What is DIBS? What is the rules for progressive interest bearing

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asked on May 20, 2011 at 23:54
by   kc
I really need an expert to help me on my current difficult situation.

Early last year I had bought 1 landed property. The developer offered me the package as zero interest until completion.

After 1 1/2 years construction work, recently I had received a interest billing from banker on the interest charged, but the letter clearly stated that the interest will beared by the developer.

However, 1 week later, I received another letter from the developer said that I have to pay for the interest charged with the supporting of certificate of practical completion dated Oct 2010.

My question are :
1. If the banker send me the interest billing which clearly stated the interest will beared by developer, can the developer send me the letter by c.c. the banker (but the banker didn't received it)?

2. I did check with the banker, according to the officer, the loan package i taken was DIBS, means all interest will be beared by developer until "completion", however, she can't clearly explain to me what is the definition for completion. Why the developer can just sending out the letter to the purchaser without their lawyer concern?

3. What rules that actually protect purchaser if we face irresponsible developer? Any govt authority can we file the complaint against them?

4. As the OC been delay for almost 6 months since the last committed date, but developer doesn't explain to us the real situation of the delay of OC. We can't do much against them, because they have 24 months period to delivered the property, we only can claim from them after that. My query is, what type of issue will cause such a long delay? Will the project become suspended later on? what law actually protect purchaser in this case?

I sincerly hope someone could help me to understand more the issue.

Millions thanks.
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2 Answers

answered on Oct 18, 2013 at 02:00
by   New Agent
Here's some info shared by an experienced person:

What is DIBS?

Recently, there have been many property developers who proudly advertise in their sales brochure that their product is offered with DIBS. Is it good for the buyer?

DIBS stands for 'Developers' Interest Bearing Scheme'. It is based on the traditional progressive payment formula or what is known as 'Sell then Build'. The buyer obtains a loan from the bank which then disburses the money to the developer based on the percentage of completion of the property. The only difference is that the interests towards the progressive payments are borne by the developer.

But what if the project is abandoned? Well, you the buyer still owe the bank the amount you borrowed house or no house. Unfortunately, the banks are not going to be sympathetic to your plight. You will have to pay them back whatever sum that has been paid to the developer.

So buyers beware! Do not be enticed by fancy words. Always check the developer's background. Do your homework.

Hope this helps...

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answered on Oct 22, 2013 at 16:33
by   ATWL
No authority is able to help you if the property is still under construction.  I've just got a phone call from KPKT stating that I have no other choice but to pay the interest.  I can then go to tribunal to claim back my interest after the property is completed.  This is ridiculous right?  I don't believe there is no law or rules to rule against developers!

My case is more on the developer at first promised to refund the interest paid by buyer whenever we paid, now they change the refund cycle by quarter.  This T&C were not stated in S&P nor loan agreement.  They issued a letter after we have signed all documents and stating that they will only refund by every 3 months.  I've complained to BNM (because RHB has claimed that their customers have no issue claiming back the interest paid) and KPKT, but I guess as a consumer, we are at the losing end.  It's so sad that consumers in Malaysia are so unprotected!
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