable or "logical" option. It is time you may like to believe on your own wisdom. What will be will be. I suppose you would be better to take charge of your own destiny and accept responsibility for your decisions. Blaming others for the wrong is comforting but useless. I certainly do not want to be blamed for my "help".
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answered on Sep 2, 2005 at 03:22
by   Ying
Dear Stranger;

Ya,I agreed with you that we have to choose solicitor wisely, coz I have came across lawyers who are lack of experiences and also code of ethics, just for the purpose of earning clients' money.

Ya, you are right, there is no binding of agreement between the developer and me.  However, in Malaysia law, oral statement is accepted in the court if the defender is able to prove it with evidence.  The developer may argue that they have verbally informed me  on "forfeit the deposit if fail to sign the s & P".  Anyway, I don't remember they have mentioned the statement to me.

Hi, stranger, I appreciate your time and effort to share your opinion with me here in this forum.  I know I am the cause of this event, I will not blame any one, but knowing very clearly that I responsible for the issue.

I have written a letter to ask for the refund in the begining of Aug, it has been almost a month now, so I plan to write them another letter demanding them to return the deposit to me and will emphasize on the "no binding of agreement between the developer and me", therefore I reserve the right to ask for refund, shall I mention this in the letter?

Or please share with me better idea for me to draft the letter.

Thank you and looking forward to your reply.
ying
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answered on Sep 5, 2005 at 16:54
by   stranger
It may be more productive to decide whether you think you would be able to come to an amicable solution with the developers. If your answer is NO, then consider whether you want to sue the developers. If your answer is YES, then decide whether you are willing or capable to present yourself in court.  If NO, then your only choice is to engage a practising lawyer to represent you.

When you are in this stage, focus on getting a practising lawyer that you trust would best represent your interest, then leave it to him or her to discharge the task.  Your further dealing with the developers may not benefit you in any way, and it would rather limit the scope your professional to help you.

Law is not easy to understand. It may not be wise for a lay person to dictate a professional how to handle his/her expertise area.
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answered on Sep 29, 2005 at 08:17
by   LoyerBrook
You may like to visit: http://hba.org.my/ to get better understanding of property purchase procedures.
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answered on Sep 29, 2005 at 08:20
by   LoyerBrook
Also to know your rights as a purchaser or consumer.
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answered on Sep 30, 2005 at 23:30
by   Godsbum
When you sign a property contract it is either conditional or unconditional. When you pay a deposit there are conditions in the contract yo either enter to make it conditional or accept the fact the contract becomes unconditional after a short cooling off period, ususlly a few days or a couple of weeks .

In your case and by your own admission you appear to have allowed the contract to become unconditional on the pain of forfeiture of your deposit. There is no requirement for the developer in these circumstances to refund your deposit. Instead a right arises in their favour to sue you for the balance if they chose to exercise that right.

You cannot have your cake and eat it too (or your keuh Tiau and eat it too). You cannot expect the world to stop for you to get off when you want it too. So in future when you undertake such a serious transaction of such a mgnitude, at least have the common sense to seek proper advice.

This bull crap about not strategic location has been used by cheap speculator and time wasters in Malaysia from time immemorial. it is time you were made to pay for your greed.

Ghani nahu Lu
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