The public should be careful when buying auctioned properties as there could be several risk factors in the Condition of Sale.
Consumers Association of Penang president S.M. Mohamed Idris said the bidders or property buyers can find themselves in an extremely disadvantaged position as the terms in the Condition of Sale are allegedly one-sided.
“Although the Condition of Sale in auctions is not standardised, the terms and conditions, however tend to be similar,” he told a recent press conference at the CAP office in Jalan Masjid Negeri.
He said some of the alleged unfair terms found in the Condition of Sale include conditions where banks or auctioneers may refuse any bid without reason, the banks having the absolute right at any time to change, alter or add to the Condition of Sale prior to the auction, and the banks not being responsible for misstatements.
“The other terms can include banks terminating the sale at any time, property purchasers need to be responsible for all the risks, all statements made by the auctioneers, banks or lawyers are statements of opinion and cannot be taken as statement of fact by the purchasers, and purchasers not being allowed to inspect the interior condition of the property.
“Moreover, we have also received at least two complaints every year from bidders, saying that they have to bear the property’s liabilities such as quit rent, assessment fees and even maintenance fee, which could come up to more than tens of thousands of ringgit,” he said.
“These contract terms are unfair to the bidders, especially to those who are unaware of them.
“They think that they have got a unit at a low price, but they may end up paying more,” Mohamed Idris added.
He said CAP hoped the Ministry of Domestic Trade, Cooperatives and Consumerism could act immediately on the unfair contract terms in the Condition of Sale in auctions or in any other contracts, to ensure that consumers get a fair treatment.
“Under Section 24 of the Consumer Protection Act 1999, unfair contract terms are illegal and therefore, unenforceable.
“These unfair terms found in the Condition of Sale at auctions should be withdrawn or amended to strike a fair balance between the bidders and the assignees,” he added.
Also present was Malaysian Bidders Association president Jeevananthan Muniandy. - The Star
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