Proposed OTP Clause Could Provide Protection For Home Buyers, Developers - REHDA
KUALA LUMPUR, May 13 (Bernama) -- The proposed “Option to Purchase” (OTP) clause under the new housing law could provide greater protection for prospective home buyers while helping developers to better gauge genuine market interest and reduce the risk of abandoned projects, said the Real Estate and Housing Developers’ Association (REHDA).
President Datuk Ho Hon Sang said under the proposed clause, both purchasers and developers can withdraw from the transaction before the sale and purchase agreement (SPA) is signed.
This provides buyers with the flexibility to walk away from a purchase should circumstances change or if they change their minds about the property.
Likewise, developers will have the flexibility to exit from projects that may no longer be commercially or financially feasible.
"While the mechanism has yet to be finalised and there are still many uncertainties about the clause, in principle, the OTP mechanism is beneficial in protecting prospective home buyers who intend to purchase a specific residential unit.
"At the same time, it provides them with an opportunity to reconsider their purchase decision should their circumstances change," he said in a statement.
He hoped the Housing and Local Government Ministry (KPKT) will continue to engage industry players, including REHDA, to finalise details and the OTP mechanism framework.
Ho also stressed that the clause must be clear, practical and fair in safeguarding buyers’ and developers’ interests.
"The OTP introduction could also potentially provide a practical solution to the various issues both parties faced, including concerns relating to abandoned housing projects, as mentioned by the minister (Nga Kor Ming) during his announcement," he added.
Nga recently announced that his ministry is studying the OTP mechanism to be introduced under the proposed Real Property Development Bill, to reduce the risk of sick, delayed, and abandoned housing projects, while providing flexibility for homebuyers and developers.
Since December 2022, the ministry’s special taskforce has successfully revived more than 1,500 sick and abandoned housing projects nationwide, with a gross development value exceeding RM140 billion, bringing renewed hope to over 176,000 homebuyers nationwide, he said.
-- BERNAMA