Tuesday, September 19, 2017

Unfinished projects leave buyers short

Buying an apartment before completion, whether at the planning stage or during construction, can save you a lot of money. But there are risks, some disappointed customers are saying.

Time and cost overruns can disrupt carefully organised arrangements. Sometimes the completion date for your property just seems to keep receding into the future.

Daw Ohm Hmee, 65, who lives in Mingalar Taung Nyunt township, said her family was still waiting to move into their unfinished five-unit, six-storey apartment building.

“The deal was that the contractor had to complete the building within one year. But it isn’t finished yet. We had to move out of our old apartment in October last year, but even back in January construction was facing delays. The developer rented a house for us for one year, until the end of September. According to the agreement, the contractor was supposed to pay us one lakh – K100,000 – a month in the event of non-completion within a year. In fact, he only gave us K70,000 a month, saying the delay was due to other people not moving out of the building. That amount won’t cover the rent in the apartment we’re living in now, so we’ll have to move again,” she said.

The government-run Mirror daily newspaper recorded four separate disputes between landowners, apartment buyers and developers in the form of announcements made by the landowner against the developer.

At the same time, construction companies in Yangon continue to be affected by the global recession.

U Aung Tun, managing director of MTP Construction, said this was a time for developers to adjust their capitalisation and the number of operations they were handling.

“We should stay within a range that we can handle. Otherwise we might overreach and lose the confidence of our customers,” he said.

He said post-Nargis reconstruction projects had helped keep construction companies afloat.

“We have advance money from reconstruction work which we can use elsewhere. But we have to make sure we finish our other work on time,” he said.

He said many developers who face difficulties in capitalisation would probably leave the industry following new regulations laid down by the Yangon City Development Committee, which now required a K5 million deposit in advance of any building work.

A would-be home buyer in Tarmwe township said she would choose an already-completed apartment to avoid the pitfalls of unfinished projects.

“I don’t need that kind of risk. Maybe buying a finished apartment is more expensive than buying at the construction stage. But who can say what will happen tomorrow?” she said.