Confusion over Forest City project refunds

unnamed (5)KUALA LUMPUR: Country Garden, the developer of the Forest City project, says less than 60 buyers from China want to cancel their bookings of apartments in the Johor project.

The company said in a statement today that it was in discussion with these buyers, according to a Straits Times report.

However, there seems to be some confusion over whether the company will refund these buyers.

In a statement last night, the company said there was a penalty clause for those wanting to opt out of the purchase agreement. This contradicts a report which quoted an official as saying, also yesterday, that these buyers would get refunds.

Last night’s statement said: “In the event of home booking cancellation, we would also like to clarify that cancellation after a sales and purchase agreement has been signed is deemed as a breach of contract.

“The penalty clause, ranging between 10% and 30%, only kicks in when a buyer, who has decided to purchase certain promoted residential units, decides to default on the payment or cancels the sales and purchase agreement.”

The Straits Times reported that in the latest statement Country Garden said it would “remain committed” to the development of Forest City, a project that would take “about 20 years to materialise”.

“In 2017, we expect more diversified revenue from sales and rental from a variety of properties such as offices, shopping malls, a new hotel and a golf course, in addition to residential properties,” it added.

Yesterday the South China Morning Post had reported that buyers who had placed deposits on properties at Forest City but were now finding it difficult to service payments because of tighter rules introduced by Beijing to stem the flight of capital, “can cancel the transaction and there is no need to pay a forfeit fee”.

It quoted Country Garden vice-president Zhu Jianmin as saying this.

Beijing has leaned on banks and card issuers to stop providing foreign exchange for people to buy property, securities and insurance products.

Zhu also was quoted as saying that only about 5% of buyers were considering pulling out of their purchases.

Buyers contacted by The Straits Times yesterday said they had not been told of any change to Country Garden’s refund policy, and that sales staff they had spoken to said there had been no change.

The report said some buyers, already in the process of seeking a refund, had accused Country Garden of dragging its feet or outright denying refunds.

“I called my sales officer on Tuesday and he could only say that my refund is still on hold. It’s been dragging on for more than a month, and all they can tell me is to wait,” it quoted a buyer by the name of Zhang Guanguang from Hefei as saying.

The report quoted analysts as saying that even if a fraction of buyers sought a refund, it might result in a slowdown in the whole development.

Forest City is a futuristic smart city project being built in Johor on four man-made islands spanning 1,385.6ha. Costing RM100 billion, it is expected to be completed within 20 years and will have a range of facilities, including housing units, offices and shopping malls.