When purchasing a new property, understanding the developer behind the project is critical for making an informed decision. Investigating the developer's past achievements and current projects can offer valuable insights into their experience, reputation, and financial stability. Opting for a developer with a solid track record reduces the risk of issues such as project delays or abandonment.

For those with accounting knowledge, reviewing the developer's financial health is a useful step. If the developer is a publicly listed company, its financial statements are easily accessible online. For private companies, financial statements can be obtained through Suruhanjaya Syarikat Malaysia (SSM). Analyze these statements to ensure the developer has a healthy cash flow to support its ongoing developments.

It is also important to check for any delays in the developer's current projects, as this may signal potential issues with the developer or the project itself. Additionally, evaluate the sales performance of the developer's completed projects. A significant number of unsold units can negatively affect the company's cash flow, which may impact their ability to fund and complete ongoing developments.

When purchasing a new property from a developer, buyers are usually able to enjoy rebates and incentives that are beyond the property's purchase price. These incentives may include discounts on the property, legal fees coverage, and assistance with the memorandum of transfer. It is advisable to check with the sales representative to determine if you qualify for a full loan or any exemptions, especially if you are a first-time homebuyer.

Buying a property under construction entails a payment schedule based on the development's stages. Payments for an on-going project are made to the developer in stages, depending on the completion level. These stages typically include signing the sale and purchase agreement, completion stages of the development, vacant possession, submission for subdivision of the building, and final payments. If you fund the property with a mortgage, the bank will handle the payments to the developer. However, it is essential to clarify the amount of monthly mortgage payments before the property is completed.

When buying a new property, understanding exactly what fixtures and furnishings are provided is crucial. While most bare units exclude kitchen cabinets and lighting, some developers may offer selected fixed furnishings like air-conditioning, water heaters, kitchens, or complete interior design packages as add-ons.

For some buyers, the distinction between freehold and leasehold developments is less important than factors like pricing, amenities, and accessibility. Although not all leasehold properties are cheaper, they often provide more facilities to attract buyers. New developments typically have lengthy lease periods, but it is advisable to check with the developer regarding the remaining years.

In recent times, strata titles have become increasingly common for landed properties, replacing traditional individual titles. Strata-titled properties fall under the Strata Management Act, which requires owners to pay monthly maintenance fees and contribute to sinking funds. These properties also have restrictions on renovations to the building's facade. Understanding whether a property has a strata or individual title helps you comprehend the associated responsibilities and limitations as an owner.

Properties can be on residential or commercial title, which affects utility rates, taxes, and statutory protection. Commercial-titled properties, including small offices and serviced apartments, often have higher electricity tariffs. Additionally, quit rent and assessment rates for commercial properties are much higher. Residential properties are protected by the Housing Development Act (HDA), while commercial properties are not, with some exceptions.

The Housing Development Act (HDA) serves as a safeguard for buyers of primary market residential properties, providing protection against developers for a specified period. As long as you purchase a residential property from a licensed developer, you are covered by the HDA. This act ensures that developers adhere to specific regulations and standards, protecting homebuyers' interests.

Furthermore, buyers of strata properties are also protected by the Strata Title Act 1985 and the Strata Management Act 2013. These acts govern the ownership and management of strata-titled properties, such as condominiums and apartments. They establish guidelines for maintenance, sinking funds, and the overall management of shared common areas within the development.

Knowing the estimated completion date of a property serves two important purposes. Firstly, it allows you to plan for your move-in and occupancy of the new home. Secondly, it has legal implications, as developers may be liable to pay compensation if delays occur in completing the project. This compensation, known as liquidated ascertained damages (LAD), is calculated at 10% per annum of the purchase price from the scheduled completion date. For properties covered by the HDA, the commencement date is stated in the sale and purchase agreement.

Example: (For reference only)

Purchase Price: RM500,000

Expected completion date as per SPA: 01/01/2023

Actual date of vacant possession: 31/01/2023

Days of delay: 30 days

LAD = RM500,000 x 10% x 30 days / 365 days = RM4,109.6