|Build then sell|
THE Build Then Sell (BTS) concept is a new concept introduced by the government where housing developers have to complete a housing project completely before selling it to buyers.
This is different from the current conventional concept of Sell then Build (STB).
Although developers are encouraged to adopt the BTS concept, they have the option to continue with the conventional STB method.
The BTS will be executed alongside the existing STB method for a transition period of two years. The developers are free to choose BTS or STB.
After the transition, the effectiveness of the concept will be evaluated A Ministry official said the BTS concept will benefit “both buyers and developers where buyers will be able to lighten their financial burden and developers will have to make effective planning and marketing strategies.”
“It will also increase the level of competition in the housing industry,” said the statement.
There are currently two variants of BTS — the complete BTS 0:100 and partial BTS 10:90.
The complete BTS is where the developer only sells the house when it is fully completed with a CCC. There will be no down payments or progress payments involved.
While in the partial BTS, the developer can sell house units before completion.
Under this 10:90 concept, buyers will make a 10% down payment when making house bookings by signing a Sell and Purchase Agreement and settle the remaining 90% when the house is ready.
The benefits of this concept are that the rights and responsibilities of the buyers and developers will be stated clearly, while banks and financial institutions are able to fund projects as there is proof of a sales transactions.
Developers who adopt the 10:90 variant of the BTS concept will be exempted from paying the RM200,000 deposit for a housing development licence.
They will also be considered for exemption from meeting the low-cost home construction quota as required under the current practice for the 10:90 variant. In lieu of that, developers are given options to build medium low-cost houses.
The Government will also provide fast-lane priority to these developers by approving their applications — such as land conversion and subdivision, planning permission and building plan approval — within four months.
April 14, 2007
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