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RM100 million (95% progress payment) collected, but project stops...

The Rhythm Avenue Series #1: RM100 million believed collected from 880 apartment buyers in 95% progress payment, but CF is nowhere in sight. Dr Jacob George of CASSA gives Sanjung Utama 7 days to refund purchasers...

Posted on 11.25pm Apr 23, 2002

RHMTHM AVENUE... RM 100 million collected in the form of 95% progress payment - ready for issuance of CF - yet the developer is no where to be seen completing the project. The 'Rhythm Avenue'
Series #1:

By usjXpress Team

SUBANG JAYA, April 23: Sanjung Utama Sdn Bhd, the developer for Rhythm Avenue service apartments in USJ19, has been given seven days to make full refund to a group of purchasers.

The ultimatum was issued by Dr Jacob George, president and legal adviser for Consumer Association of Subang and Shah Alam (CASSA) at a press conference here April 23 (See picture above).

"We will raise the case with the deputy prime minister Datuk Seri Abdullah Ahmad Badawi if the developer fails to respond by the deadline," George said.

A group of Rhythm Avenue apartment purchasers have appointed George as their representative in making their demand for full refund.

They claimed they have paid up to 95% of progress payment, but the developer have yet to hand over vacant possession of their properties.

The said the developer has exceeded the date of delivery, ranging from November 2001 to January 2002, as stipulated in their sales and purchase agreements.

According to a Sanjung Utama marketing brochure reviewed by the usjXpress Team, there are about 880 units of apartments spread over four blocks atop the Rhythm Avenue Axis business complex.

There units were priced between RM90,000 to RM170,000 per unit when the project was offered for sale about 40 months ago in 1999.

A survey among the purchasers present at the press conference revealed that they have paid up to 95% of progress payment, meaning the properties were ready for the issuance of Certificate of Fitness by the local authority, MPSJ.

"Those who complained to relevant authorities have even been given misleading advice that buyers of serviced apartments are not protected under the law," said George.

He said the root causes of the problem point to possible foul play and misconduct involving the project's professional bodies.

"All signs at the project site, particularly Block C, suggest that the project has been abandoned by the developer," said George, who described the project as being only 65 to 70 percent completed.

Reporters, who were later brought to the project site, saw the uncompleted buildings were all fenced up. There was no visible presence of any construction work.

The signboard which is supposed to state the development project was also broken, and the area was also overgrown with weeds.

"If the developer or its agent does not get in touch with CASSA to propose redress to the buyers, we will bring the matter to the deputy prime minister," George said.

"We will also release evidence we have gathered and that may incriminate a lot of individuals and companies, including a second board company," George said.


"I was told that an estimated RM100 million has been collected from the purchasers so far," said George.

George said the amount was excluding the commercial units at the podium block.

"Is RM100 million too small a number to be considered a serious problem?" asked George.

"If the USJ 15 Vision School complex is built at RM10 million, then the amount collected by Sanjung Utama is already enough to build 10 of Vision Schools in one go," he said.

In relation to the project, George said developers who require additional time to fulfill their contractual obligation to hand over the properties must inform buyers of the delay.

However, he said, the developer of Rhythm Avenue had failed to do so.

"I was told Sanjung Utama not only failed to inform the buyers of the delay, but purchasers seeking explanation from the developer were given the runaround instead," he added.

Several purchasers have complained of deliberate action by the developer to avoid them.


According to George, some 40 buyers have come forward to seek assistance from CASSA to find out the progress of the project.

"Some of the buyers are young couples who have borrowed money to purchase the units, but they were not given any assurance by the developer," said George.

Lim Yek Lian, 30, who was expecting her first baby, said she was upset because she might not be able to move in before she delivered.

"I have invested all my life's savings in the property, now our dreams are shattered and all I want is to get an immediate refund so that we can buy another property else where," she said.

"I have been servicing my bank loan for Rhythm Avenue, and right now, my sister and I have to pay extra to rent another accommodation. Is this fair?" asked Low Cheng Fui, an auditor.

Low said she has paid up 95% progress payment for her unit in Block C, and she now wanted a full refund from the developer.

"We have waited for over 39 months, and all that the developer did was to avoid us," said Loh Weng Leong, an engineer, who wanted a full refund.

"Whenever we ring up the developer, or go to their office, they just don't bother to attend to us," he said.

"This is horrendous! We have paid up 95% for the apartment and yet we are given the run around," said Annie Teoh, 27.

Teoh, who also demanded a full refund, said she purchased the apartment with the financial support from her retired parents.


George said when purchasers approached Subang Jaya state assemblyman Datuk Lee Hwa Beng, they were informed that the developer was seeking a financier for the project.

"But the developer has already collected 95 percent of the cost of the property. Why should they need to apply for alternative financing?" asked George.

"There is clear evidence too that certain local politicians are aware of this and they have done nothing to help," he said.

"Some are even issuing statements which are misleading or are blatant lies," he added.

In addition, several other professional bodies should also be queried, such as the architects in charge of the project, as they had issued the letter allowing the developers to collect 95 percent of the purchase price as early as three to six months ago, according to Malaysiakini which quoted George.

Meanwhile, George urged MPSJ President Ahmad Fuad Ismail to work with CASSA to resolve the problems faced by purchasers of the properties.

He added that a solution should be found immediately as the same developer is also responsible for another project named 'Newgate Avenue' in neighbouring USJ 21.

Meanwhile, Lee did not respond to email questions related to Rhythm Avenue sent twice by administrator, Jeff Ooi.

Attempts to contact Sanjung Utama were also unsuccessful. The developer was said to have relocated to the office of second-board listed company YCS Corporation at No.2, Suite 1-1, Jalan TP5, Taman Perindustrian UEP Subang Jaya (Tel: 03-80242922).

Buyers who wish to contact CASSA may do so at hotlines 012-366 4444 or 017-30 300 30.

However, George said CASSA would only assist bona fide purchasers of Rhythm Avenue apartments who are required to show their sales and purchase agreement and identity cards of the signatories.

Related Reports:
Consumers group wants errant developer to return money
China Press: Rhythm Avenue buyers demand full refund

The Rhythm Avenue Series
#2: How Lee Hwa Beng keeps on shifting goal-posts for developer
#3: Web of mysteries around Sanjung Utama

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Hwa Beng: "Chee Wen needs more money from public"
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