Monday, July 02, 2007

Time to Cut Losses?

My long delayed apartment continues to give me more grief than it’s worth.

The latest headache came in when I found a letter from the developer waiting for me in my mailbox when I came back from work last Friday. I was expecting to hear from them about the project restarting again after being delayed for the past 2 years so I didn’t think much about the letter. Once I opened the letter and read it, I literally had to sit down and get over the shock to find out that the developers had terminated my S&P agreement for non payment. Not only that, everything that I have already put into the property was to be forfeited to the developer company.

For the past 2 years, I have been working with my bank representative to secure a new housing loan for this property. My first loan for the apartment had to be voided when the developer changed my unit after the local council did not approve the original floor plans for the apartment which unfortunately impacted the unit that I bought. When I tried to secure a new loan for the new unit, it came to light that the developer did not have an active developer loan number (or something to that effect) with the banks. This meant that I could not go to any bank to get financing to purchase the apartment.

Every time I talked to someone in the developer’s office about their loan number issue, I continue to get the assurance that it was looked into and that the banks will be advised to their new active loan arrangement. Month after month these past 2 years, I’ve constantly checked with my bank representative who by now knows me by sight if there was any change with the loan situation. In each occasion, I got the same answer back that the developer was still without a valid developer loan license.

While all this was happening, the developer was also sending me notices for penalty interest charges for late payment. At first I went ahead and paid them as they came as I thought that it was just a temporary situation. As the months progressed with little change in the loan problem, I began to withheld payment to these notices after discussing it with one of the staff from the developer’s office who advised me that the will suspend the interest penalty charges. At the time it made sense for me since the project itself was on hold due to financial troubles that the developer was experiencing.

A ray of hope seem to dawn earlier this year when they announced that the project was being revived by a more reputable developer. Everyone who purchased units in that project had to come in and sign a waiver that we would not claim any late delivery charges so the new developer could complete the project without added cost to them. Given that the alternative to the plan was having nothing at all to show for the money that we put in, the majority of the buyers agreed to the plan. I had hoped that with the new developer in plan, the bank would now get a new developer loan number for me but it was still status quo as of 2 weeks ago.

After reading the letter of termination that I got last Friday, I had to sit down and think about what I should do about the property. On one hand, I could cut my losses and start fresh by looking for another suitable property to purchase. This current property has given me nothing but headaches from the day I put my signature on the S&P agreement. On the other had, I already have RM 18.5K of my own hard earned savings plugged into that property and invested about 5 years of my time in it. Thinking about how hard I had to work to get that amount money back then makes it all the more difficult to let it go.

I gave the developer’s office a call this morning to explain my situation and to explore avenues left to me. Fortunately I got the promise that my case will be brought up to the management who will decide if I would be allowed to renew my S&P agreement with them with hopefully a new approved housing loan. I will get to know their decision by next Monday so I’m keeping my fingers crossed. If it works out that I will still have to forfeit the money and the apartment then there would be little more that I can do other than taking the punch and roll with it.


[danial][ma] said...

sympathy with your situation. hope that you can find way(s) to reduce the losses...

Nickxandar said...

Danial ...

Thanks. Still have my fingers crossed for next Monday's outcome. If it doesn't go my way then I'll roll with it and start looking for a new place.

Kinda exciting, actually ... the thought of going house hunting again.